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10/28/14
From: 1buyer2u@gmail.com [mailto:1buyer2u@gmail.com] On Behalf Of Mr. Morley Sent: Monday, October 13, 2014 3:19 PM To: Pamela Townsend; Ken Robertson Cc: Ann Yang; oilproejct@hermosabch.org Subject: please enter NOP submissions into the administrative record of the proposed Hermosa Beach Oil Project for the 10/14/2014 City Council Public Hearing. Hi Pam and Ken, I recently became aware that NOP comments to the EIR, HIA and CBA may not be considered as part of the final administrative record of the proposed Hermosa Beach Oil Project for the 10/14/2014 City Council Public Hearing and consider them as a request for a local remedy to the concerns expressed. For an abundance of caution I am asking that all of the comments in the following links and subcategories links (within each) be added as text or as reference to the final administrative record of the proposed Hermosa Beach Oil Project. Please also include any oil project related written submissions to the Planning Commission and City Council meetings especially from me. Also, I ask that individual comments be entered into the final administrative record of the proposed Hermosa Beach Oil Project any spoken NOP comments and individual comments presented in any City sponsored forums , including Planning Commission and City Council meetings, be submitted by audio/video recording and by transcripts if possible from all public sessions. Many of the Written comments can be found on these Links. http://www.hermosabch.org/index.aspx?page=735 http://www.hermosabch.org/index.aspx?page=766 and especially these three links. http://www.hermosabch.org/modules/showdocument.aspx?documentid=3332 http://www.hermosabch.org/modules/showdocument.aspx?documentid=3446 http://www.hermosabch.org/modules/showdocument.aspx?documentid=3447 Please verify that all comments are included as I can not verify that the links above are a comprehensive list. I do not have the ability to verify that all of my email submissions for the record are included on the City Website and I will need to rely on your recordkeeping and my backup email archive. I can not verify that all of the submitted comments were responded to in the EIR, CBA or HIA. Best Regards, Tom Morley 4 price scenarios $70_$105 |bbl HB Share after Benefits and less $34 Mil Costs $70 $71 $72 $73 $74 $75 $76 $77 $78 $79 $80 $81 $82 $83 $84 $85 $86 $87 $88 $89 $90 34 year Total CBA Low Net 100% MOC 90% probability ### #### ###($23,616)####$907,250 #### #### #### #### $3,234,400 #### ### #### ####$5,561,550 #### ### ### ####$7,888,700 Average year CBA Low Net 100% MOC ### #### ###($695)####$26,684 #### #### #### ####$95,129 #### ### #### ####$163,575 #### ### ### ####$232,021 Percent of $35 Mil Budget CBA Low 100% MOC ### #### ###0.00% ####0.08% #### #### #### ####0.27% #### ### #### ####0.47% #### ### ### ####0.66% $70 $71 $72 $73 $74 $75 $76 $77 $78 $79 $80 $81 $82 $83 $84 $85 $86 $87 $88 $89 $90 34 year Total CBA Low Net 23% MOC 90% probability ### #### ### $4,352,740 #### $5,403,500 #### #### #### #### $8,030,400 #### ### #### #### $10,657,300 #### ### ### #### $13,284,200 Average year CBA Low Net 23% MOC ### #### ###$128,022 ####$158,926 #### #### #### ####$236,188 #### ### #### ####$313,450 #### ### ### ####$390,712 Percent of $35 Mil Budget CBA Low 23% MOC ### #### ###0.37% ####0.45% #### #### #### ####0.67% #### ### #### ####0.90% #### ### ### ####1.12% $70 $71 $72 $73 $74 $75 $76 $77 $78 $79 $80 $81 $82 $83 $84 $85 $86 $87 $88 $89 $90 34 year Total CBA Med Net 100% MOC 50% probability ### #### ### $19,302,404 #### $20,762,750 #### #### #### #### $24,413,600 #### ### #### #### $28,064,450 #### ### ### #### $31,715,300 Average year CBA Med Net 100% MOC ### #### ###$567,718 ####$610,669 #### #### #### ####$718,047 #### ### #### ####$825,425 #### ### ### ####$932,803 Percent of $35 Mil Budget CBA Med 100% MOC ### #### ###1.62% ####1.74% #### #### #### ####2.05% #### ### #### ####2.36% #### ### ### ####2.67% $70 $71 $72 $73 $74 $75 $76 $77 $78 $79 $80 $81 $82 $83 $84 $85 $86 $87 $88 $89 $90 34 year Total CBA Med Net 23% MOC 50% probability ### #### ### $26,168,053 #### $27,816,500 #### #### #### #### $31,937,600 #### ### #### #### $36,058,700 #### ### ### #### $40,179,800Average year CBA Med Net 23% MOC ### #### ###$769,649 ####$818,132 #### #### #### ####$939,341 #### ### #### ####$1,060,550 #### ### ### ####$1,181,759 Percent of $35 Mil Budget CBA Med 23% MOC ### #### ###2.20% ####2.34% #### #### #### ####2.68% #### ### #### ####3.03% #### ### ### ####3.38% Local Hermosa Beach Oil prices are below the posted USA and Worldwide Oil prices. The CBA indicates that, since 1994, Hermosa Beach Oil (CMS) prices are historically only 74% to 92% of Brent Crude. The CBA used a 90% ratio in Section 6.2 to determine a $95 fixed price for Crude Oil extracted from Hermosa Beach. Recent trends in USA and Worldwide Oil prices have dramatically dropped to below $80 pr barrel. $80 times 90% equals $72 per barrel which just happens to be the point where the City will lose money at the CBA Low, 90% probability estimate. $80 times 74% equals only $59 per barrel which estimates only $9 Mil at CBA Med. (after BENEFITS from E&B , Expenses, Costs, Losses and paying MOC 3.33% royalty per Alt 5 , page 128) Page 1 of 3 4 price scenarios $70_$105 |bbl HB Share after Benefits and less $34 Mil Costs 34 year Total CBA Low Net 100% MOC 90% probability Average year CBA Low Net 100% MOC Percent of $35 Mil Budget CBA Low 100% MOC 34 year Total CBA Low Net 23% MOC 90% probability Average year CBA Low Net 23% MOC Percent of $35 Mil Budget CBA Low 23% MOC 34 year Total CBA Med Net 100% MOC 50% probability Average year CBA Med Net 100% MOC Percent of $35 Mil Budget CBA Med 100% MOC 34 year Total CBA Med Net 23% MOC 50% probabilityAverage year CBA Med Net 23% MOC Percent of $35 Mil Budget CBA Med 23% MOC Local Hermosa Beach Oil prices are below the posted USA and Worldwide Oil prices. The CBA indicates that, since 1994, Hermosa Beach Oil (CMS) prices are historically only 74% to 92% of Brent Crude. The CBA used a 90% ratio in Section 6.2 to determine a $95 fixed price for Crude Oil extracted from Hermosa Beach. Recent trends in USA and Worldwide Oil prices have dramatically dropped to below $80 pr barrel. $80 times 90% equals $72 per barrel which just happens to be the point where the City will lose money at the CBA Low, 90% probability estimate. $80 times 74% equals only $59 per barrel which estimates only $9 Mil at CBA Med. (after BENEFITS from E&B , Expenses, Costs, Losses and paying MOC 3.33% royalty per Alt 5 , page 128) $91 $92 $93 $94 $95 $96 $97 $98 $99 $100 $101 $102 $103 $104 $105 #### ### ### #### $10,215,850 #### ### ### #### $12,543,000 #### #### ##### ##### $14,870,150 #### ### ### ####$300,466 #### ### ### ####$368,912 #### #### ##### #####$437,357 #### ### ### ####0.86% #### ### ### ####1.05% #### #### 1.17% 1.21%1.25% $91 $92 $93 $94 $95 $96 $97 $98 $99 $100 $101 $102 $103 $104 $105 #### ### ### #### $15,911,100 #### ### ### #### $18,538,000 #### #### ##### ##### $21,164,900 #### ### ### ####$467,974 #### ### ### ####$545,235 #### #### ##### #####$622,497 #### ### ### ####1.34% #### ### ### ####1.56% #### #### 1.69% 1.73%1.78% $91 $92 $93 $94 $95 $96 $97 $98 $99 $100 $101 $102 $103 $104 $105 #### ### ### #### $35,366,150 #### ### ### #### $39,017,000 #### #### ##### ##### $42,667,850 #### ### ### #### $1,040,181 #### ### ### ####$1,147,559 #### #### ##### #####$1,254,937 #### ### ### ####2.97% #### ### ### ####3.28% #### #### 3.46% 3.52%3.59% $91 $92 $93 $94 $95 $96 $97 $98 $99 $100 $101 $102 $103 $104 $105 #### ### ### #### $44,300,900 #### ### ### #### $48,422,000 #### #### ##### ##### $52,543,100 #### ### ### #### $1,302,968 #### ### ### ####$1,424,176 #### #### ##### #####$1,545,385 #### ### ### ####3.72% #### ### ### ####4.07% #### #### 4.28% 4.35%4.42% Page 2 of 3 Expense City Costs Lost Rent $11,600,000 Net lost Property tax $4,420,000 Net gain Property tax ($880,000) spend $6 mil reserve $6,000,000 Foregone interest on $6 mil reserve $9,000,000 $1 Mil principal balance City Yard move plus interest $2,250,000 advance Perm Yard move $6,500,000 Benefit cleanup ($1,200,000) Benefit settlement ($3,500,000) TOTAL COST $34,190,000 Additional Potential Direct City Costs (Paid from Project Fees or Un-Restricted Funds only) CBA Section Number (also see Table 23)low range Costs (in millions) high rangeRetain 97 Parking Spaces at New City Yard (Not including Debt Service 2x times principal)Section 9.3 8.80 8.80 8.80 Ongoing Project Monitoring Section 9.8 11.90 11.90 11.90 City Cost of Fire Dept upgrades Section 9.7 16.50 16.50 16.50 Loss of option to sell Self Storage land Section 9.4 3.50 4.55 5.60 Loss of option to sell City Yard land Section 7.5 4.18 5.58 6.97 Sub-Total Potential Direct City Costs 36.08 38.53 40.97 Potential loss of Property tax from Homeowner loss Section 9.9 Table 22 1.90 5.30 10.17 Potential gain of Property tax from E&B ($880,000 Total) Table 15,Section 8.1 based on CBA Medium (0.88)(0.88)(0.88) Total Potential Direct City Costs 37.10 42.95 50.26 These Costs and Net property tax loss of $1M to $10M NOT YET REDUCED FROM ABOVE ESTIMATES 1.02 4.42 9.29 10/09/2014 Check Register CITY OF HERMOSA BEACH 1 4:24:06PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75402 10/9/2014 17588 A AND A READY MIXED 2074775 Concrete mix 001-3104-4309 409.84 Total : 409.84 75403 10/9/2014 06827 ALL CITY MANAGEMENT 36254 Crossing Guard Service/ Aug 31- Sep 13 001-2101-4201 4,386.51 Total : 4,386.51 75404 10/9/2014 17442 ALMANZA, EDWARD P 22 Project Mgr-Enviro Rpt/ Jul 27 - Sep 16 001-2109 3,217.56 Total : 3,217.56 75405 10/9/2014 12470 AMERICAS TROPHY COMPANY 04718 Memorial Plaque 001-6101-5402 186.93 Total : 186.93 75406 10/9/2014 14898 AOKI, ELAYNE 04950 Fall 2014 Textbook reimbursement 001-2101-4317 223.83 Total : 223.83 75407 10/9/2014 09366 AQUA FLO 660965 Irrigation Supplies - Aug 14 001-6101-4309 355.95 664455 Irrigation Supplies - Sep 14 001-6101-4309 167.75 671484 Irrigation Supplies - Sep 14 001-6101-4309 248.01 673329 Irrigation Supplies - Sep 14 001-6101-4309 389.95 674829 Irrigation Supplies - Sep 14 001-6101-4309 433.95 676356 Irrigation Supplies - Sep 14 001-6101-4309 326.56 Total : 1,922.17 75408 10/9/2014 15141 BAYSIDE MEDICAL CENTER 2963 Medical Services - Dec 13 001-2101-4201 175.00 1Page: 10/09/2014 Check Register CITY OF HERMOSA BEACH 2 4:24:06PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75408 10/9/2014 (Continued)15141 BAYSIDE MEDICAL CENTER 4539 Medical Services - Feb 14 001-2101-4201 380.44 5294 Medical Services - Feb 14 001-2101-4201 243.70 6630 Medical Services - Mar 14 001-2101-4201 570.66 Total : 1,369.80 75409 10/9/2014 06409 BLUE DIAMOND MATERIALS 354984 RI Materials - Sep 14 001-3104-4309 134.69 365226 RI Materials - Sep 14 001-3104-4309 158.89 Total : 293.58 75410 10/9/2014 03190 BLUEPRINT SERVICE AND SUPPLY 192466 Printing Services - Sep 14 147-8160-4201 21.80 192506 Printing Services - Sep 14 001-4202-4305 232.80 Total : 254.60 75411 10/9/2014 00262 CALIFORNIA MARKING DEVICE 4479 Name plates 001-3302-4305 56.68 Total : 56.68 75412 10/9/2014 18737 CITYGATE ASSOCIATES 23438B Operational Assessment of Coop Fire Dept 001-2201-4201 1,271.50 Total : 1,271.50 75413 10/9/2014 18776 COMMANDSTAT ANALYTICS 113 Comstat Report w/ Goggle map training 001-2101-4201 450.00 Total : 450.00 75414 10/9/2014 00364 DEPARTMENT OF JUSTICE 057838 Fingerprinting - Sep 14 001-1203-4251 224.00 Total : 224.00 2Page: 10/09/2014 Check Register CITY OF HERMOSA BEACH 3 4:24:06PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75415 10/9/2014 15059 EVANS, MARLIN 04804 Instructor Pymt # 19977 & 19830 001-4601-4221 385.00 Total : 385.00 75416 10/9/2014 06344 FIRST CALL STAFFING SERVICES 0709-145023 Temp Services/ Week ending 09/21/14 001-4601-4112 912.00 Total : 912.00 75417 10/9/2014 05125 GHASSEMI PETTY CASH, MARIA 05054 Petty Cash Replenishment 001-1201-4305 232.67 001-1201-4394 36.77 001-2101-4305 29.90 715-3104-4311 55.02 001-2101-4317 52.13 001-2201-4309 46.18 001-2201-4317 23.65 001-3302-4317 67.84 001-4101-4305 9.77 001-4202-4317 57.00 001-4601-4201 81.74 001-4601-4308 80.00 001-4601-4302 18.80 715-1206-4305 32.69 001-2101-4313 97.70 Total : 921.86 75418 10/9/2014 14204 HARTZOG AND CRABILL INC 14-0374 Traffic Engineering Services - Aug 14 001-3104-4201 1,650.00 14-0584 Traffic Engineering Services - Jul 14 001-3104-4201 80.50 14-0585 Traffic Engineering Services - Jul 14 001-3104-4201 1,882.50 14-0586 Traffic Engineering Services - Jul 2014 001-3104-4201 160.00 14-0589 Citywide Engineering & Traffic Survey 001-3104-4201 3,811.50 3Page: 10/09/2014 Check Register CITY OF HERMOSA BEACH 4 4:24:06PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75418 10/9/2014 (Continued)14204 HARTZOG AND CRABILL INC 14-0644 Traffic Engineering Services - Aug 14 001-3104-4201 1,340.00 14-0645 Traffic Engineering Services - Aug 14 001-3104-4201 357.52 Total : 9,282.02 75419 10/9/2014 03432 HOME DEPOT CREDIT SERVICES 1010866 Hardware Supplies - Sep 14 001-4204-4309 225.63 1010867 Hardware Supplies - Sep 14 001-8614-4201 228.27 2062368 Hardware Supplies - Sep 14 001-4601-4308 180.94 4013390 Hardware Supplies - Sep 14 001-4204-4309 336.19 6144733 Hardware Supplies - Sep 14 001-4601-4308 45.12 7056380 Hardware Supplies - Sep 14 001-4601-4308 189.59 7133262 Hardware Supplies - Sep 14 001-4204-4309 493.95 Total : 1,699.69 75420 10/9/2014 02458 INGLEWOOD WHOLESALE ELECTRIC 246371-00 Electrical Supplies - Sep 14 001-4204-4309 95.92 246376-00 Electrical Supplies - Sep 14 105-2601-4309 465.79 Total : 561.71 75421 10/9/2014 12162 JOL DESIGN 06/30/2014 Hats for Valley Park Day Camp 001-4601-4201 64.31 Total : 64.31 75422 10/9/2014 09696 LA AREA FIRE CHIEFS ASSOC 385 Registration fee for B Grebbien 001-2201-4317 200.00 Total : 200.00 4Page: 10/09/2014 Check Register CITY OF HERMOSA BEACH 5 4:24:06PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75423 10/9/2014 00167 LEARNED LUMBER B418931 Lumber Sep 14 001-3104-4309 158.56 B421225 Lumber Sep 14 001-3104-4309 17.80 B422039 Lumber - Sep 14 001-4204-4309 36.35 Total : 212.71 75424 10/9/2014 02175 LIEBERT CASSIDY WHITMORE 1392506 Legal, RE: Personnel Matter/ Aug 14 001-1203-4201 79.50 Total : 79.50 75425 10/9/2014 18777 LOS ANGELES COUNTY OF BUSINESS, FILING & REGISTRATION05043Environmental filing fee 001-2109 3,104.75 Total : 3,104.75 75426 10/9/2014 18638 MAD SCIENCE OF LOS ANGELES 4601-04723 Instructor Pymt - W/E 8/22/14 001-4601-4221 1,113.00 Total : 1,113.00 75427 10/9/2014 18312 MANIACI INSURANCE SERVICES 580 Benefits Connect Services/ Aug 14 001-1203-4201 547.74 Total : 547.74 75428 10/9/2014 18071 MERCHANTS LANDSCAPE SERVICES 43492 Exterior Landscape Maintenance - Aug 14 001-6101-4201 16,190.00 43493 Exterior Landscape Maintenance Aug 14 105-2601-4201 3,306.00 Total : 19,496.00 75429 10/9/2014 18779 ORANGE CO SHERIFF'S ACADEMY 05056 Arrest / Control Tactics Update 001-2101-4317 15.00 Total : 15.00 75430 10/9/2014 16650 PAYPAL INC 34256207 Credit Processing - Prkg Meters/ Aug 14 5Page: 10/09/2014 Check Register CITY OF HERMOSA BEACH 6 4:24:06PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75430 10/9/2014 (Continued)16650 PAYPAL INC 001-3302-4201 35.14 001-3305-4201 263.85 001-3304-4201 463.26 001-3302-4201 140.87 35290527 Credit Processing - Prkg Meters/ Sep 14 001-3302-4201 143.91 001-3305-4201 751.22 001-3304-4201 1,154.58 001-3302-4201 509.47 Total : 3,462.30 75431 10/9/2014 11574 PHILLIPS, LANDON 05081 Travel Reimbursement 9/23 - 25/14 001-2101-4312 497.13 358 Travel Reimbursement - Trng Workshop 001-2101-4312 422.13 001-2101-4317 75.00 Total : 994.26 75432 10/9/2014 13838 PITNEY BOWES INC 49096100 Postage 001-1208-4305 2,000.00 Total : 2,000.00 75433 10/9/2014 18530 RALPH ANDERSON ASSOCIATES 11579 Classification & Compensation Study Sep 001-1203-4251 7,500.00 Total : 7,500.00 75434 10/9/2014 17903 SHERWIN WILLIAMS 50815 Paint - Aug 14 001-4204-4309 31.72 Total : 31.72 75435 10/9/2014 10532 SOUTH BAY FORD 431005 AUTO PARTS - SEP 14 715-6101-4311 92.68 432245 AUTO PARTS - SEP 14 715-2201-4311 2.12 Total : 94.80 6Page: 10/09/2014 Check Register CITY OF HERMOSA BEACH 7 4:24:06PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75436 10/9/2014 10314 SOUTHERN CALIF EDISON CO.2-01-414-1071 Electricity Aug 27 - Sep 26 14 001-4204-4303 3,761.98 2-01-414-2152 Electricity Aug 27 - Sep 26 14 001-6101-4303 1,584.96 2-01-414-3994 Electricity Aug 6 - Sep 5 14 160-3102-4303 79.32 2-01-414-4281 Electricity Aug 1 - Sep 1 14 105-2601-4303 456.85 2-01-414-5106 Electricity Aug 27 - Sep 26 14 001-3104-4303 552.28 Total : 6,435.39 75437 10/9/2014 00146 SPARKLETTS 4472788 091814 Drinking Water - Sep 14 001-4601-4305 136.35 Total : 136.35 75438 10/9/2014 00123 TRIANGLE HARDWARE 020065 Supplies - Sep 14 105-2601-4309 294.09 020066 Supplies - Sep 14 105-2601-4309 297.79 020067 Supplies - Sep 14 715-4206-4309 286.70 020068 Supplies - Sep 14 001-3104-4309 171.22 020069 Supplies - Sep 14 001-6101-4309 295.51 020070 Supplies - Sep 14 105-2601-4309 296.52 Total : 1,641.83 75439 10/9/2014 13494 WEISS, DENNIS L 3699 Window Envelopes Sep 14 001-1208-4305 638.50 Total : 638.50 75440 10/9/2014 18629 WESTERN ENGINEERING GROUP 02 Clark Field Lighting Control Design Sep 125-8602-4201 3,000.00 7Page: 10/09/2014 Check Register CITY OF HERMOSA BEACH 8 4:24:06PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 3,000.00 75440 10/9/2014 18629 WESTERN ENGINEERING GROUP 14909395 10/9/2014 14008 YORK SCRMA 10062014 W/Comp Claims - 9/29/14 705-1217-4324 3,061.96 Total : 3,061.96 Bank total : 81,859.40 40 Vouchers for bank code :boa 81,859.40Total vouchers :Vouchers in this report 40 "I hereby certify that the demands or claims covered by the checks listed on pages 1 to 8 inclusive, of the check register for 10-9-14 are accurate funds are available for payment, and are in conformance to the budget." By Finance Director Date 10-20-14 8Page: 10/09/2014 Check Register CITY OF HERMOSA BEACH 1 5:12:35PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75441 10/9/2014 11574 PHILLIPS, LANDON 05081 Travel Reimbursement 9/23 - 25/14 001-2101-4312 497.13 Total : 497.13 Bank total : 497.13 1 Vouchers for bank code :boa 497.13Total vouchers :Vouchers in this report 1 "I hereby certify that the demands or claims covered by the checks listed on pages 1 to 1 inclusive, of the check register for 10-9-14 are accurate funds are available for payment, and are in conformance to the budget." By Finance Director Date 10-20-14 1Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 1 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75442 10/16/2014 00321 A T AND T 248 134-9454 462 8 Circuit Billing - Oct 14 001-2101-4304 26.93 310 796-6526 991 3 Circuit Billing - Sep 14 001-2101-4304 237.83 331 254-6071 301 5 Circuit Billing - Sep 14 001-2101-4304 114.71 333 267-6155 686 9 Circuit Billing - Sep 14 001-2101-4304 376.86 333 267-6160 767 0 Circuit Billing - Sep 14 001-2101-4304 118.27 333 267-6161 416 3 Circuit Billing - Sep 14 001-2101-4304 118.27 333 267-6164 193 5 Circuit Billing - Sep 14 001-2101-4304 101.11 333 267-6165 717 0 Circuit Billing - Sep 14 001-2101-4304 100.88 Total : 1,194.86 75443 10/16/2014 18778 ACCOUNTING PRINCIPLES 6591470 Temp Services - Accts Payable Clerk 001-1202-4201 250.00 6603999 Temp Services - Accts Payable Clerk 001-1202-4201 1,000.00 Total : 1,250.00 75444 10/16/2014 06290 AIR SOURCE INDUSTRIES INC 00628898 Oxygen Refill - Sep 14 001-2201-4309 396.60 Total : 396.60 75445 10/16/2014 06827 ALL CITY MANAGEMENT 36503 Crossing Guard Service/ Sep 14 - Sep 27 001-2101-4201 5,499.00 Total : 5,499.00 75446 10/16/2014 06421 ALL STAR FIRE EQUIPMENT INC 176224 SCBA Flow Test 001-2201-4201 975.00 Total : 975.00 1Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 2 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75447 10/16/2014 18792 ALLAN, CARRIE 04923 Cash Key Dep & Bal Refund/ # 134722 001-2117 16.50 001-3851 4.25 Total : 20.75 75448 10/16/2014 16893 AMERICAN MICRO IMAGING, INC 46643 Annual Laserfiche software 153-2106-4201 5,466.00 Total : 5,466.00 75449 10/16/2014 12275 APWA SOUTHERN CA CHAPTER 106 Training - J Cordova 001-4202-4315 399.00 Total : 399.00 75450 10/16/2014 18818 BAUTISTA, RAYMOND 05071 Citation Refund/ # 1812019039 001-3302 53.00 Total : 53.00 75451 10/16/2014 15141 BAYSIDE MEDICAL CENTER 4871 Medical Services - Sep 14 001-2101-4201 127.20 Total : 127.20 75452 10/16/2014 16371 BEACH GIRL PROPERTIES LLC 133 Parking Meters - 70 14th Street/ Oct 14 001-3842 650.00 Total : 650.00 75453 10/16/2014 18785 BENTLEY, TOMOKO 05090 Cash Key Dep & Bal Refund/ # 121876 001-2117 14.50 001-3851 15.75 Total : 30.25 75454 10/16/2014 18786 BOKAL, STEPHEN 05120 Citation Refund/ # 1711002594 001-3302 48.00 Total : 48.00 75455 10/16/2014 08482 BOUND TREE MEDICAL LLC 81539943 Medical Supplies - Sep 14 001-2201-4309 237.63 Total : 237.63 2Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 3 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75456 10/16/2014 16992 BRANDMAN UNIVERSITY 05112 Tuit Fall 14/ J Crawford ID B00228437 001-2201-4317 1,850.00 Total : 1,850.00 75457 10/16/2014 00163 BRAUN LINEN SERVICE 1195583 LINEN SERVICE - SEP 14 001-2101-4306 148.60 1197062 LINEN SERVICE - SEP 14 001-2101-4306 129.51 1198549 LINEN SERVICE - SEP 14 001-2101-4306 73.04 1200049 LINEN SERVICE - SEP 14 001-2101-4306 82.35 1201498 LINEN SERVICE - SEP 14 001-2101-4306 71.33 Total : 504.83 75458 10/16/2014 00261 CA PEACE OFFICERS ASSOCIATION 05031 Membership renewal 001-2101-4315 375.00 Total : 375.00 75459 10/16/2014 15663 CALIFORNIA BUILDING STANDARDS 05048 Bldg Standards Admin Fee Report/ 1st 001-3204 317.70 Total : 317.70 75460 10/16/2014 00016 CALIFORNIA WATER SERVICE 4286211111 Water Usage - Sep 14 105-2601-4303 3,288.55 001-4204-4303 1,228.29 001-3304-4303 240.27 001-6101-4303 24,106.69 Total : 28,863.80 75461 10/16/2014 18069 CALIFORNIA, STATE OF A4667 E&B Oil Prod Consultation- Jul 14 001-2109 1,062.40 A4713 E & B Oil Prod consultation- Aug 14 001-2109 399.36 Total : 1,461.76 3Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 4 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75462 10/16/2014 18800 CARTER, PETER 05004 Citation Refund/ # 200109391 001-3302 38.00 Total : 38.00 75463 10/16/2014 00634 CHEVRON AND TEXACO CARD SER 42497554 Gas Card Purchases/ Sep 14 715-2101-4310 803.10 Total : 803.10 75464 10/16/2014 09224 CHRISTOPHER CONSTRUCTION, JAMES12-637 Replacement of approach - PD 715-2101-5405 2,500.00 Total : 2,500.00 75465 10/16/2014 15800 CLENDENIN, JAY 05121 Cash Key Deposit Refund/ # 88113 001-2117 42.00 Total : 42.00 75466 10/16/2014 03674 CPS HUMAN RESOURCE SERVICES TR108645 Test materials/ CSO exam 001-1203-4201 1,314.50 Total : 1,314.50 75467 10/16/2014 02823 CRAWFORD, JAMES 05113 Textbook reimbursement Fall 14 001-2201-4317 75.39 Total : 75.39 75468 10/16/2014 17703 CULINARY DIMENSIONS 092914 Rest/Bar 50/50 Audits - Aug 14 001-1101-4201 2,295.00 Total : 2,295.00 75469 10/16/2014 13701 CURRAN, GERARD 04814 Plumbing Services - Aug 14 001-4204-4201 975.00 Total : 975.00 75470 10/16/2014 00850 CURTIS, L N 1328399-00 Emergency repair - thermal camera 001-2201-4309 435.99 Total : 435.99 75471 10/16/2014 00642 DAILY BREEZE, THE 0010567080 Classified Ad - Sr Acct Clk Sep 14 001-1203-4201 539.50 4Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 5 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75471 10/16/2014 (Continued)00642 DAILY BREEZE, THE 0010570190 Classified Ad - Comm Serv Offc Sep 14 001-1203-4201 585.00 0010572548 Classified Ad - Pub Wrks Crewleader Sep 001-1203-4201 598.00 Total : 1,722.50 75472 10/16/2014 18446 DANCE N ASSOCIATION LLC, TINA LEDER04989 Instructor payment - Hip Hop class 001-4601-4221 192.50 Total : 192.50 75473 10/16/2014 14171 DAVOODIAN, MICHAEL 110707 Business cards - Sep 14 001-1208-4305 452.63 Total : 452.63 75474 10/16/2014 12991 DELL MARKETING LP XJJT37KP6 Computer Workstation 001-2101-5401 1,558.12 Total : 1,558.12 75475 10/16/2014 00049 DEPARTMENT OF CONSERVATION 05047 Strong Motion Mapping Fee - 1st Qtr 001-3204 724.71 Total : 724.71 75476 10/16/2014 17868 DONNOE & ASSOCIATES, INC 2092 Test materials for Sr Account Clerk 001-1203-4201 1,225.00 Total : 1,225.00 75477 10/16/2014 00181 EASY READER HD14-055 LEGAL ADS 8/7/14 - 9/11/14 001-1121-4323 292.13 HD14-056 LEGAL ADS 8/7/14 - 9/11/14 001-1121-4323 210.00 HD14-057 LEGAL ADS 8/7/14 - 9/11/14 001-1121-4323 126.00 HD14-058 LEGAL ADS 8/7/14 - 9/11/14 001-1121-4323 94.50 HD14-059 LEGAL ADS 8/7/14 - 9/11/14 001-1121-4323 266.50 5Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 6 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75477 10/16/2014 (Continued)00181 EASY READER HD14-060 LEGAL ADS 8/7/14 - 9/11/14 001-1121-4323 123.00 HD14-061 LEGAL ADS 8/7/14 - 9/11/14 001-1121-4323 189.00 HD14-062 LEGAL ADS 8/7/14 - 9/11/14 001-1121-4323 99.75 HD14-063 LEGAL ADS 8/7/14 - 9/11/14 001-1121-4323 115.50 HD14-064 LEGAL ADS 8/7/14 - 9/11/14 001-1121-4323 152.25 Total : 1,668.63 75478 10/16/2014 15761 EMERGENCY VEHICLE GROUP, INC 4184 2014 Chev G-3500 Ambulance 715-2201-5403 146,676.54 Total : 146,676.54 75479 10/16/2014 08422 FIRE INFORMATION SUPPORT SERV 1063 Prof services 3rd Qtr CSFM 2014 001-2201-4201 250.00 Total : 250.00 75480 10/16/2014 06344 FIRST CALL STAFFING SERVICES 0709-145141 Temp Services/ Denise Rakas 001-4601-4112 615.60 Total : 615.60 75481 10/16/2014 18796 FISCHER HOFFMAN, SAGE 05001 Citation Refund/ # 200116735 001-3302 53.00 Total : 53.00 75482 10/16/2014 18802 FISHMAN, ALAN 05018 Cash Key Deposit Refund/ # 214042 001-2117 42.00 Total : 42.00 75483 10/16/2014 18803 FULLER, SARAH 05005 Citation Refund/ # 200100539 001-3302 38.00 Total : 38.00 6Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 7 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75484 10/16/2014 18811 GAY, SARAH 05064 Citation Refund/ # 1111002532 001-3302 53.00 Total : 53.00 75485 10/16/2014 18797 GONSALES, GEORGETTE 05002 Citation Refund/ # 200082052 001-3302 48.00 Total : 48.00 75486 10/16/2014 18793 HEIM, FRED 04897 Cash Key Deposit Refund/ # 135396 001-2117 33.00 Total : 33.00 75487 10/16/2014 18784 HERRICK, TERRI 05080 Citation Refund/ # 200105815 001-3302 28.00 Total : 28.00 75488 10/16/2014 18344 HIRSCHMANN, JAMES 04926 Cash Key Dep & Bal Refund/ # 75672 001-2117 21.00 001-3851 25.00 Total : 46.00 75489 10/16/2014 02458 INGLEWOOD WHOLESALE ELECTRIC 246251-00 Electrical Supplies - Aug 14 105-2601-4309 28.35 246337-00 Electrical Supplies - Sep 14 105-2601-4309 163.51 246357-00 Electrical Supplies - Sep 14 105-2601-4309 137.35 246358-00 Electrical Supplies - Sep 14 105-2601-4309 119.91 246397-00 Electrical Supplies - Sep 14 105-2601-4309 110.52 Total : 559.64 75490 10/16/2014 00668 INTERNATIONAL INST OF 05055 Annual membership fee thru 12/15 001-1121-4315 180.00 Total : 180.00 7Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 8 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75491 10/16/2014 18804 JOSHI, PIYUSH 05007 Citation Refund/ # 200017419 001-3302 38.00 Total : 38.00 75492 10/16/2014 18809 KIMBERLIN, PATRICK 05036 Citation Refund/ # AC-0183 001-3305 100.00 Total : 100.00 75493 10/16/2014 18318 KINNON, CHRISTOPHER KELLY 05012 Citation Refund/ # 200113977 001-3302 48.00 Total : 48.00 75494 10/16/2014 15784 KKC DEVELOPMENT INC 05021 Citation Refund/ # 200135316 001-3302 28.00 Total : 28.00 75495 10/16/2014 11251 KNICKERBOCKER, JANICE S.05009 Citation Refund/ # 200101939 001-3302 53.00 Total : 53.00 75496 10/16/2014 18816 KRAMER, JESSE 05069 Citation Refund/ # 1611004022 001-3302 48.00 Total : 48.00 75497 10/16/2014 18789 KRUSE, DIANE 05119 Citation Refund/ # 200092986 001-3302 76.00 Total : 76.00 75498 10/16/2014 17652 LARKIN, SUZANNE 05008 Citation Refund/ # 200092445 001-3302 53.00 Total : 53.00 75499 10/16/2014 10677 LAWRENCE, LARRY October 3 2014 Staff Support Services/ Sep 14 117-5301-4201 246.50 Total : 246.50 75500 10/16/2014 18799 LEE, RUBY 05003 Citation Refund/ # 200114230 001-3302 53.00 8Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 9 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 53.00 75500 10/16/2014 18799 LEE, RUBY 75501 10/16/2014 14111 LONNQUIST, GEORGIA 05082 Reimbursement for storage buffet 001-2101-5402 624.98 Total : 624.98 75502 10/16/2014 18817 LORD, TAYLOR 05070 Citation Refund/ # 200097438 001-3302 101.00 Total : 101.00 75503 10/16/2014 18798 MAC INNES, BRUCE 05023 Cash Key Deposit Refund/ # 161954 001-2117 21.00 Total : 21.00 75504 10/16/2014 18274 MAGNUM VENTURE PARTNERS 04990 Instructor payment - Volleyball class 001-4601-4221 465.50 Total : 465.50 75505 10/16/2014 18788 MALAMUD, ZACHARY 05118 Citation Refund/ # 200087032 001-3302 53.00 Total : 53.00 75506 10/16/2014 18783 MAR VAC ELECTRONICS 71155049 Replacement Microphones - Box Office 001-4601-4201 325.08 Total : 325.08 75507 10/16/2014 10768 MARIN CONSULTING ASSOCIATES 04593 Leadership training - T Thompson 001-2101-4312 240.00 Total : 240.00 75508 10/16/2014 18813 MC BRIDE, CONNOR 05066 Citation Refund/ # 1611009580 001-3302 83.00 Total : 83.00 75509 10/16/2014 13923 MEDIC BATTERIES 139837 9 volt parking meter batteries 001-3302-4309 1,679.00 Total : 1,679.00 9Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 10 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75510 10/16/2014 18794 MONTGOMERY, HENRY 04918 Cash Key Deposit Refund/ # 163000 001-2117 21.00 Total : 21.00 75511 10/16/2014 13791 MONTROSE AND ASSOCIATES INC 25183 A/V Equipment for Council Chambers 715-4204-5402 2,818.79 Total : 2,818.79 75512 10/16/2014 18787 MOW, JOHN 05117 Citation Refund/ # 200084773 001-3302 53.00 Total : 53.00 75513 10/16/2014 18815 MULLER, MICHAEL 05068 Citation Refund/ # 1511009536 001-3302 53.00 Total : 53.00 75514 10/16/2014 17032 NITZCHNER, CONNIE 258739 Theatre Damage Deposit Refund 001-2111 500.00 Total : 500.00 75515 10/16/2014 18810 OLSEN, MEGAN 05063 Citation Refund/ # 200133398 001-3302 28.00 Total : 28.00 75516 10/16/2014 09513 PACIFIC COAST CONSTRUCTION 2044 Electrical Install - Lot A Trash 001-8651-4201 7,500.00 Total : 7,500.00 75517 10/16/2014 18588 PACIFIC COAST ENTERTAINMENT 124375 Theatre Equip - Elation Strip 5Bay 001-4601-4102 2,489.57 Total : 2,489.57 75518 10/16/2014 00608 PEP BOYS 08141025452 AUTO SUPPLIES - SEP 14 715-4601-4311 26.15 08141025880 AUTO SUPPLIES - SEP 14 715-2601-4311 72.20 08141025881 AUTO SUPPLIES - SEP 14 715-6101-4311 79.13 10Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 11 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75518 10/16/2014 (Continued)00608 PEP BOYS 08141026095 AUTO SUPPLIES - SEP 14 715-2101-4311 43.60 Total : 221.08 75519 10/16/2014 17064 PET MART 00572 Pet food 170-2105-4309 108.98 Total : 108.98 75520 10/16/2014 18801 PETERSON TRUST, D L 05019 Citation Refund/ # 107463 001-3302 68.00 Total : 68.00 75521 10/16/2014 13838 PITNEY BOWES INC 2196402-SP14 Leasing charges Jun 30 - Sep 30 14 715-1208-4201 455.18 Total : 455.18 75522 10/16/2014 00740 POSTMASTER, UNITED STATES 05086 Replenish Bulk Mail Permit #460 001-1204-4305 3,000.00 Total : 3,000.00 75523 10/16/2014 18805 PRELL, EDWARD 05011 Citation Refund/ # 200117648 001-3302 48.00 Total : 48.00 75524 10/16/2014 17676 PRUDENTIAL OVERALL SUPPLY 40827477 MATS AND TOWELS - AUG 14 001-2201-4309 27.18 40827478 MATS - AUG 14 001-4204-4309 46.28 40827479 MATS - AUG 14 001-3302-4309 26.78 40827480 MATS - AUG 14 001-4204-4309 33.68 40827481 SHOP TOWELS - AUG 14 715-4206-4309 19.68 40827482 UNIFORM RENTAL - AUG 14 001-4202-4314 47.69 11Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 12 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75524 10/16/2014 (Continued)17676 PRUDENTIAL OVERALL SUPPLY 40827483 MATS - AUG 14 001-2101-4309 33.08 40827484 MATS AND TOWELS - AUG 14 001-3104-4309 24.18 40829896 UNIFORM RENTAL - SEP 14 001-4202-4314 43.90 40832238 MATS AND TOWELS - SEP 14 001-2201-4309 27.18 40832239 MATS - SEP 14 001-4204-4309 46.28 40832240 MATS - SEP 14 001-3302-4309 26.78 40832241 MATS - SEP 14 001-4204-4309 33.68 40832242 SHOP TOWELS - SEP 14 715-4206-4309 19.68 40832243 UNIFORM RENTAL - SEP 14 001-4202-4314 41.58 40832244 MATS - SEP 14 001-2101-4309 33.08 40832245 MATS AND TOWELS SEP 14 001-3104-4309 24.18 40834550 UNIFORM RENTAL - SEP 14 001-4202-4314 40.06 40836909 MATS AND TOWELS - SEP 14 001-2201-4309 27.18 40836910 MATS - SEP 14 001-4204-4309 46.28 40836911 MATS - SEP 14 001-3302-4309 26.78 40836912 MATS - SEP 14 001-4204-4309 33.68 40836913 SHOP TOWELS - SEP 14 715-4206-4309 19.68 12Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 13 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75524 10/16/2014 (Continued)17676 PRUDENTIAL OVERALL SUPPLY 40836914 UNIFORM RENTAL - SEP 14 001-4202-4314 40.82 40836915 MATS - SEP 14 001-2101-4309 33.08 40836916 MATS AND TOWELS - SEP 14 001-3104-4309 24.18 Total : 846.63 75525 10/16/2014 13255 REDMOND, GEORGE DAVID 32023 Schlage L9070 X 06L Lock 001-4204-4309 490.50 32024 Schlage L9070 X 062 lock 001-4204-4309 490.50 32025 Remove lock and install new lock 001-4204-4309 377.50 Total : 1,358.50 75526 10/16/2014 18596 ROCK N ROLL CAR WASH LLC RNR-020114-02 CITY CAR WASH - FEB 14 715-2024 200.50 RNR-030114-02 CITY CAR WASH - MAR 14 715-2024 255.50 RNR-050114-02 CITY CAR WASH - MAY 14 715-2024 405.00 RNR-060114-02 CITY CAR WASH - JUN 14 715-2024 240.00 RNR-070114-02 City car wash - Jul 14 715-4202-4311 25.00 715-3302-4311 25.00 715-2201-4311 10.00 715-4201-4311 15.00 715-2101-4311 305.00 Total : 1,481.00 75527 10/16/2014 18790 RYAN, PATRICK EVAN 05059 Citation Refund/ # AC-0186 001-3305 100.00 Total : 100.00 13Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 14 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75528 10/16/2014 18791 SHERER, WILLIAM OR FAYE 05052 Citation Refund/ # 200087070 001-3302 10.00 Total : 10.00 75529 10/16/2014 17903 SHERWIN WILLIAMS 5081-5 Painting supplies - Aug 14 001-4204-4309 31.72 Total : 31.72 75530 10/16/2014 18806 SLONAKER, JAMIE 05016 Citation Refund/ # 200096807 001-3302 38.00 Total : 38.00 75531 10/16/2014 00114 SMART AND FINAL IRIS COMPANY 114869 General meetings supplies - Sep 14 001-1101-4305 87.70 119565 Park Program Supplies - Sep 14 001-4601-4308 294.26 120017 Jail Supplies - Sep 14 001-2101-4306 71.73 122799 Office Supplies - Sep 14 001-4601-4305 43.76 122801 Sr Center Supplies - Sep 14 001-4601-4328 80.54 126372 Rabies Clinic supplies - Sep 14 001-3302-4305 152.50 128760 Park Program supplies - Sep 14 001-4601-4308 294.82 129148 Cleaning supplies - Sep 14 001-4601-4305 13.06 129267 Cleaning supplies - Sep 14 001-4204-4309 511.58 Total : 1,549.95 75532 10/16/2014 18780 SMITH, GARY 05088 Carpet installation - Oct 14 001-2201-4305 225.00 Total : 225.00 75533 10/16/2014 10532 SOUTH BAY FORD FXCS882957 Auto Parts Purchase - Sep 14 14Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 15 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75533 10/16/2014 (Continued)10532 SOUTH BAY FORD 715-2101-4311 152.55 Total : 152.55 75534 10/16/2014 00159 SOUTHERN CALIFORNIA EDISON CO 2-00-989-6911 Electrical Billing - Sep 14 105-2601-4303 157.89 2-00-989-7315 Electricity - Sep 14 105-2601-4303 14,012.12 2-01-836-7458 Electrical Billing - Sep 14 105-2601-4303 16.41 2-02-274-0542 Electrical Billing - Sep 14 001-6101-4303 25.81 2-08-629-3669 Electricity - Sep 14 001-4204-4303 129.66 2-09-076-5850 Electrical Billing - Sep 14 105-2601-4303 161.89 2-19-024-1604 Electrical Billing - Sep 14 001-4204-4303 3,618.84 2-20-128-4825 Electricity - Sep 14 001-3304-4303 1,677.56 2-20-128-5475 Electricity - Sep 14 001-4204-4303 203.86 2-20-984-6179 Electrical Billing - Sep 14 105-2601-4303 25.91 2-20-984-6369 Electricity - Sep 14 105-2601-4303 131.38 2-21-400-7684 Electrical Billing - Sep 14 105-2601-4303 35.88 2-21-964-8003 Electrical Billing - Sep 14 105-2601-4303 24.63 2-23-687-8021 Electricity - Sep 14 001-3104-4303 54.10 2-23-725-4420 Electricity - Sep 14 001-4204-4303 8,537.66 2-26-686-5930 Electrical Billing - Sep 14 105-2601-4303 559.02 15Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 16 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75534 10/16/2014 (Continued)00159 SOUTHERN CALIFORNIA EDISON CO 2-31-250-3303 Electricity - Sep 14 001-4204-4303 35.37 2-33-095-1989 Electrical Billing - Sep 14 105-2601-4303 25.91 Total : 29,433.90 75535 10/16/2014 18782 SOWERS JR, JAMES A 04987 Instructor payment - Math Champions 001-4601-4221 161.00 Total : 161.00 75536 10/16/2014 10098 SPRINT NEXTEL COMMUNICATIONS 269424317-154 Cell Phone Usage - Sep 14 153-2106-4201 420.00 Total : 420.00 75537 10/16/2014 15373 ST ABRAAM CHURCH 258753/258695 Security Deposit Refund 001-2111 572.50 Total : 572.50 75538 10/16/2014 09532 STAPLES ADVANTAGE 8031511230 Office Supplies/ Sep 14 001-2101-4305 207.20 Total : 207.20 75539 10/16/2014 18808 STEWART, GINA 05020 Citation Refund/ # 200129612 001-3302 28.00 Total : 28.00 75540 10/16/2014 14019 SUNSTATE EQUIPMENT COMPANY 5750497-006 Generator Rental - 7/30/14 - 8/27/14 001-8651-4201 1,146.47 Total : 1,146.47 75541 10/16/2014 16735 TORRANCE AUTO PARTS 043691 AUTO PARTS - SEP 14 715-6101-4311 198.13 043692 AUTO PARTS - SEP 14 715-2101-4311 101.40 043698 AUTO PARTS - SEP 14 715-6101-4311 39.17 16Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 17 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75541 10/16/2014 (Continued)16735 TORRANCE AUTO PARTS 044282 AUTO PARTS - SEP 14 715-2101-4311 92.35 045085 AUTO PARTS - SEP 14 715-2101-4311 44.47 045087 AUTO PARTS - SEP 14 715-3104-4311 21.68 045089 AUTO PARTS - SEP 14 715-3102-4311 40.53 045091 AUTO PARTS - SEP 14 715-3302-4311 63.85 045093 AUTO PARTS - SEP 14 715-6101-4311 60.04 045102 AUTO PARTS - SEP 14 715-2201-4311 48.05 045670 AUTO PARTS - SEP 14 715-3302-4311 9.25 Total : 718.92 75542 10/16/2014 00123 TRIANGLE HARDWARE 020105 Hardware Supplies - Sep 14 001-3104-4309 226.73 020106 Hardware Supplies - Sep14 105-2601-4309 257.17 020107 Hardware Supplies - Sep 14 001-6101-4309 115.03 020108 Hardware supplies - Sep 14 715-4206-4309 35.77 020109 Hardware supplies - Sep 14 001-4204-4309 237.48 020110 Hardware supplies - Sep 14 001-4204-4309 248.02 020111 Hardware supplies - Sep 14 001-4204-4309 250.68 020112 Hardware supplies - Sep 14 001-4204-4309 179.82 17Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 18 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 1,550.70 75542 10/16/2014 00123 TRIANGLE HARDWARE 75543 10/16/2014 14007 ULINE 62012788 12" Impulse Poly Bag Sealer 001-2101-4306 169.00 Total : 169.00 75544 10/16/2014 13533 VAZQUEZ, GERALDINE 258788 Theatre Security Deposit Refund 001-2111 235.00 Total : 235.00 75545 10/16/2014 18807 VERDUGO JR, REYNALDO 05017 Citation Refund/ # 200070774 001-3302 106.00 Total : 106.00 75546 10/16/2014 18666 VERIZON BUSINESS SERVICES 69307498 VoIP Services - Aug 14 001-2101-4304 55.69 001-2201-4304 18.55 69307897 VoIP Services - Aug 14 001-3302-4304 92.79 69307903 VoIP Services - Aug 14 001-4202-4304 148.47 69307909 VoIP Services - Aug 14 001-2201-4304 64.13 Total : 379.63 75547 10/16/2014 00015 VERIZON CALIFORNIA 310 318-6379 Phone Charges - Sep 25 - 10 24 14 18Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 19 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount 75547 10/16/2014 (Continued)00015 VERIZON CALIFORNIA 001-1121-4304 5.08 001-1132-4304 2.69 001-1141-4304 1.29 001-1201-4304 3.91 001-1202-4304 16.47 001-1203-4304 16.74 001-1208-4304 0.66 001-2101-4304 126.39 001-2201-4304 74.51 001-4101-4304 11.32 001-4201-4304 19.13 001-4202-4304 59.43 001-4601-4304 29.03 001-1204-4304 17.74 001-3302-4304 1.80 715-1206-4304 5.64 310 318-8751 090128 Phone Charges - Oct 14 001-1204-4201 57.13 310 UH9-9686 060508 Phone Charges - Sep 14 001-2101-4304 167.52 Total : 616.48 75548 10/16/2014 16294 VISION INTERNET PROVIDERS INC 28538 Web Hosting monthly fee - Oct 14 715-1206-4201 200.00 Total : 200.00 75549 10/16/2014 18795 VOISEY, CHRIS 04851 Cash Key Deposit Refund/ # 165544 001-2117 21.00 Total : 21.00 75550 10/16/2014 01029 WALTER F STEPHENS, INC.0078407-IN Jail supplies - Sep 14 001-2101-4306 137.40 Total : 137.40 75551 10/16/2014 18814 WEIDELL, CAROLYN 05067 Citation Refund/ # 1411010431 001-3302 53.00 19Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 20 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount (Continued)Total : 53.00 75551 10/16/2014 18814 WEIDELL, CAROLYN 75552 10/16/2014 18629 WESTERN ENGINEERING GROUP 02 Prog Payment #2 - Pier Ave Project 301-8649-4201 6,700.00 Total : 6,700.00 75553 10/16/2014 18819 WHILDEN, KEVIN 2000013-003 Theatre Damage Deposit Refund 001-2111 500.00 Total : 500.00 75554 10/16/2014 15188 WILLDAN FINANCIAL SERVICES 010-25552 District Admin/ Jul 14 - Sep 14 137-1219-4201 406.39 138-1219-4201 474.08 136-1219-4201 300.92 139-1219-4201 339.24 135-1219-4201 353.27 Total : 1,873.90 75555 10/16/2014 18812 WILLIAMS, SUZANNE 05065 Citation Refund/ # 1611007374 001-3302 38.00 Total : 38.00 75556 10/16/2014 18781 YINGLING, JENNIFER LYNNE 04988 Instructor payment - Basketball Develop 001-4601-4221 539.00 Total : 539.00 75557 10/16/2014 16729 ZAPPIA LAW FIRM APC, THE 14-08-30 Legal, RE: Personnel Matters/ Aug 14 001-1203-4201 5,021.17 Total : 5,021.17 75558 10/16/2014 10505 ZOLL MEDICAL CORP 2169434 Medical supplies - Sep 14 001-2201-4309 457.80 Total : 457.80 141942 10/16/2014 14691 ADMINSURE AS AGENT FOR THE 10132014 Disability Settlement 705-1217-4324 62,679.25 Total : 62,679.25 20Page: 10/16/2014 Check Register CITY OF HERMOSA BEACH 21 4:11:09PM Page:vchlist Bank code :boa Voucher Date Vendor Invoice Description/Account Amount Bank total : 355,825.56 118 Vouchers for bank code :boa 355,825.56Total vouchers :Vouchers in this report 118 "I hereby certify that the demands or claims covered by the checks listed on pages 1 to 21 inclusive, of the check register for 10-16-14 are accurate funds are available for payment, and are in conformance to the budget." By Finance Director Date 10-20-14 21Page: October 21, 2014 Honorable Mayor and Members Regular Meeting of of the Hermosa Beach City Council October 28, 2014 TENTATIVE FUTURE AGENDA ITEMS WEDNESDAY, NOVEMBER 5, 2014 @ 6:00 PM PRESENTATIONS DONATION CHECK FROM CHAMBER OF COMMERCE PRESENTED TO HERMOSA BEACH NON-PROFITS LEADERSHIP HERMOSA EMERGING LEADER AWARD WINNERS CONSENT CALENDAR Recommendation to receive and file the action minutes of the Public Works Commission meeting of September 17, 2014 Public Works Director Recommendation to receive and file the action minutes of the Parks, Recreation and Community Resources Advisory Commission meeting of October 7, 2014 Assistant to the City Manager MOU for Surf Memorial Assistant to the City Manager Award of Contract for design of Surf Memorial Statue Assistant to the City Manager Subrecipient Agreement for Homeland Security Grant Program Fire Chief PUBLIC HEARINGS - 7:30 PM Appeal denial of more than two household pets permit (Continued from meeting of October 14, 2014) Police Chief MUNICIPAL MATTERS Amendments to Municipal Code to reclassify certain violations from Administrative to Criminal (Continued from meeting of October 14, 2014) Police Chief Carbon Neutral Municipality: A. SCE Street Light Energy Efficiency: Update Report B. Municipal GHG Emissions Inventory: Update Report (SBCCOG) C. Community Policy, Direction on Plan Development D. Economic Comparison E. Solar Report – Early Actions and Overall Report Community Development Director Fee Discussion – EV Chargers Public Works Director MISCELLANEOUS ITEMS AND REPORTS - CITY MANAGER Pier Safety Update City Manager Update on Free Parking Management Analyst Update on General Plan Community Development Director MISCELLANEOUS ITEMS AND MEETING ATTENDANCE REPORTS - CITY COUNCIL City Council Committee Assignments (Continued from meeting of September 9, 2014) City Clerk Schedule Applicant Interviews for two Public Works Commission Vacancies(Continued from meeting of October 14, 2014) City Clerk OTHER MATTERS - CITY COUNCIL 2 NOVEMBER 13, 2014 @ 5:30PM INTERVIEWS FOR PUBLIC WORKS COMMISSIONERS NOVEMBER 13, 2014 @ 6:00PM STUDY SESSION: EMERGENCY PREPAREDNESS AT EOC THURSDAY, NOVEMBER 13, 2014 CONSENT CALENDAR Strand/Pier EIR Contract Community Development Director MUNICIPAL MATTERS Oil Project Update Community Development Director Video Cameras – Pier Plaza Police Chief Downtown Core Revitalization Strategy: Catalyst Projects/Use of City Assets Community Development Director Stormwater MOU Public Works Director MISCELLANEOUS ITEMS AND REPORTS - CITY MANAGER Living Streets Update Report Public Works Director MISCELLANEOUS ITEMS AND MEETING ATTENDANCE REPORTS - CITY COUNCIL Board/Commission Expiration of Terms – Appoint Public Works Commissioners City Clerk NOVEMBER 25, 2014 @ 5:30PM CLOSED SESSION: CITY MANAGER PERFORMANCE REVIEW TUESDAY, NOVEMBER 25, 2014 CONSENT CALENDAR Recommendation to receive and file the action minutes of the Emergency Preparedness Advisory Commission meeting of September 15, 2014 Fire Chief Recommendation to receive and file the action minutes of the Planning Commission meeting of November 18, 2014 Community Development Director MUNICIPAL MATTERS Compensation Study and Policy Direction Assistant to the City Manager MISCELLANEOUS ITEMS AND REPORTS - CITY MANAGER City Attorney Services City Manager Cypress Avenue – Direction on Zoning Changes for Manufacturing Uses Community Development Director 3 PENDING ITEMS Consideration of reduction of business license fee request from Carol G. Weiss, Ph.D. Finance Director Green Zone Recommendations and the Installation of Silver and Green Meters Downtown Police Chief Procurement Policies – RFP City Manager Ethics Policy City Manager & Finance Director SCE Update City Manager Food Truck Community Development Director Pier Plaza Smoking Enforcement & Underage Ordinance Police Chief National Citizen Survey Overview Assistant to the City Manager Public Information and Communications Plan Adoption City Manager DECEMBER 2014 Comprehensive City Facilities Master Plan – Award Contract Public Works Director Carbon Neutral Municipality: A. Final SCAG Report: Setting Target, Action Plan, Funding – Employee Commute Program B. Net Zero Carbon Policy for City Facilities and Service Delivery Analysis C. Renewable Energy Policy for City Facilities and Service Delivery Community Development Director Strategic Plan – Quarterly Update City Manager Storm Drain Maintenance Contract Public Works Director Events Policy Discussion (Continued) Assistant to the City Manager Fiesta Discussion Assistant to the City Manager General Plan/Coastal Land Use Plan: Confirmation of Vision and Guiding Principles Community Development Director JANUARY 2015 None FEBRUARY 2015 Employee Salaries/Benefits Funding Assistant to the City Manager October 23, 2014 Honorable Mayor and Members of Regular Meeting of The Hermosa Beach City Council October 28, 2014 E&B’S PROPOSED OIL DRILLING AND PRODUCTION PROJECT PART A Continued Public Hearing on placement of a measure on the March 3, 2015 ballot to present to the electorate for its consideration a Ballot Measure Ordinance proposing various legislative changes, a Development Agreement, and an oil and gas pipeline franchise and making CEQA findings in order to lift the ban on oil drilling and allow the Proposed E&B Oil Drilling & Production Project at the site of the current City Maintenance Yard at 555 Sixth Street, Hermosa Beach, CA, 90254 Recommendation: PART A: Hold a continued public hearing to consider placing a measure on the March 3, 2015 ballot to allow the Proposed E&B Oil Drilling & Production Project at the site of the current City Maintenance Yard at 555 Sixth Street, Hermosa Beach, CA, 90254. The continued public hearing also serves as an opportunity for the public to raise objections to the oil and gas pipeline franchise before being placed on the ballot. Should the Council elect to place the Project on the March 3, 2015 ballot, the Council should: (1) Adopt the following resolution attached this report: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA, CALLING AND GIVING NOTICE OF THE HOLDING OF A SPECIAL MUNICIPAL ELECTION ON TUESDAY, MARCH 3, 2015, FOR SUBMISSION OF AN ORDINANCE TO THE ELECTORATE RELATING TO A PROPOSED OIL AND GAS DRILLING AND PRODUCTION PROJECT PROPOSED BY E&B NATURAL RESOURCES MANAGEMENT CORPORATION FOR THE CITY MAINTENANCE YARD AT 555 SIXTH STREET; and (2) Proceed to Part B of this agenda item to consider four additional resolutions pertaining to submitting to the voters a measure on the proposed E&B oil drilling/production project at a Special Municipal Election on March 3, 2015 Should the Council determine that the item is not yet ready to be placed on the ballot, it is recommended that Council continue this hearing to its regular meeting of November 13, 2014 to allow additional time to address remaining open issues. Background: The staff report provided for the hearing on October 14, 2014 contains an extensive discussion of the project and the relevant election documents, which will not be repeated in this report. The October 14th staff report is attached to this report for reference. This report will address changes made to those documents since the Council’s October 14 meeting. The public hearing on this matter was opened at the City Council’s meeting on October 14, 2014 and continued to tonight’s meeting. In the intervening two weeks, the subcommittee met twice with representatives of E&B to negotiate remaining language and issues in dispute (a third meeting among only the lawyers was scheduled but cancelled at E&B’s request). Progress was made on some of the language during these meetings; other provisions remain in dispute. E&B intended to provide additional language for inclusion in the documents but as of the agenda deadline for this meeting that language had not been provided and hence, has not been considered and is not included. We anticipate that E&B will submit a letter with its proposed revisions, which will be distributed as a supplemental. Ballot Resolution: The ballot question contained in the ballot resolution has been revised to reflect Council’s direction at the October 14th City Council meeting. A revised resolution is attached to this report. Ballot Ordinance: The Ballot Ordinance has been revised as follows: 1. Section 12.D (summary of environmental impacts) has been revised as follows: a. In response to a question about the probability of a spill, and in order to make the relevant statistics more understandable, accurate and complete, the following information was added to Impact 5: Hydrology and Water Quality: i. The probability that there would be any sized spill along any point of the pipeline over the 35 year life of the Project would be reduced from 34% to 12%, after applying the mitigation measures described below. ii. This section is also amended to clarify that the probability of spill near the corner or Herondo Street and Valley Drive would be reduced from 0.40% to 0.087% over the Project life time after applying the mitigation measures described below. b. In response to a question about the impacts associated with a blowout, the following clarification was added to the first sentence (new language in underline) of Impact 9: Safety, Risk of Upset and Hazards: i. The potential for a blowout to result from drilling activities could produce off-site risks, including serious injuries and fatalities, if they encounter pressurized areas of the reservoir. 2. Section 12.E (Statement of Overriding Considerations) has been revised per Council direction to delete supplemental school funding and matching funds for undergrounding utilities from the list of project benefits. 3. Section 12.E (Statement of Overriding Considerations) has been revised to add the following benefits: a. Royalty payments due under Section 3 of the Lease (Benefit #3); b. Advances commencing with issuance of city drilling permit for first well (Benefit # 5); and c. Additional property tax revenue for the City, as identified in the CBA (Benefit #7). d. Pursuant to the terms of the Settlement Agreement, the City will be relieved of its obligation to pay E&B $17.5 Million (Benefit #8). 4. Section 12.E (Statement of Overriding Considerations) has been revised to clarify the value judgment that is reflected in approving the statement. Specifically the statement now provides that the much needed influx of revenue to the City from these listed benefits outweighs the remote risks of environmental impacts identified in the EIR. 5. Section 12.E (Statement of Overriding Considerations), Benefit #6 has been revised to increase the amount of the property value maintenance fund to $25 Million. Development Agreement: The Development Agreement is attached to this report in both a clean and a redlined version. The changes made to the agreement are based on the supplemental version of the Development Agreement provided just prior to the October 14th meeting. The attached redline reflects all language changes since the last meeting. All of the changes reflected in the document presented tonight have been agreed to by E&B and the City’s negotiating committee, except as described below. Remaining Areas of Disagreement These are the provisions where the City and E&B have yet to come to an agreement: Recital C -- this language has been changed to reflect a discussion on October 22 with E&B, but E&B has not commented on the revisions. The new language is acceptable to the subcommittee. Recital J and Section 2.1(third paragraph) – E&B has not accepted this change. Section 4.1.2, paragraph (c) – E&B was to propose revised language but has not done so. The language in the agreement is acceptable to the subcommittee. Section 5.1.3 -- E&B had tentatively agreed to the new language but has not confirmed. Section 5.1.4.2 – E&B does not agree to the deletion of the sentence regarding punitive and consequential damages. Section 6.16 – E&B was to propose some modifications to the insurance provision; those have not been provided. Language changes were made to reflect the discussion with E&B on October 22, but E&B has not commented on those changes. Section 6.26 – E&B was to propose some modifications to this provision; those have not been provided. Language changes were made to reflect the discussion with E&B on October 22, but E&B has not commented on those changes. Exhibit C – At the October 14 Council meeting, Councilmember Petty expressed continuing concerns about the language in Exhibit C concerning the advances and the minimum royalties, specifically that they be not restricted and be repaid from uplands royalties. She collaborated with Michael Mills to develop alternative language for those two sections, which has been incorporated into Exhibit C. E&B has not commented on those changes. In addition to these language issues, E&B continues to object to the removal from Exhibit C of its proposed supplemental school funding and matching funds benefits and the reference in the prefatory language to the dollar amounts of its royalty estimates. History of Negotiations The matrix below identifies all of the negotiation meetings between E&B and the Development Agreement Subcommittee to date. No. DATE TIME ATTENDEES LOCATION 1 5/6/14 9:00 a.m. E&B and Subcommittee – Initial Negotiations City Hall 2 5/14/14 3:00 p.m. E&B and Subcommittee City Hall 3 6/2/14 11:00 a.m. E&B and Subcommittee City Hall 4 8/21/14 3:00 p.m. E&B and Subcommittee City Hall 5 8/27/14 3:00 p.m. E&B and Subcommittee City Hall 6 9/9/14 3:00 p.m. E&B and Subcommittee City Hall 7 9/18/14 3:00 p.m. E&B and Subcommittee City Attorney’s Office 8 9/23/14 2:00 p.m. E&B and Subcommittee City Hall 9 9/24/14 9:00 a.m. Lawyers Meeting Conference Call 10 10/3/14 3:00 p.m. E&B and Subcommittee City Attorney’s Office 11 10/7/14 2:30 p.m. E&B and Subcommittee City Attorney’s Office 12 10/13/14 2:00 p.m. Nicki Carlsen, City’s Insurance Consultant, Diane Strickfaden, Tom Bakaly Conference Call 13 10/20/14 10:00 a.m. E&B and Subcommittee City Hall 14 10/21/14 2:30 p.m. Lawyers Meeting Note: Conference call canceled by E&B Conference Call 15 10/22/14 9:00 a.m. E&B and Subcommittee Note: No edits provided by E&B at meeting or by end of day City Attorney’s Office Page 1 of 3 14-xxxx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 RESOLUTION NO. 14-xxxx A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA, CALLING AND GIVING NOTICE OF THE HOLDING OF A SPECIAL MUNICIPAL ELECTION ON TUESDAY, MARCH 3, 2015, FOR SUBMISSION OF AN ORDINANCE TO THE ELECTORATE RELATING TO A PROPOSED OIL AND GAS DRILLING AND PRODUCTION PROJECT PROPOSED BY E&B NATURAL RESOURCES MANAGEMENT CORPORATION FOR THE CITY MAINTENANCE YARD AT 555 SIXTH STREET WHEREAS, the Settlement Agreement between the City and E&B Natural Resources Management Corporation (“E&B”) requires the City Council to submit to the voters at a special election the question whether to amend the Hermosa Beach Municipal Code to allow E&B’s oil and gas drilling and production project to proceed at the City maintenance yard located at 555 Sixth Street and to approve a development agreement that would afford E&B a vested right to proceed with its project. WHEREAS, the Agreement to Implement the Settlement Agreement entered into between the City and E&B on July 23, 2014 calls for the special election to take place on March 3, 2015. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That pursuant to the requirements of the laws of the State of California relating to general law cities, including but not limited to Elections Code Section 9222, there is called and ordered to be held in the City of Hermosa Beach, California, on Tuesday, March 3, 2015, a Special Municipal Election for the purpose of submitting to the voters the following ordinance: Shall E&B Corporation’s 34-well oil and gas drilling/production project at the City’s 555 Sixth Street maintenance yard be approved by 1) amending the General Plan and Municipal Code to exempt the project from the City’s oil drilling ban and repeal the restriction on City’s use of project royalties, 2) awarding a pipeline franchise to transport oil/gas underground, 3) approving a 34-year development agreement, and 4) determining that project financial benefits outweigh its unavoidable environmental impacts? YES NO Page 2 of 3 14-xxxx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 SECTION 2. That the proposed complete text of the Ordinance submitted to the voters is attached as Exhibit A. SECTION 3. That the vote requirement for the measure to pass is a majority (50% + 1) of the votes cast. SECTION 4. That the ballots to be used at the election shall be in form and content as required by law. SECTION 5. That the City Clerk is authorized, instructed and directed to procure and furnish any and all official ballots, notices, printed matter and all supplies, equipment and paraphernalia that may be necessary in order to properly and lawfully conduct the election. SECTION 6. That the polls shall be open at seven o’clock a.m. (7 a.m.) of the day of the election and shall remain open continuously from that time until eight o’clock p.m. (8 p.m.) of the same day when the polls shall be closed, pursuant to Election Code Section 10242, except as provided in Section 14401 of the Elections Code of the State of California. SECTION 7. That pursuant to Election Code Section 12310, a stipend for services for the persons named as precinct board members is fixed at the sum of $100 for each inspector and $80 for each clerk for the election. In addition, the sum of $25 will be given to each precinct board member to attend a training class and the sum of $50 will be given to each inspector to pick up the precinct supplies. The rental for each polling place, where a charge is made, shall be the sum of $25 for the election. When required, the compensation of the Custodian of a building shall be $30 for the election. SECTION 8. That in all particulars not recited in this resolution, the election shall be held and conducted as provided by law for holding municipal elections. SECTION 9. That notice of the time and place of holding the election is given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in time, form and manner as required by law. SECTION 10. That the City Council authorizes the City Clerk to administer said election and all reasonable and actual election expenses shall be paid by the City upon presentation of a properly submitted bill, of which up to $50,000 shall be reimbursed by E&B to the City pursuant to the Settlement Agreement. Page 3 of 3 14-xxxx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 SECTION 11. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions, and shall make minutes of the passage and adoption thereof in the records of the proceedings of the City Council at which the same is passed and adopted. PASSED, APPROVED and ADOPTED this 14th day of October, 2014. ______________________________________________________________________________________________ PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, California ATTEST: APPROVED AS TO FORM: City Clerk City Attorney 1 AN ORDINANCE OF THE CITY OF HERMOSA BEACH AMENDING THE HERMOSA BEACH COASTAL LAND USE PLAN (PART OF THE CITY’S GENERAL PLAN) AND MUNICIPAL CODE TO ALLOW AN OIL AND GAS DRILLING AND PRODUCTION PROJECT AT 555 SIXTH STREET (CITY MAINTENANCE YARD) AND REPEALNG A RESTRICTION ON THE USE OF PROJECT ROYALTIES, AMENDING THE OIL PRODUCTION CODE, AWARDING A PIPELINE FRANCHISE FOR OIL AND GAS, AND APPROVING A DEVELOPMENT AGREEMENT WITH E&B NATURAL RESOURCES MANAGEMENT CORPORATION AND MAKING CEQA FINDINGS The People of the City of Hermosa Beach hereby ordain as follows: Section 1. The People of the City of Hermosa Beach do hereby find as follows: A. The purpose of this Ordinance is to modify City law in order to allow an oil and gas drilling and production project with 30 production wells, 4 water injection wells, liquid and gas separating equipment, and a gas processing unit (“Project”) to be developed by E&B Natural Resources Management Corporation (“E&B”) on City-owned land located at 555 Sixth Street (the City maintenance yard) in accordance with Oil and Gas Lease No. 2 (the “lease”) entered into in January, 1992 between the City and Macpherson Oil Company (“Macpherson”), E&B’s predecessor-in-interest. B. This Ordinance proposes to: 1) amend the Hermosa Beach Coastal Land Use Plan (part of the City’s General Plan) to change the land use designation for the City Maintenance Yard and to adopt energy policies consistent with E&B’s Project; 2) amend various provisions of the City’s Municipal Code to allow E&B’s Project to proceed, but continue to prohibit oil drilling elsewhere in the City, and to remove the restriction on the City’s use of Project royalties; 3) approve a Development Agreement between the City and E&B in order to provide E&B with a statutory vested right to proceed with its Project and to set forth all conditions of approval and mitigation measures that will govern the Project; 4) approve an oil pipeline franchise allowing E&B to construct and operate subterranean pipes for the transmission of oil and gas from the drill site to a location outside the City; and 5) adopt a legally-required statement that the Project is the most desirable, feasible alternative and that its benefits outweigh its significant unavoidable impacts. 2 Section 2. The matrix set forth in Section 17.28.020 of Title 17, Chapter 17.28 of the Hermosa Beach Municipal Code is amended by adding the following new category in alphabetical order: Oil and gas production and processing P 17.42.140 Section 3. Section 17.28.030(D) of Title 17, Chapter 17.28 of the Hermosa Beach Municipal Code is amended to read as follows: D. Building Height. Any building may have a maximum of thirty-five (35) feet in height and have a maximum of two stories. Oil and gas operations may exceed this height for a temporary period of time to a height as set forth in an approved Development Agreement. Section 4. A new section 17.42.140 is added to Title 17, Chapter 17.42 of the Hermosa Beach Municipal Code to read as follows: 17.42.140 Oil and Gas Production and Processing. Oil production and processing is permitted on City-owned property located at 555 Sixth Street in the M-1 Zone subject to approval of a Development Agreement. No precise development plan is required. Section 5. Section 5.56.010 of Title 5, Chapter 5.56 of the Hermosa Beach Municipal Code is amended to read as follows: 5.56.010 Oil Drilling. Except as provided in Sections 17.28.020 and 17.42.140, the drilling, boring or otherwise sinking of an oil or gas well, or oil or gas wells, or the maintenance, pumping or operation of any oil well or oil wells or gas well or gas wells in the City is declared to be a nuisance and is declared to be unlawful. Except as provided in Sections 17.28.020 and 17.42.140, it is unlawful for any person to drill, bore or otherwise sink or maintain, pump or operate or cause to be drilled, bored or otherwise sunk, or maintained, pumped or operated, or to aid in the drilling, boring or otherwise sinking, or maintaining, pumping or operating of any gas or oil well or wells for the purpose of procuring oil, gas or other hydrocarbon substances within any portion of the City. Except as provided in Sections 17.28.020 and 17.42.140, it is unlawful for any person to commence the construction or to construct or maintain any derrick, or any oil well apparatus in the City for the purpose of drilling for or maintaining any oil or gas well in the City. Section 6. Section 5.56.020 of Title 5, Chapter 5.56 of the Hermosa Beach Municipal Code is hereby repealed. 3 Section 7. The Hermosa Beach Coastal Land Use Plan, part of the City’s General Plan, is amended to add a new chapter entitled Coastal Industrial (Oil and Gas) Development as set forth in Attachment A to this ordinance and incorporated herein by reference. In the event that the Coastal Commission proposes modifications to the amendment, such modifications will be incorporated into the Hermosa Beach Coastal Land Use Plan without a further vote of the electorate provided they are consistent with the Lease and the Settlement Agreement entered into by and between the City, Macpherson, and E&B dated March 2, 2012. Section 8. Title 21 Oil Production Code of the Hermosa Beach Municipal Code is amended as follows: A. Sec. 21A-1.20 Definition of “Grade” is amended to read as follows: “Grade” (adjacent ground elevation) means the lowest point of elevation of the finished surface level of the ground, paving or sidewalk, excluding excavations for well cellars and storage tanks within the enclosed area of the privacy wall and for the privacy wall described in Section 21A-2.9(C). For the purpose of determining the height of privacy walls and other structures for oil projects, this definition supersedes the definition of grade in Chapter 17.04 and Section 17.46.130 of Title 17 of the Municipal Code. B. Sec. 21A-2.10(E) Process Operations is amended to read as follows: E. Process Operations. No process operations shall be permitted at any well site excluding oil and gas processing and treatment activities involving the chemical separation of oil and gas constituents and the removal of impurities. Processing activities would include oil stripping; hydrogen sulfide and carbon dioxide removal systems; depropanizers, debutinizers, or other types of fractionation; sulfur recovery; wastewater treatment; and separation and dehydration of oil/gas/water. Section 9. The Hermosa Beach Coastal Land Use Plan - Land Use Map (Appendix J), part of the City’s General Plan, is amended to modify the designation for the project site at 555 6th Street in Hermosa Beach from Open Space to Industrial (IND), as set forth in Attachment B to this Ordinance. In the event that the Coastal Commission proposes modifications to the amendment, such modifications will be incorporated into the Coastal Land Use Plan without further vote of the electorate provided they are consistent with the Lease and Settlement Agreement entered into by and between the City, Macpherson, and E&B dated March 2, 2012. 4 Section 10. An oil and gas pipeline franchise is hereby granted to E&B Natural Resources Management Corporation for placement of pipelines to serve its oil production facility at 555 6th Street as set forth and described in the Project Description contained in Exhibit B to the Development Agreement. The location of the pipelines approved by this franchise shall be as described in the map attached hereto as Attachment C to this ordinance and incorporated herein by reference (limited to the portion of the pipeline shown within the territorial boundaries of the City of Hermosa Beach), specifically for the placement of oil and gas pipelines constructed underground in the right of way of Southbound Valley Drive to the City of Hermosa Beach border with Redondo Beach at Herondo Street. Construction of the pipeline authorized by this franchise shall be preceded by approval by the City, which approval shall not be unreasonably denied, of a ministerial encroachment permit setting forth appropriate conditions as required by the Municipal Code and implementing the mitigation measures set forth in the Final Environmental Impact Report (“EIR”) and conditions incorporated in the Development Agreement. The term of this franchise shall be co-terminus with the term of the lease. Beginning at such time as the oil and gas pipelines are installed and become operational (i.e. are transporting oil and/or gas) and as consideration for the franchise, E&B Natural Resources Management Corporation shall pay to the City of Hermosa Beach an annual franchise fee. The annual fee shall be due until such time as the pipelines are abandoned in accordance with the Development Agreement and no longer operational. The base annual fee shall be paid within 30 days after the end of each calendar year including the year that one or both pipelines become operational and a penalty at the rate of two percent (2%) per month or fraction thereof beyond the payment date shall be charged, but in no event shall said penalty exceed fifty percent (50%). The City may also withhold permits or any pending authorization to proceed with phases of the project if any payment is delinquent. All such payments shall be made payable to the City, and shall be supported by the Grantee’s verified statement concerning the computation thereof. The payments due to the City shall be computed as follows: The length of the pipe expressed in feet located within the City’s territorial boundaries, rounded to the nearest foot shall be multiplied by the applicable base rate, as adjusted below, in accordance with the following schedule: Pipelines with an Internal Diameter of: Base Rate Per Lineal Foot 0-4 inches .590 4-6 inches .895 6-8 inches 1.197 The applicable base rate shall be adjusted annually by any increase in the CPI for the preceding 12 months. The term "CPI" as used herein shall mean the Consumer Price 5 Index All Urban Consumers (all items less food and energy; base year 1982-84 = 100) for the Los Angeles-Riverside-Orange County area published by the United States Department of Labor, Bureau of Labor Statistics. The work of laying, constructing, maintaining, operating, renewing, repairing, changing and moving any of the pipeline system contemplated by this franchise and all other work in exercise of this franchise shall be performed in compliance with all applicable provisions of the City’s Municipal Code pertaining to street excavations and restoration, including but not limited to the City’s encroachments ordinance, and other applicable laws (in accordance with the Development Agreement) and shall be conducted with the least possible hindrance or interference to the use of City roads by the public or by the City Hermosa Beach, and E&B shall provide all necessary warning, safety and traffic control devices as are or may be required by City, County, State or Federal regulations. All excavations shall be back filled and adequately compacted. The surface of City roads shall be placed in a condition that is as good and as serviceable as existed at the beginning of this work and must be to the satisfaction of the City Engineer. Section 11. An application for a Development Agreement was filed in accordance with Hermosa Beach Municipal Code Chapter 17.64 and California Government Code section 65864 et seq. on November 14, 2012 by E&B Natural Resources Management Corporation to develop an oil production and processing project on a City-owned parcel located at 555 Sixth Street pursuant to the lease, City Council Resolution No. 93-5632 (Conditional Use Permit) and the Settlement Agreement entered into by and between the City, Macpherson and E & B dated March 2, 2012. The application was deemed complete on April 18, 2013. A. A public hearing was duly noticed for consideration by the Planning Commission meeting on June 23, 2014. At that meeting the Commission reviewed the staff report, considered all the pertinent testimony, and adopted a resolution (No. 14-9) making its recommendations to the City Council. B. A duly noticed public hearing was conducted by the City Council on______, 2014 at which the Council considered all pertinent testimony and adopted Resolution No. _____ incorporating the Development Agreement into this ordinance to be considered by the electorate. C. The People of the City of Hermosa Beach hereby find and declare: 1. With approval of the Coastal Land Use Plan amendments and zoning ordinance and other Municipal Code text amendments proposed in this ordinance, the Development Agreement is consistent with all applicable provisions of the General Plan and the Municipal Code. 6 2. The Development Agreement contains all the mandatory provisions required and permissive content allowed by Government Code Section §65865.2. D. Based on the above findings, the People of the City of Hermosa Beach hereby approve the Development Agreement, which is attached hereto as Attachment D to this ordinance and incorporated herein by reference. E. The City Manager is authorized to execute the Development Agreement and fill in the blanks in the introductory sections and in the signature blocks. F. In the event that the Coastal Commission proposes any modifications to the Development Agreement pursuant to Government Code section 65869, such modifications will be automatically incorporated into the Development Agreement without a further vote of the electorate provided they are consistent with the Lease and the Settlement Agreement entered into by and between the City, Macpherson and E&B dated March 2, 2012. G. The Development Agreement may be amended by mutual agreement of City and E&B as provided for in the terms of the Development Agreement and without further vote of the electorate provided the amendment is not inconsistent with or as may be necessary to implement the Project. Section 12. Pursuant to the requirements of the California Environmental Quality Act (“CEQA”), Public Resources Code section 21000 et seq. and the Guidelines promulgated thereto in 14 Cal. Code Regs section 15000 et seq., the People find as follows: A. As contemplated in the Settlement Agreement entered into by and between the City, Macpherson, and E&B dated March 2, 2012, the City caused to be prepared an EIR evaluating the environmental impacts of the discretionary approvals approved by this ordinance. The City Council reviewed and considered the Final EIR and certified on July 8, 2014 that the Final EIR was prepared in accordance with the requirements of CEQA, reflects the independent judgment of the City Council, and constitutes an accurate and complete statement of the environmental impacts of the proposed project. B. The record for the Project demonstrates that the Applicant incorporated design features and operational practices into the Project that implement the modern technology and operational advancements related to air quality, odors, noise, 7 hazards, and water quality to reduce the potential impacts on the adjacent community and the environment. C. The record for the Project demonstrates that changes or alterations have been required in the Project that, to the extent feasible, substantially lessen some of the significant environmental effects identified in the Final EIR. The Final EIR recommends imposition of various mitigation measures to mitigate the significant adverse environmental impacts expected to be caused by the Project. Those mitigation measures have been incorporated into the Project entitlements in the Development Agreement and are implemented by way of a Mitigation Monitoring and Reporting Program set forth in Exhibit D-3 to the Development Agreement. D. The EIR identifies significant adverse environmental impacts that cannot be mitigated to a level of insignificance, significant impacts that can be mitigated to a level of insignificance, and impacts that would be less than significant. Those impacts are summarized below: Impacts 1 &2: Aesthetics and Visual Resources An 87-foot electric drill rig with three-sided acoustical shield would be installed at the Project Site at the beginning of Phase 2 for about 4 months, then during Phase 4 for 30 months, then periodically thereafter for re-drills for up to an maximum average of 30 days per year or a maximum of 150 days once every 5 years. The rig would introduce, primarily into the foreground and middleground environments, a visually dominant vertical feature which is distinct in form, mass, height, material and character from structures in the viewshed of locations which are considered to have high sensitivity. The effects of light, shade and shadow would produce contrasting geometric vertical planes and would project into a typically uniform (or otherwise naturally varied) sky backdrop. Night views of the open (illuminated) side of the drill rig, with the pattern and scale of this illuminated feature, would be out of character with existing nighttime views. Similar to day time impacts, this vertical feature would project above the horizontal plane of the existing illuminated environment and would become a focal element. The duration of exposure, number of sensitive viewers, and nature of the visual change would result in impacts that would be significant. During periods of Phase 4, a 110-foot workover rig could be present on site for up to 90 days per year. The open truss structure of the workover drill rig introduces a focal element of industrial character into viewsheds of primarily residential and light industrial character. The workover rig would not operate at night (after 6 pm). 8 The mitigation measures provided in the Final EIR reduce these impacts to the extent feasible. However, these impacts (with the drill rig or workover rig on the Project Site) have the potential to remain significant adverse impacts after mitigation. The Mitigation measures include: the selection of colors and materials for the drill rig acoustical cover that are of a neutral sky color and fully opaque; the installation of a permanent 35-foot wall at the end of Phase 3 to provide for the stability of views and opportunities for positive visual elements (i.e., articulations of the façade) for the duration of Phase 4; landscape plantings installed at the end of Phase 3 that respond to the design of the walls; and the selection of colors and finishes and lighting to minimize glare and reflectivity. The impacts when the drill rig or workover rig are not present on the project site would be less than significant with mitigation. Impact 3: Air Quality and Odors Due to the close proximity of the Project site to neighbors, businesses and the public (within 100 feet of businesses, 160 feet of residences, 55 feet of the Greenbelt and 20 feet of the public sidewalks), certain scenarios could cause odors offsite. These could include various maintenance activities such as line, tank or vessel openings; workovers removing well hole equipment (pumps or tubing), thereby exposing the well equipment to the atmosphere; minor accident scenarios; and drilling activities including muds handling that could cause short-duration, intermittent odors, or pump leaks. Because odor thresholds for certain compounds found in the oil and gas industry are very low, in the parts per billion range, release of these compounds can cause odor impacts off-site. Therefore, due to the close proximity of neighbors, odor impacts could impact surrounding areas and would be a significant impact. The Mitigation measures provided in the Final EIR reduce the potential impacts related to odors to the extent feasible. However, the impacts related to odors have the potential to remain significant adverse impacts after mitigation. The mitigation measures proposed that would reduce the frequency of odor events include: the implementation of systems that direct odor-causing releases to flare-type systems; the implementation of a compressor seal vent collection system; implementation of an Odor Minimization Plan and an Air Monitoring Plan that include buffer areas, signage, monitoring, and alarms when certain levels of H2S and hydrocarbons are reached as well as notification protocol and remedies if releases occur; the use of an odor suppressant system; and increased vigilance associated with South Coast Air Quality Management District (SCAQMD) Rule 1173 (related to controlling "leaker" components) to further reduce emissions from fugitive components that could cause odors. The air quality impacts related to construction and long-term operational 9 emissions, health risk, and greenhouse gas (GHG) emissions would be less than significant with mitigation. Impact 4: Biological Resources Oil spills and ruptures from the installed off-site oil pipelines could result due to geologic hazards, mechanical failure, structural failure, corrosion, or human error during operations. During a storm event, a spill of crude oil from the pipeline near the corner of Herondo Street and Valley Drive could be directed into the storm drain system, which from that point drains about 1,500 feet through storm drain piping onto the beach, near the high tide line. The amount of oil that would enter the ocean would depend on how much sand was on the beach at that particular time. This would have the potential to result in impacts to the numerous sensitive habitats and species present in the Pacific Ocean. Oil spills and cleanup activities could potentially result in impacts to biological resources. Direct impacts on wildlife from oil spills include physical contact with the oil, ingestion of oil, and loss of food and critical nesting and foraging habitats. The mitigation measures provided in the Final EIR reduce the potential impacts to biological resources to the extent feasible. However, these impacts have the potential to remain significant adverse impacts after mitigation. The mitigation measures include development of an Emergency Response Plan in compliance with the California State Oil Spill Contingency Pan. The plan shall include provisions for containment and cleanup measures and responsibilities. In addition, the Final EIR provides for mitigation measures for potential impacts to Hydrology and Water Quality discussed below, including implementing infrastructure preventative maintenance, conducting structural integrity tests, and routine inspections, would reduce the likelihood and severity of potential oil spills and exposure impacts to sensitive biological resources; but, impacts would remain significant and unavoidable. The fully enclosed drain systems proposed by E&B for the Project site would retain any spills on-site. Therefore, potential spills at the Project Site would not result in a significant impact to biological resources. Impact 5: Hydrology and Water Quality As described for Biological Resources above and in the Final EIR, during a storm event, a release from the off-site pipeline near the corner of Herondo Street and Valley Drive could produce a worst-case oil spill of 16,000 gallons that could drain directly into subsurface soils and/or to the ocean through storm drains. The probability for this impact to occur during a 0.50 inch rain event near the corner of Herondo Street and Valley Drive would be reduced from 0.40% to 0.087% over the Project life time after applying the mitigation measures described below. The probability that there would be any sized spill along any point of the pipeline, over the 35 year life of the Project would be 10 reduced from 34% to 12%, after applying the mitigation measures described below. The mitigation measures provided in the Final EIR related to Biological Resources and Hydrology and Water Quality would reduce the potential impact to water quality to the extent feasible. However, this impact to water quality has the potential to remain a significant adverse impact after mitigation. The mitigation measures, in addition to the measures listed above for Biological Resources, include implementing infrastructure preventative maintenance (i.e., smart-pigging) and routine visual inspections, the installation of a leak detection system and check valve into the crude oil pipeline at Herondo Street, the installation of an oil separator in storm drain systems of Herondo Street, and the use of pipeline design measures , which include the use of impact resistant coating, the installation of a slurry above the pipe to the base of the pavement or ground surface, and the laying of strips of warning tape over the top of the pipeline to prevent third-party damage. These mitigation measures would reduce the frequency or severity of an oil spill reaching the ocean; but, impacts would remain significant and unavoidable. Impact 6: Land Use The drilling, construction, and potential future operations would be in close proximity to land uses zoned as open space (parks, baseball fields and the Greenbelt) and residential. Project activities during all phases may generate significant noise, odor, and visual impacts that have the potential to be incompatible with these adjacent land uses. The mitigation measures provided for Noise and Vibration below would reduce the potential noise impacts during the concurrent drilling and production, as well as production only, in Phases 2 and 4 to a less than significant level. The mitigation measures in the Final EIR provided above for odors and aesthetics and below for noise during demolition and construction would reduce the land use compatibility impacts to the extent feasible. However, the land use impacts have the potential to remain significant adverse impacts after mitigation. Impact 7: Noise and Vibration The predicted noise impact during demolition and construction activities in Phase 1 and 3 of the Project has the potential to be significant at the homes to the northwest and west of the Project Site where Project-related noise could result in an increase in daytime noise levels over existing noise levels. The mitigation measures provided in the Final EIR reduce the potential noise impacts to the extent feasible. However, these impacts during demolition and construction have the potential to remain significant adverse impacts after 11 mitigation. The mitigation measures include the provision of 24-foot high noise barriers along the project perimeter and gates at the access points to the project site with all acoustical barriers required to meet the specified performance standards. Predicted noise impacts during the concurrent drilling and production in Phase 2 and Phase 4 drilling stages and during Phase 4 re-drills would be reduced to less than significant with mitigation. Noise levels when drilling is not occurring during Phase 4 would be less than significant. During re-drills, noise levels would be the same as those during drilling and, therefore, less than significant after mitigation. Predicted noise levels due to increases in traffic would be less than significant. Predicted vibration impacts would be less than significant after mitigation. Impact 8: Recreation As discussed for Biological Resources and Hydrology and Water Quality above, during a rain event, a potential oil spill from the oil pipeline near the corner of Valley Drive and Herondo Street could drain directly into the storm drains and flow to the ocean. An oil spill along the coastline could affect beach areas, leading to beach closures and boating restrictions in contaminated areas during and potentially after cleanup. Public perception of the recreational quality of the areas beaches (Hermosa, Manhattan, Redondo, etc.) could also be affected, causing a reduction in beach recreational activities for a substantial period of time. The mitigation measures provided for Biological Resources and Hydrology and Water Quality would reduce the frequency and severity of an oil spill reaching the ocean to the extent feasible. However, the impacts have the potential to remain significant adverse impacts after mitigation. Impact 9: Safety, Risk of Upset, and Hazards The potential for a blowout to result from drilling activities could produce off- site risks, including serious injuries and fatalities, if they encounter pressurized areas of the reservoir. Although it is not known at this time which reservoir areas, if any, are pressurized to the extent that pressures could produce a blowout, historical data from drilling in Redondo Beach indicates that such potential does exist. Pressurization once the wells are placed into production (after drilling) would last for only a short period of time (estimated at 30 days based on the Redondo Beach wells), but could still result in a blowout during drilling. E&B indicated in the Planning Application that wells would be pressurized for a short period after drilling. The mitigation measures provided in the Final EIR reduce the potential impacts related to a well blowout during drilling to the extent feasible. 12 However, these impacts during drilling have the potential to remain significant adverse impacts after mitigation. E&B proposed design features, including the use of an off-shore equivalent-style blow out preventer equipment (BOPE), venting to a flare, and non-cascading shutdown systems that would be incorporated into the design of the Project to address this potential impact. In addition, the mitigation measures provided in the Final EIR would include: preparation of an independent third-party audit with all audit items implemented immediately and the audit updated annually; and the design of crude oil spill containment areas as Class Division I areas according to NFPA and NEC or the isolation of spark producing equipment from the containment area. The potential for risks from a pipeline rupture would be less than significant with mitigation. The potential for impacts from risks associated with spark- producing equipment resulting in the chances of igniting a crude oil spill would be reduced to less than significant with mitigation. In addition, the potential for risks during operations without drilling would be a less than significant impact. E. As to the significant adverse environmental impacts that cannot be mitigated to a level of insignificance, the People hereby adopt the following findings and statement of overriding considerations: The EIR examined alternatives to the proposed Project. Although the No Project/No Development Alternative is considered environmentally superior, the alternative does not achieve any of the project objectives. Of the other alternatives considered, the next best alternative is the AES Site, which reduces the greatest number of the Project’s significant and unavoidable impacts to less than significant with mitigation. Nevertheless, use of the AES site also does not meet most of the project objectives to the extent the objectives are tailored for the City Yard site and the 1993 Conditional Use Permit for that site and the March 2012 Settlement Agreement. The use of the AES site also has a number of potential legal and land use issues, related to Redondo Beach Charter Article 27 and would most likely require a vote of the people of Redondo Beach and a re-zoning. These issues are similar to those presented by the Proposed Project. The EIR recognizes that while both the Proposed Project and the AES Site Alternative have similar challenges, E&B has no control over the AES site. Due to these considerations, it cannot be considered a feasible alternative. After examining the alternatives, adoption and implementation of the Proposed Project is the most desirable, feasible, and appropriate action. The development agreement includes all feasible mitigation measures as part of the Mitigation Monitoring and Reporting Program and significant 13 conditions of approval for the Project in Exhibit D to the Development Agreement. Even with implementation of those mitigation measures, the Final EIR and the record of proceedings for the Project identify potentially significant and unavoidable environmental impacts from the Project in the areas of Aesthetics and Visual Resources (with drill rig and workover rig on- site), Air Quality (odors), Biological Resources (from potential off-site oil pipeline rupture), Hydrology and Water Quality (water quality from potential off-site oil pipeline rupture), Land Use, Noise (construction and demolition), Recreation (from potential off-site pipeline rupture), and Safety, Risk of Upset and Hazards (from potential well blowout during drilling). The proposed project would provide public benefits, pursuant to the commitments in the Lease and the Development Agreement, as described below. 1. E & B will pay the entire cost of soils remediation at the maintenance yard should the oil ban be lifted and the Project move forward to Phase 3 – full production. If the ban is lifted and the Project does not go forward past Phase 2, E & B will clean up the site to be used for industrial and commercial purposes; 2. If the oil ban is lifted and E&B decides to proceed with Phase 3 of the Project, E&B will advance $6,500,000 to the City for the permanent relocation of the City Maintenance Yard. E & B has further agreed to forgive the City’s $3.5 million obligation if the Project does not go to Phase 3. These funds could be used for projects at the discretion of the City such as a temporary or permanent relocation of the City Maintenance Yard; 3. E&B will pay royalties to the City, as set forth in Section 3 of the Lease. E&B and the City’s independent consultant through its Cost Benefit Analysis prepared separate royalty payment estimates for the project; 4. In addition to the minimum royalty payments required under the Lease, E & B has agreed to provide an additional unrestricted contribution to the City in the amount of $500,000; 5. E&B will pay to the City, as an advance, One Million Dollars ($1,000,000) per year, starting on the date of the issuance by the City of the drilling permit for the first well and continuing on the anniversary of that date until the Minimum Royalty payment in the Lease commences (“Drilling Permit Advance” or collectively, “Drilling Permit Advances”). (For clarity, this period is estimated to continue for approximately five years, for a total of Five Million Dollars ($5,000,000).) The Drilling Permit Advances are not restricted and may be used in accordance with applicable City laws; 14 6. E & B will create and fund an account that would stabilize proven impacts to property values for 5 years (during drilling) for properties in close proximity to the Project. The program will be available to properties within 600 feet of the Project and the fund will have a minimum balance of $1 Million, with payments on claims capped at $25 Million. E&B will place another $4 million in the fund over time. Any funds left over in the fund will be distributed to properties within 300 feet of the project; 7. The City will receive additional property tax revenue levied on the value of the oil reservoir, as identified in the Cost Benefit Analysis; and 8. Pursuant to the terms of the Settlement Agreement, the City will be relieved of its obligation to pay E&B $17.5 Million. After balancing these specific economic, legal, social, technological, and other benefits of the proposed project, the voters of the City of Hermosa Beach have hereby determined that the nine significant and unavoidable adverse environmental impacts identified may be considered acceptable in light of the benefits listed above which offset these unavoidable, adverse environmental impacts that will be caused by the Project. Specifically, the much needed influx of revenue to the City from these listed benefits outweighs the remote risks of environmental impacts identified in the EIR. Having adopted all feasible mitigation measures and recognized all unavoidable significant impacts, each of the separate benefits of the proposed project, as stated herein, is hereby determined to be unto itself an overriding consideration, independent of other benefits, that warrants approval of the proposed Project and outweighs and overrides its unavoidable significant effects, and thereby justifies the approval of the E&B Oil Project. Based on the foregoing findings and the information contained in the record, it is hereby determined that: a. All significant Cultural Resources, Energy, Environmental Justice, Fire Protection and Emergency Response, Geology and Soils, Noise impacts during drilling and production, Public Services, Transportation/Traffic, and Water Resources effects on the environment due to approval of the Project have been eliminated or substantially lessened where feasible; and b. Any remaining significant Aesthetic and Visual Resources (with drill rig and workover rig on-site), Air Quality (odors), Biological Resources (from potential off-site oil pipeline rupture), Hydrology and Water Quality (water quality from potential off-site oil pipeline rupture), Land Use, Noise 15 (construction and demolition), Recreation, and Safety, Risk of Upset, and Hazards (from potential well blowout during drilling) effects on the environment found to be unavoidable are acceptable due to the factors described above. Thus on balance, the economic and other benefits accruing to the City and the community from the Project outweigh the risk of potential impacts to the community. Section 13. If any provision of this ordinance, or the application of any such provision to any person or circumstances, shall be held invalid, the remainder of this ordinance to the extent it can be given effect, or the application of those provisions to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby, and to this end the provisions of this ordinance are severable. The people hereby declare that they would have adopted each section, subsection, sentence, clause, phrase, or portion of this Ordinance, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions of this Ordinance be declared invalid or unenforceable. Section 14. This Ordinance shall be considered adopted immediately upon the date that this Ordinance is confirmed and approved by the voters of Hermosa Beach at the Special Municipal Election of March 3, 2015 and shall become effective on March 13, 2015. Section 15. The City Manager is hereby directed to submit to the California Coastal Commission the amendment to the Hermosa Beach Coastal Land Use Plan, part of the City’s General Plan, and the Development Agreement adopted herein. PASSED, APPROVED AND ADOPTED by the People of the City of Hermosa Beach at a special municipal election on March3, 2015. 16 BALLOT ORDINANCE ATTACHMENT A Amendment to the City of Hermosa Beach Coastal Land Use Plan Amend the Coastal Land Use Plan by adding a new section titled “Coastal Industrial (Oil and Gas) Development” as follows: COASTAL INDUSTRIAL (OIL AND GAS) DEVELOPMENT A. Statement of Philosophy The City of Hermosa Beach recognizes that while emphasizing protection, enhancement, and restoration of coastal resources is critical to the achievement of community goals, certain types of industrial and energy developments, such as oil and gas, may be appropriate in the coastal zone when consistent with the Coastal Act and policies established by this plan, as well as relevant initiatives passed by the voters of the City of Hermosa Beach. In November 1995, the Hermosa Beach electorate passed Proposition E, an initiative that re-established a citywide ban on any oil or gas well or wells for the purpose of procuring oil, gas or other hydrocarbon substances. On __________, Measure ___ adopting Ordinance ________ was passed by the electorate allowing an Oil and Gas Development Project proposed by E&B Natural Resources Management Corporation on a 1.3 acre City-owned property at 555 6th Street in Hermosa Beach. The ban on oil and gas development otherwise remains in effect within the City. Until the City has a certified Local Coastal Program, the legal standard of review for consideration of a coastal development permit by the Coastal Commission is whether a proposed project is consistent with the Chapter 3 policies of the Coastal Act, will not prejudice the City’s ability to prepare a Local Coastal Program, and is consistent with the requirements of the California Environmental Quality Act. B. Coastal Act Policies Coastal-Dependent and Coastal-Related Development Criteria 17 The Coastal Act policies which guide industrial development distinguish between coastal-dependent development, coastal-related development, and other types of industrial developments. According to Section 30101 and 30101.3 of the Act: 30101. “Coastal-dependent development or use” means any development or use which requires a site on, or adjacent to, the sea to be able to function at all. 30101.3 “Coastal-related development” means any use that is dependent on a coastal-dependent development or use. The exploration, development and production of oil and gas reserves located offshore may qualify as a coastal-dependent development. However, not all activities or facilities associated with such developments are necessarily coastal- dependent uses. Processing and storage facilities that support development of offshore oil and gas reserves may not require a site on or adjacent to the sea or within the coastal zone within the meaning of Section 30101. Such facilities may therefore be considered coastal-related developments. Whether or not exploration, development and production of offshore or onshore oil and gas and its associated facilities is appropriate in the coastal zone is a determination to be made on a case-by-case basis. Under Section 30255 of the Act, coastal-dependent developments or uses, whether industrial or not, are given priority over other development on or near the shoreline: Coastal-dependent developments shall have priority over other developments on or near the shoreline. Except as provided elsewhere in this division, coastal-dependent developments shall not be sited in a wetland. When appropriate, coastal-related developments should be accommodated within reasonable proximity to the coastal-dependent uses they support. In addition, Section 30260 of the Act establishes special criteria for allowing coastal-dependent industrial facilities: Coastal-dependent industrial facilities shall be encouraged to locate or expand within existing sites and shall be permitted reasonable long-term growth where consistent with this division. However, where new or expanded coastal-dependent industrial facilities cannot feasibly be accommodated consistent with other policies of this division, they may nonetheless be permitted in accordance with this section and Sections 30261 and 30262 if (1) alternative locations are infeasible or more environmentally damaging; (2) to do otherwise would adversely affect the public welfare; and (3) adverse environmental effects are mitigated to the maximum extent feasible. 18 This section anticipates that coastal-dependent industrial and energy development may not be consistent with the Chapter 3 policies of the Coastal Act, yet it may be necessary for the public welfare. Accordingly, Section 30260 allows the permitting of coastal-dependent oil and gas development that is not consistent with the Chapter 3 policies, provided that the proposed development complies with provisions of the Coastal Act in Sections 30261 and 30262. Specific sections of the Coastal Act that address energy (oil and gas) development are: Coastal Act, Section 30250(a) and (b) state in part: (a) New residential, commercial, or industrial development, except as otherwise provided in this division, shall be located within, contiguous with, or in close proximity to, existing developed areas able to accommodate it or, where such areas are not able to accommodate it, in other areas with adequate public services and where it will not have significant adverse effects, either individually or cumulatively, on coastal resources. In addition, land divisions, other than leases for agricultural uses, outside existing developed areas shall be permitted only where 50 percent of the usable parcels in the area have been developed and the created parcels would be no smaller than the average size of surrounding parcels. (b) Where feasible, new hazardous industrial development shall be located away from existing developed areas. Section 30108 (definitions) defines feasible: "Feasible" means capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic, environmental, social, and technological factors. Section 30262 excluding parts (a)(3) and (a)(4) provides guidance for oil and gas development: (a) Oil and gas development shall be permitted in accordance with Section 30260, if the following conditions are met: (1) The development is performed safely and consistent with the geologic conditions of the well site. (2) New or expanded facilities related to that development are consolidated, to the maximum extent feasible and legally permissible, unless consolidation will have adverse environmental consequences and will not significantly reduce the number of producing wells, support facilities, or sites required to produce the reservoir economically and with minimal environmental impacts. 19 (5) The development will not cause or contribute to subsidence hazards unless it is determined that adequate measures will be undertaken to prevent damage from such subsidence. (6) With respect to new facilities, all oilfield brines are reinjected into oil- producing zones unless the Division of Oil and Gas, Geothermal Resources of the Department of Conservation determines to do so would adversely affect production of the reservoirs and unless injection into other subsurface zones will reduce environmental risks. Exceptions to reinjections will be granted consistent with the Ocean Waters Discharge Plan of the State Water Resources Control Board and where adequate provision is made for the elimination of petroleum odors and water quality problems. (7)(A) All oil produced offshore California shall be transported onshore by pipeline only. The pipelines used to transport this oil shall utilize the best achievable technology to ensure maximum protection of public health and safety and of the integrity and productivity of terrestrial and marine ecosystems. (B) Once oil produced offshore California is onshore, it shall be transported to processing and refining facilities by pipeline. (C) The following guidelines shall be used when applying subparagraphs (A) and (B): (i) "Best achievable technology," means the technology that provides the greatest degree of protection taking into consideration both of the following: (I) Processes that are being developed, or could feasibly be developed, anywhere in the world, given overall reasonable expenditures on research and development. (II) Processes that are currently in use anywhere in the world. This clause is not intended to create any conflicting or duplicative regulation of pipelines, including those governing the transportation of oil produced from onshore reserves. (ii) "Oil" refers to crude oil before it is refined into products, including gasoline, bunker fuel, lubricants, and asphalt. Crude oil that is upgraded in quality through residue reduction or other means shall be transported as provided in subparagraphs (A) and (B). (iii) Subparagraphs (A) and (B) shall apply only to new or expanded oil extraction operations. "New extraction operations" means production of offshore oil from leases that did not exist or had never produced oil, as of January 1, 2003, or from platforms, drilling island, subsea completions, or onshore drilling sites, that did not exist as of January 1, 2003. "Expanded oil extraction" means an increase in the geographic extent of existing leases or units, including lease boundary adjustments, or an increase in the number of well heads, on or after January 1, 2003. (iv) For new or expanded oil extraction operations subject to clause (iii), if the crude oil is so highly viscous that pipelining is determined to be an infeasible mode of transportation, or where there is no feasible access to a 20 pipeline, shipment of crude oil may be permitted over land by other modes of transportation, including trains or trucks, which meet all applicable rules and regulations, excluding any waterborne mode of transport. (8) If a state of emergency is declared by the Governor for an emergency that disrupts the transportation of oil by pipeline, oil may be transported by a waterborne vessel, if authorized by permit, in the same manner as required by emergency permits that are issued pursuant to Section 30624. (9) In addition to all other measures that will maximize the protection of marine habitat and environmental quality, when an offshore well is abandoned, the best achievable technology shall be used. b) Where appropriate, monitoring programs to record land surface and near-shore ocean floor movements shall be initiated in locations of new large- scale fluid extraction on land or near shore before operations begin and shall continue until surface conditions have stabilized. Costs of monitoring and mitigation programs shall be borne by liquid and gas extraction operators c) Nothing in this section shall affect the activities of any state agency that is responsible for regulating the extraction, production, or transport of oil and gas. Section 30232 requires protection against oil and hazardous substance spills: Protection against the spillage of crude oil, gas, petroleum products, or hazardous substances shall be provided in relation to any development or transportation of such materials. Effective containment and cleanup facilities and procedures shall be provided for accidental spills that do occur. In Section 30265(a) the California legislature finds with regard to offshore oil transportation: (a) Transportation studies have concluded that pipeline transport of oil is generally both economically feasible and environmentally preferable to other forms of crude oil transport. Oil and gas exploration, development and production must also be consistent with the public access, recreation, environmentally sensitive habitat, visual, cultural, air quality, water quality, and marine resource protection policies, among others, of the Coastal Act stated in other sections of this Plan. C. Goals and Objectives 1. To ensure that oil and gas exploration, development and production is conducted in a manner that is consistent with the City’s beach culture, high quality of life, and environmental values. 21 2. To ensure that oil and gas exploration, development and production is consistent with Measure ___ passed by the electorate on _______________ allowing an Oil and Gas Development Project at 555 6th Street. D. Policies and Programs Policy 1. Oil and gas development is permitted in the coastal zone if found to be consistent with the policies in Chapter 3 of the Coastal Act and this Plan, and as authorized by Measure ___ passed by the electorate on _______________ . Policy 2. Oil and gas drilling sites, including well heads, processing, storage and accessory facilities are permitted only within the Industrial designation on the Land Use Map. Program 2.1. Pursuant to Measure ____ , oil, gas and reinjection well heads and related processing, storage and accessory facilities, excluding pipelines, shall be confined to the 1.3 acre site at 555 6th Street, and shall not be relocated or expanded unless and until an amendment to this Plan is approved by the voters of the City of Hermosa Beach and certified by the Coastal Commission. Policy 3. Pipelines are permitted within the Industrial designation on the Land Use Map and public rights-of-way regardless of land use designation. Program 3.1. Pipelines to convey produced oil and gas within the City of Hermosa Beach shall be confined to the corridor defined by Measure ____ located within the Valley Drive right-of-way from 555 6th Street to Herondo Street to the City of Redondo Beach. Upon completion of pipeline construction, the corridor shall be recontoured, reseeded, landscaped or surfaced, to conform with the surrounding topography and vegetation or surfacing. Any new or replacement pipelines shall be located within the designated pipeline corridor. Program 3.2 All oil and gas products shall be transported by pipeline to processing and refining facilities. Produced resources may be transported by vehicles designed for this purpose only during exploration and construction phases of minimum duration necessary to confirm the petroleum resource, construct facilities on the project site, and construct pipelines. Oil and gas produced from production wells shall be conveyed by pipeline. Policy 4. Processing of oil and gas resources is limited to facilities and activities required for compliant and safe well stream separation of crude oil, gas and formation water, conveyance of unrefined products offsite to a purchaser or refinery, and disposal of waste byproducts. 22 Policy 5. Monitoring and oversight of oil and gas exploration, development and production projects in compliance with this Plan and Coastal Commission requirements may be undertaken by the California State Lands Commission, a trustee agency, or other qualified agency pursuant to agreement of the Coastal Commission, City of Hermosa Beach and the subject agency. Policy 6. Oil and gas exploration, development and production shall use the best achievable control technology to ensure maximum protection of public health and safety and of the integrity and productivity of terrestrial and marine ecosystems. Policy 7. Oil and gas exploration, development and production shall be designed and operated in a manner that minimizes the potential for subsidence hazards and impacts to groundwater aquifers. Policy 8. Oil and gas exploration, development and production shall protect water quality and coastal resources and prevent runoff or discharges. Program 8.1. Oil and gas operators shall submit an oil spill prevention, control and countermeasure plan and an emergency response plan for review and approval by the City and other appropriate agencies as required by law. Policy 9. Oil and gas exploration, development and production shall minimize air emissions and their impacts on the enjoyment of coastal resources, human health and land uses in the surrounding community. Policy 10. Greenhouse gas emissions generated by oil and gas exploration, development and production should be reduced or offset to achieve net zero carbon emissions. Policy 11. Oil and gas exploration, development and production shall be designed, constructed, operated and the site restored in a manner that does not adversely affect coastal access and the enjoyment of recreational resources and activities. Policy 12. Oil and gas exploration, development and production shall be designed, constructed, operated and the site restored in a manner that protects the enjoyment of coastal resources, views and scenic areas and corridors, and maximizes compatibility with the character of surrounding areas. Policy 13. No well stimulation treatment (i.e. acid well stimulation or hydraulic fracturing), consistent with the definitions in Public Resources Code Sections 3150-3160, shall be permitted unless and until an amendment to this Plan is 23 approved by the City of Hermosa Beach voters and certified by the Coastal Commission, after consideration of short- and long-term environmental impacts, and a coastal development permit or amendment as applicable is approved. Policy 14. If onsite and in-kind mitigation are infeasible, offsite mitigation and/or in-lieu fees or programs approved by the City and applicable agencies may be used to mitigate for adverse impacts. Policy 15. Upon completion of exploration, development and production, oil and gas facilities shall be dismantled and removed, and the site cleaned of contamination and reclaimed to natural conditions, or conditions to accommodate reasonably foreseeable development, in an orderly and timely manner that avoids impacts to the health, safety, and welfare of the public and environment. Program 15.1. Upon the completion of exploration, development and production or intentional abandonment of operations, permittee shall obtain all applicable permits to remove, alter or retain facilities, structures, and other improvements, and reclaim the site to natural conditions, or other conditions as may be approved by the City in compliance with applicable laws and permits. In the event the permitee desires to temporarily idle or defer abandonment of operations, the permittee shall obtain City approval pursuant to a review process including consideration of short- and long-term environmental impacts and comply with all laws and regulations. In the event that conditions exist evidencing that the use has been abandoned, the City may pursue remedies allowed by law and compel proper site closure. Program 15.2. The City shall conduct a review process to permit the removal, retention, or abandonment in-place of facilities, structures, and improvements associated with oil and gas facilities determined to be abandoned, and to reclaim the sites to natural conditions, or other conditions as may be approved by the City in compliance with applicable laws and permits. This process shall be independent of any development permits associated with future use of the land, but may be processed concurrently with development permits. 24 BALLOT ORDINANCE ATTACHMENT B Amend the Hermosa Beach Coastal Land Use Plan – Land Use Map (Appendix J) from Open Space to Industrial (IND) on that portion of the property located at 555 6th Street as follows: Project site: Amend from Open Space to Industrial (IND) 25 BALLOT ORDINANCE ATTACHMENT C DIAGRAM OF OIL AND GAS PIPELINES FOR PIPELINE FRANCHISE 26 BALLOT ORDINANCE ATTACHMENT D- DEVELOPMENT AGREEMENT 1 Development Agreement between City of Hermosa Beach and E&B Natural Resources DEVELOPMENT AGREEMENT BY AND BETWEEN CITY OF HERMOSA BEACH AND E&B NATURAL RESOURCES MANAGEMENT CORPORATION THIS DEVELOPMENT AGREEMENT (“Development Agreement” or “Agreement”) is entered into as of the ____ day of ______________, _____, by and between the CITY OF HERMOSA BEACH, a California municipal corporation ("City"), and E&B NATURAL RESOURCES MANAGEMENT CORPORATION, a California corporation (“E&B”). RECITALS A. The City is the owner of that certain real property in the City of Hermosa Beach, County of Los Angeles, and State of California described in Section 2.4 of this Agreement (Exhibit A to this Agreement), and also known informally as the City Maintenance Yard (“Property” or “City Maintenance Yard”). B. On or about January 14, 1992, the City entered into Oil and Gas Lease No. 2 (“Lease”) with Macpherson Oil Company, a California corporation, for itself and for Windward Associates, a California limited partnership, of which it is the general partner (collectively “Macpherson”). The Lease was approved by the California State Lands Commission (“CSLC”). The Lease authorized Macpherson to perform oil and gas extraction activities in the tidelands granted to the City by the State of California, and also authorized Macpherson to utilize the Property for oil and gas drilling activities (“Macpherson Project”). C. During the 1990s, Macpherson sought and obtained approvals for the Macpherson Project from the City, the CSLC, the California Coastal Commission and the South Coast Air Quality Management District. In 1995, the voters of the City passed Proposition E, an initiative to ban oil drilling in the City. During this time, and subsequently, Macpherson, the City, the CSLC, and opponents to the Macpherson Project were parties to several lawsuits regarding the 2 Development Agreement between City of Hermosa Beach and E&B Natural Resources Macpherson Project, including an action by Macpherson against the City in which the court concluded that Proposition E constituted a breach of the Lease (“Macpherson Lawsuit”). Macpherson’s Lawsuit addressing the issue of causation (i.e. whether the City’s termination of the project for health and safety reasons was justified) and seeking damages against the City was scheduled for trial in April 2012. D. E&B, who had no prior relationship with Macpherson, investigated the Macpherson Project and approached the City and Macpherson with a proposal to settle the Macpherson Lawsuit and to provide E&B with a potential opportunity to proceed with “a state- of-the-art directional well oil drilling project conducted from an urban drill site located on the City’s maintenance yard” and “an opportunity to persuade the City’s electorate that a state-of- the-art directional well oil drilling project conducted from the City’s maintenance yard can be accomplished safely and with financial benefits to all of the parties.” (Settlement Agreement, p. 2.) On March 2, 2012, the City, Macpherson and E&B entered into a Settlement Agreement and Release (“Settlement Agreement”). E. The Settlement Agreement, among other consideration, provided for the dismissal of the Macpherson Lawsuit, certain payments to Macpherson, and the assignment to E&B of Macpherson’s rights under the Lease and all other permits for the Macpherson Project which would allow E&B to proceed with a redesigned oil development project (“Project”) under certain conditions. Under the terms of the Settlement Agreement, the City is required to place on the ballot, in a manner that comports with all applicable law, a measure that asks the voters whether to approve, among other things, “a development agreement that would afford E&B a vested right to proceed with the Project . . . .” (Settlement Agreement, p. 7.) F. The California Elections Code sets forth the procedures for a local legislative body to submit a measure to the voters of the City. As contemplated in the Settlement Agreement, the City elected to undertake environmental review of the Project referenced in paragraph E above in accordance with the requirements of the California Environmental Quality Act (“CEQA”). On July 8, 2014, the City Council of City certified an Environmental Impact Report in compliance with CEQA by its adoption of Resolution No. 14-6908. 3 Development Agreement between City of Hermosa Beach and E&B Natural Resources G. The California Legislature enacted Section 65864 et seq. of the Government Code, which provides that cities and counties may enter into development agreements with persons having legal or equitable development interests in real property. Section 65867.5 of the Government Code states that a development agreement is a “legislative act” to be approved by ordinance, and the California Constitution establishes the right of voters to approve legislative acts. Elections Code section 9222 authorizes the City Council to submit any ordinance to the voters for their approval. Section 65869 of the Government Code mandates Coastal Commission approval for any development agreement in an area where a local coastal program has not been certified. H. The City has adopted rules and regulations for consideration of development agreements, pursuant to Government Code Section 65865, in Chapter 17.64 of the City’s Municipal Code. I. In compliance with the Settlement Agreement and all other applicable law, the City submitted the [insert title of Ballot Measure] (“Ballot Measure”) to the voters of the City on [insert date] in compliance with California Elections Code Section 9222. The Ballot Measure includes the following legislative approvals: 1) an amendment to the Land Use Plan of the Local Coastal Program (a component of the City’s General Plan) to modify the land use designation for the Property to allow for the implementation the Project and to provide energy policies in compliance with the California Coastal Act; 2) various amendments to the Municipal Code to allow the Project to proceed on the Property and to remove the restriction on the City’s use of project royalties; 3) a franchise for oil and gas pipelines; 4) amendments to the Oil Code; and 5) this Development Agreement, and in connection with these legislative approvals, CEQA findings including a statement that the project benefits outweigh its unavoidable environmental impacts (i.e. a statement of overriding considerations). These legislative approvals are referred to in this Agreement as “Ballot Measure Approvals.” J. By approving the Ballot Measure and this Agreement, the voters of the City have determined that the public interest is served by entering into this Agreement because the Project, described in Exhibit B to this Agreement, will provide for the remediation of the City Maintenance Yard, and is expected to provide economic benefits to the City and to the Community in the form of royalties as described in the Lease and as further set forth in Exhibit C to this Agreement. 4 Development Agreement between City of Hermosa Beach and E&B Natural Resources K. This Agreement will bind future City Councils to the terms and obligations specified in this Agreement and limit, to the degree specified in this Agreement, the future exercise of the City's ability to regulate development on the Property. L. Upon approval by the voters of the Ballot Measure Approvals, this Agreement and the Project will be consistent with, and will serve to implement the policies, objectives, and standards of the elements of the City of Hermosa Beach General Plan and will be consistent with the standards of the Hermosa Beach Municipal Code (including the Oil Code). M. This Agreement and the Project is consistent with, and will serve to implement, the provisions of Article 3 of the California Coastal Act. N. This Agreement will eliminate uncertainty in planning and provide for the orderly development of the Property and generally serve the public interest. AGREEMENT NOW THEREFORE, in consideration of the above recitals, the mutual covenants and conditions herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agrees as follows: 1 DEFINITIONS For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Agreement" means this Development Agreement by and between the City and E&B. "Approval Date" means the date on which the Ordinance approving this Development Agreement becomes effective under Elections Code Section 9217, specifically ten days after the date the vote is declared by the City Council [INSERT DATE]. 5 Development Agreement between City of Hermosa Beach and E&B Natural Resources “Ballot Measure” means the measure that was approved by the voters on the Election Date. “Ballot Measure Ordinance” or “Ordinance” means the ordinance that accomplishes the Ballot Measure Approvals. “Ballot Measure Approvals” means the: 1) an amendment to the Land Use Plan of the Local Coastal Program (a component of the City’s General Plan) to modify the land use designation for the Property to allow for the implementation the Project and to provide energy policies in compliance with the California Coastal Act; 2) various amendments to the Municipal Code to allow the Project to proceed on the Property and to remove the restriction on the City’s use of project royalties; 3) a franchise for oil and gas pipelines; 4) amendments to the Oil Code; and 5) this Development Agreement, and in connection with these legislative approvals, CEQA findings including a statement that the project benefits outweigh its unavoidable environmental impacts (i.e. a statement of overriding considerations). "CEQA" means the California Environmental Quality Act, Section 21000, et seq., of the California Public Resources Code. "City" means the City of Hermosa Beach, California. "City Council" means the City Council of the City of Hermosa Beach. "Code" or “HBMC” means the Municipal Code of the City of Hermosa Beach. "Commencement Date" means that date when the Commission approves the Development Agreement under Government Code Section 65869; provided, however, if litigation challenging the validity of this Agreement including any Project Approvals and/or environmental review pursuant to CEQA should be brought against the City or the Coastal Commission, the Commencement Date shall be the date such litigation is concluded in a manner that permits the commencement or continuation of the parties' rights and obligations under this Agreement. “Commission” means the California Coastal Commission. “Conditional Use Permit” means the Conditional Use Permit for Oil Development at 6 Development Agreement between City of Hermosa Beach and E&B Natural Resources the City Maintenance Yard, approved by the City in Resolution No. 93-5632, and the validity of which was confirmed by the Settlement Agreement, which is to be abandoned and superseded pursuant to the terms of this Agreement. "Current Land Use Regulations" means the ordinances, resolutions, rules, regulations, requirements and official policies of the City in force as of the date on which the City Council calls the election on the Ballot Measure, as amended by the Ballot Measure Approvals. "Development Agreement Act" means Section 65864 et seq., of the California Government Code. “E&B” means E & B NATURAL RESOURCES MANAGEMENT CORPORATION, a California corporation in the business of exploring for and producing oil and gas and each of its respective successors and assigns to all or any portion of its interests in the Property during such time as such portion is subject to this Agreement. “Election Date” means March 3, 2015. "Event of Default" is defined in Section 5.1.1. "Exactions" means any requirement imposed by the City in connection with or pursuant to any land use regulation or land use approval process for the dedication of land, construction or improvement of public improvements or amenities, payment of development fees, or other mitigation measures required to mitigate the impacts of the development including, without limitation, all development impact fees or linkage fees, utility capacity fees, service or connection fees, major facilities fees, park fees, flood control fees, environmental impact mitigation fees, affordable housing fees, arts fees, transportation fees, child care fees and any similar governmental fees, charges and exactions required for the development of projects or property. "Force Majeure Delay" is defined in Section 6.23. "Future Ministerial Permits" is defined in Section 3.2.1. "General Plan" means the General Plan of the City as of the Effective Date. “Off-site Project Components” or “Off-site Components” means the Project 7 Development Agreement between City of Hermosa Beach and E&B Natural Resources components in the City of Hermosa Beach outside of the Property as described in Exhibit B to this Agreement, including (1) oil and gas pipelines along Valley Drive, Hermosa Beach, California, (2) supply staging/storage at 601 Cypress Avenue, Hermosa Beach, California, (3) a parking lot at 636 Cypress Avenue, Hermosa Beach, California, and (4) various locations outside the jurisdiction of Hermosa Beach. The location of (2) is more particularly described in Exhibit A-2 and the location of (3) is more particularly described in Exhi`bit A-3. “Oil Code” means the Hermosa Beach Oil Code, Chapter 21A (Oil Production), approved by the City with Ordinance No. 85-803. "Processing Fees" means all routine and generally applicable City-wide fees required by the City for processing applications and permits including, but not limited to, fees for land use applications, project permits, building applications, building permits, grading permits, maps and certificates of occupancy in effect at the time paid. Expressly exempted from Processing Fees are all Exactions. "Project" means the proposed oil and gas drilling and production project as described in the Project Description contained in Exhibit B. "Project Approvals" means the approvals for the Project as set forth in Section 2.6 of this Agreement. "Public Benefits" means those improvements to be constructed, services to be provided and/or amounts to be paid by E&B to the City as consideration for this Agreement pursuant to Section 2.1 and Exhibit C. "Term" means the term of this Agreement, as provided in Section 6.1 of this Agreement. "Zoning Ordinance" means the comprehensive Zoning Ordinance of the City, found in Chapter 17 of the Code of the City of Hermosa Beach as it exists on the Effective Date. 2 THE DEVELOPMENT AGREEMENT PROCESS 2.1 Statement of Benefits and Consideration. The voters of the City have determined that the 8 Development Agreement between City of Hermosa Beach and E&B Natural Resources Project is a development for which a development agreement is appropriate. Development of the Project in accordance with a development agreement will provide for the orderly development of the Property in accordance with the objectives set forth in the General Plan, including the Land Use Plan of the Local Coastal Program, as amended. Moreover, a development agreement for the Project will eliminate uncertainty in planning for and securing orderly development of the Property, a purpose for which the Development Agreement Act was enacted as set forth in Government Code Section 65864. In exchange for these and other benefits to the City, E&B will receive the assurance that E&B may develop the Project during the Term of this Agreement, subject to the terms and conditions herein contained. By approving Ballot Measure ___, the voters of the City have found and determined that this Agreement is consistent with the General Plan, including the Land Use Plan of the Local Coastal Program, as amended, and have approved this Agreement. This Agreement does not (1) grant density or intensity in excess of that otherwise established in the Project Approvals, (2) supersede, nullify or amend any condition imposed in the Project Approvals, (3) guarantee to E&B any profits from the Project, or (4) prohibit or, if legally required, indicate E&B’s consent to, the Property's inclusion in any public financing district or assessment district. The City is expected to receive benefits as a result of the development of the Property in accordance with this Agreement, as set forth in Exhibit C, in recognition of and in exchange for this Agreement and the benefits provided to E&B pursuant to this Agreement. The voters of the City acknowledge the adequacy of the consideration provided by E&B to the City pursuant to this Agreement. In consideration of the benefits, commitments and consideration to be provided by E&B pursuant to this Agreement and in order to strengthen the public planning process and reduce the economic costs of development, the voters of the City hereby provide E&B assurance that it can proceed with the development of the Property for the Term of this Agreement pursuant to the land use, density and intensity specified in the Current Land Use Regulations, the Project Approvals and this Agreement. E&B would not enter into this Agreement or agree to provide the public benefits, commitments and consideration described in this Agreement if it were not for the certainty provided by this Agreement that the Property can be developed during the Term of this Agreement in accordance with the 9 Development Agreement between City of Hermosa Beach and E&B Natural Resources Current Land Use Regulations and the Project Approvals including the land use, density and intensity set forth in the Project Approvals. 2.2 Public Hearings. On June 23, 2014, the Planning Commission of the City, after providing notice as required by law, held public hearings on the legislative elements of the Project, including this Agreement and the amendments to the Hermosa Beach Municipal Code and Coastal Land Use Plan and the EIR. The City Council, after providing public notice as required by law, similarly held public hearings on the Project, including this Agreement on July 8, 2014 and October 14, 2014. 2.3 City Council and Voter Findings. The City Council adopted findings that review of the environmental impacts of this Agreement and the Project Approvals has been conducted in accordance with the provisions of CEQA and the State and local guidelines adopted thereunder, and the City Council has given consideration to such environmental review prior to placing the Ballot Measure on the ballot and has undertaken all actions necessary to comply with CEQA. In approving the Ballot Measure and this Agreement, the voters of the City have determined and found that this Agreement is consistent with the General Plan, including the Land Use Plan of the Local Coastal Program, as amended, and all other applicable City plans, policies and regulations, and is consistent with the standards of the Hermosa Beach Municipal Code (including the Oil Code), all as amended by the Ballot Measure Approvals. 2.4 Property. The Property includes all real property that is subject to this Agreement. The Property as of the Election Date is commonly known as City Maintenance Yard, as more fully described in Exhibit A-1 incorporated herein by reference. 2.5 The Project. The Project consists of the development, construction and operations on the Property permitted under this Agreement and the Project Approvals. The description of the Project and its uses are more fully described in the Project Description set forth in Exhibit B which is incorporated herein by reference. The Project includes Off-site Components within the City of Hermosa Beach, and other elements located outside of the City. 2.6 Project Approvals. The Project includes, without limitation, all items described in the 10 Development Agreement between City of Hermosa Beach and E&B Natural Resources Project Description contained in Exhibit B and incorporated herein by reference and the following Project Approvals: (a) Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93- 5632 (as set forth in Section 2.7 below, to be abandoned per HBMC Section 17.70.030 and superseded pursuant to the terms of this Agreement); (b) Environmental Impact Report, dated June 2014, prepared pursuant to CEQA and certified by the City Council on July 8, 2014 (with revisions identified in City Council Resolution No. 14-6908); (c) Amendments to the Land Use Plan and Land Use Plan Map of the Local Coastal Program (a component of the City’s General Plan), approved by Ballot Measure __ on ________________, and by Commission [insert Commission action] on ______________________; (d) Amendment to the Municipal Code, approved by Ballot Measure __ on _________________; (e) Franchise for Oil and Gas Pipelines, approved by Ballot Measure __ on _______________; (f) Amendment to the Oil Code, approved by Ballot Measure __ on _______________; and (e) Development Agreement, approved by Ballot Measure __ on _________________, and by Commission [insert Commission action] on _________________. 2.7. Abandonment of Conditional Use Permit. With adoption of the Ballot Measure, oil drilling and production is permitted on the Property subject to a development agreement. The relevant conditions of approval from the 1993 Conditional Use Permit (CUP) for oil development at the Property (Resolution No. 93-5632) are incorporated into this Development Agreement as Exhibit 11 Development Agreement between City of Hermosa Beach and E&B Natural Resources D-1 herein, and E&B shall comply with said conditions as required herein. Thus, upon the Commencement Date, this agreement will supersede the 1993 CUP, which shall no longer serve a regulatory purpose. Hermosa Beach Municipal Code Section 17.70.030 allows for voluntary abandonment of a Conditional Use Permit. This Agreement at the Commencement Date shall serve as both a written request to abandon the CUP and the City’s declaration that the 1993 CUP is abandoned. 3 VESTED DEVELOPMENT RIGHTS 3.1 Vested Rights to Develop. Subject to the terms, conditions, and covenants of this Agreement, including the Reservations of Power in Section 3.4, and the conditions of approval and mitigation measures attached hereto and incorporated herein as Exhibit D, E&B shall, as of the Approval Date, have a vested right to develop the Property and Project, including Off-site Components, in accordance with, and to the extent of, the Project Approvals, and the Current Land Use Regulations. The approved use of the Property, the density and intensity of use, the maximum height, footprint, and square footage of proposed buildings and structures, and provisions for reservation and dedication of land or public purposes shall be those set forth in the Project Approvals and the attached Exhibits. Nothing in this Agreement shall be deemed to obligate E&B to initiate development of the Project or any portion thereof within any period of time or at all, subject to the terms of the Lease and the Settlement Agreement, including but not limited to E&B’s obligation to proceed with due diligence provided for in Section 12.3 of the Settlement Agreement. 3.1.1 Certain Changes Prohibited Without Consent of E&B. Except as otherwise provided in this Agreement, during the Term, the City shall not, as to the Property and the Project, including Off-site Components, without the prior written consent of E&B, which may be withheld in E&B’s sole and unfettered discretion: (a) change the Current Land Use Regulations, or Project Approvals as they apply to the Property or Project so as to prevent or adversely affect development or construction of the Project in accordance with this Agreement, the Current Land Use Regulations or Project Approvals; or (b) apply to the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that is inconsistent with the Current Land Use Regulations or Project Approvals, so as to prevent or adversely affect 12 Development Agreement between City of Hermosa Beach and E&B Natural Resources development or construction of the Project in accordance with this Agreement, the Current Land Use Regulations or Project Approvals, or prevent or adversely affect the operation of the Project as contemplated hereby in accordance with the Current Land Use Regulations or Project Approvals; or (c) apply to this Agreement, the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that requires additional discretionary review or approval not otherwise required for the Project by the Current Land Use Regulations or Project Approvals; or (d) apply to this Agreement, the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that materially, adversely affects the timing or phasing of construction or development, or which limits the availability of utilities or other infrastructure for the Project. For the purposes of this Section 3.1, “prevent or adversely affect development or construction of the Project” shall include, without limitation, any changes which fundamentally affect the ability of any of the permitted uses to operate within the Project (e.g. prohibit any of the uses in the Project Approvals, change parking standards for any of the uses, etc.). 3.1.2 Rights are Vested. Unless amended or terminated in the manner specified in this Agreement (and subject to the provisions of this Agreement), E&B shall have the rights and benefits afforded by this Agreement and this Agreement shall be enforceable by E&B and the City notwithstanding any growth control measure, initiative, proposition or any development moratorium adopted after the Approval Date, or any change in the General Plan, zoning, or subdivision regulations adopted by the City which alter or amend the Current Land Use Regulations or Project Approvals or the adoption of any new or amended ordinance, resolution, rule, regulation, requirement or official policy that is inconsistent with the Current Land Use Regulations or Project Approvals and so as to prevent or adversely affect development or construction of the Project in accordance with the Current Land Use Regulations or Project Approvals. This Section shall be construed to prohibit the City from applying to the Property or the Project, including any Off-site Components, any development moratorium or growth control measure that is adopted specifically to prohibit the construction or operation of the Project, or as an interim measure pending contemplated General Plan, Specific Plan or zoning changes, or as a general growth control management measure except as provided for pursuant to Section 3.4. 3.1.3 Future Changes to Current Land Use Regulations. Following the 13 Development Agreement between City of Hermosa Beach and E&B Natural Resources Approval Date, if the City modifies the Current Land Use Regulations in a manner that E&B, in its sole discretion, determines is more beneficial than the Current Land Use Regulations, then E&B may choose in its sole discretion to be governed by the modified land use regulations rather than the Current Land Use Regulations, without E&B being deemed to have waived or limited any rights, remedies or privileges under this Agreement. 3.2 Other Rights. 3.2.1 Future Ministerial Permits. E&B will seek additional ministerial permits as required by the City, including, without limitation, excavation only permits, grading permits, demolition permits, building permits, well permits, drilling permits and public works permits, as needed to implement the Project Approvals and to construct and operate the Project. Collectively, these ministerial permit applications are called the "Future Ministerial Permits". The City agrees that it will not unreasonably withhold or unreasonably condition any of the Future Ministerial Permits which must be issued by the City in order for the Project to proceed, provided that E&B reasonably and satisfactorily complies with all preliminary procedures, actions, payment of Processing Fees and criteria generally required for processing such Future Ministerial Permits, and provided further that such Future Ministerial Permits comply with this Agreement, the Current Land Use Regulations and the Project Approvals and approvals of other governmental agencies with jurisdiction over the Project. The City further agrees that no discretionary permits, other than the Project Approvals, are required from the City to construct and operate the Project. 3.3 Reservations of Power. 3.3.1 Limitations, Reservations and Exceptions. Notwithstanding any other provision of this Agreement, the following subsequent land use regulations shall apply to the development of the Property: (a) Processing Fees (but not Exactions) imposed by the City to cover the estimated actual costs to the City of processing applications for Project Approvals, fees for monitoring compliance with any Project Approvals, inspection fees, or fees for monitoring compliance with environmental mitigation measures. 14 Development Agreement between City of Hermosa Beach and E&B Natural Resources (b) Procedural regulations applied on a City-wide, nondiscriminatory basis relating to City entities required to review petitions or applications, forms of petitions and applications, notice requirements, information requested with petitions or applications, conduct of hearings, form of staff reports, nature and type of recommendations by City entities, appeal procedures and any other similar matters of procedure. (c) Regulations governing building codes and similar construction standards and specifications including, but not limited to, the California and International Codes, as they may be changed from time to time. (d) Regulations that are necessary to protect the public health and safety, including without limitation, development moratorium or limitation on the delivery of City-provided utility services, which meet each of the following requirements: (a) are based on genuine health, safety and general welfare concerns (other than general growth management issues); (b) which arise out of a documented emergency situation, as declared by the President of the United States, Governor of California, or the Mayor or City Council of the City of Hermosa Beach; and (c) are based upon its terms or its effect as applied, does not apply exclusively or primarily to the Property or the Project. To the extent possible, any such regulations shall be applied and construed so as to provide E&B with the rights and assurances provided under this Agreement. This subsection governs generally applicable emergencies in the area not specifically related to or caused by the Project. (e) Regulations that are not in conflict with the Project Approvals, Current Land Use Regulations or this Agreement. Any regulation, whether adopted by initiative or otherwise, limiting the rate, timing, phasing or sequencing of development of the Property shall be deemed to conflict with the Project and shall therefore not be applicable to the development of the Property. Any regulation limiting the permitted uses of the Property, limiting the density or intensity of use of the Property, or limiting the size, height or location of improvements on the Property shall be deemed to conflict with the Project Approvals and shall therefore not be applicable to the development of the Property. (f) Regulations that are in conflict with the Project, but as to which the E&B has given its prior written consent for such regulations to be applied to the Property or to the development of the Property. 15 Development Agreement between City of Hermosa Beach and E&B Natural Resources (g) Regulations applied on a City-wide, non-discriminatory basis that do not prevent or adversely affect development or construction of the Project. 3.3.2 Modification or Suspension by State or Federal Law. In the event that state or federal laws or regulations, or those of any regional authority having jurisdiction over the Project or Property, enacted after the Approval Date of this Agreement, prevent or preclude compliance with one or more of the provisions of this Agreement or the Project conditions, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such state, federal, or regional authority laws or regulations and to effectuate to the extent possible the terms of this Agreement. 3.3.3 Police Power. The parties acknowledge and agree that City is restricted in its authority to limit its police power by development agreement and that the foregoing limitations, reservations and exceptions are intended to reserve to City all of its police power which cannot be so limited. This Agreement shall be construed to reserve to City all such power and authority which cannot be restricted by development agreement. 3.3.4 Taxes, Assessments and Fees. Anything herein to the contrary notwithstanding, City may impose on the Project any new non-discriminatory, City-wide taxes, assessments and fees, including but not limited to business license taxes or franchise fees, but not including any Exaction or other fee designated to mitigate the impact of development of the Project. 3.4 Regulation by Other Public Agencies. It is acknowledged by the parties that other public agencies not within the control of the City may possess authority to regulate aspects of the development of the Property separately from or jointly with City, and this Agreement does not limit the authority of such other public agencies. Changes to the project mandated by such regulatory agencies shall be automatically included into this Development Agreement as authorized in Section 11.F of the Ballot Measure and shall supersede any inconsistent provisions herein. 3.5 Agreement and Assurances on the Part of E&B. Without in any way limiting E&B’s rights under Section 5.2.2 not to proceed with development of the Project and, in such an event, to terminate this Agreement in its sole and subjective business judgment, if E&B 16 Development Agreement between City of Hermosa Beach and E&B Natural Resources proceeds with the Project, E&B agrees that it will use commercially reasonable efforts, in accordance with its own business judgment and taking into account market conditions and economic considerations, to develop the Project, in accordance with the terms and conditions of this Agreement, the Current Land Use Regulations, the Lease and the Project Approvals. 3.6 Public Benefits. 3.6.1 The parties acknowledge and agree that development of the Project will result in public benefits as set forth in Exhibit C. The voters of the City acknowledge the adequacy of the consideration, including the Public Benefits, provided by E&B pursuant to this Agreement. 3.6.2 Exactions and Processing Fees. 3.6.2.1 Exactions. No Exaction may be imposed on this Project except as specifically articulated in this Agreement, and except as required by the conditions of approval and the Mitigation Monitoring and Reporting Program contained in Exhibit D. 3.6.2.2 Processing Fees. E&B shall pay to the City all applicable Processing Fees regularly charged by the City and the amount of such Processing Fees may be increased from time to time on a non-discriminatory City-wide basis. 3.7 Public Improvements and Utilities 3.7.1 Installation Obligations. The parties hereby agree that the obligations to install public improvements and utilities necessary for the development of the Property shall be as provided for in the Project Approvals. 3.7.2 City-Provided Utilities: Reservation of Sufficient Capacity. To the extent that it is within the control of the City, the City shall use its best efforts to ensure that there shall be sufficient capacity, facilities and services with respect to City-provided utilities to complete construction of the Project, provided that E&B bear all costs incurred by the City in doing so. The City agrees that if limitations in the provision of utilities become necessary due to the existence of an emergency situation, they shall be applied only to the extent necessary to respond 17 Development Agreement between City of Hermosa Beach and E&B Natural Resources to such emergency, and shall not be applied against the Property or the Project in a discriminatory manner. 3.7.3 City-Provided Utilities: Nondiscriminatory Rates and Provision of Service. The City agrees that rates and charges for City-provided utilities for the Property and Project shall not be set or imposed in a discriminatory manner, but shall be those rates and charges that are or would be generally applicable to any user of a comparable quantity and quality of the utility use in the City (i.e., any other entity whose use or consumption of the utility is comparable to that of E&B), and that the City shall not discriminate against the Property or the Project in the provision of any City-provided utilities (such as potable and reclaimed water, sewer and drainage). 3.7.4 Dedications, Reservations and Conditions of Development. The portions of Property to be reserved or dedicated for public purposes pursuant to this Agreement, if any, shall be that property described in the Project Approvals. Unless otherwise indicated herein, the property described in the Project Approvals to be reserved or dedicated for public use shall be dedicated by E&B as provided in the Project Approvals. The City shall take such actions as may be necessary to vacate any prior dedications, offers to dedicate and grants of easements that are no longer necessary for the development of the Project in accordance with this Agreement. 3.8 Mitigation Measures and Conditions of Approval. E&B shall at its own expense timely perform all mitigation measures identified in the environmental documentation for the Project and conditions of approval identified in the Project Approvals as set forth in Exhibit D. E&B shall have no duty to complete the mitigation measures or conditions of approval, except as otherwise set forth in this Agreement, if the contemplated development fails to occur. 4 ASSIGNMENT, AMENDMENT AND REVIEW 4.1 Assignment 18 Development Agreement between City of Hermosa Beach and E&B Natural Resources 4.1.1 Right to Assign. E&B shall have the right to sell, transfer or assign its rights or interests in the Property in whole or in part (provided that no such partial transfer shall be permitted to cause a violation of the Subdivision Map Act, Government Code Section 66410 et seq.) to any person, partnership, joint venture, firm or corporation at any time during the Term, other than Macpherson or any of its related entities, subject to the City’s consent, as provided in Subsection 4.1.2. The conditions and covenants set forth in this Agreement and incorporated herein shall run with the land and the benefits and burdens shall bind and inure to the benefit of the parties. Any such sale, transfer or assignment shall include the assignment and assumption of the rights, duties and obligations arising under or from this Agreement with respect to the property transferred and shall be made in strict compliance with the following requirements: (a) Except as provided in Section 6.17 of this Agreement, no sale, transfer or assignment of any right or interest under this Agreement shall be made unless made together with the sale, transfer or assignment of all or a part of the Property and then, only in accordance herewith. (b) Concurrently with the closing of such sale, transfer or assignment, E&B shall provide the City with an executed agreement by the purchaser, transferee or assignee and providing therein that the purchaser, transferee or assignee expressly and unconditionally assumes the duties and obligations of E&B under this Agreement to the extent of such transfer or assignment, in a form satisfactory to the City Attorney. (c) The purchaser, transferee or assignee shall provide the City with security equivalent to any security previously provided by E&B to secure performance of its obligations hereunder, if any, or under any of the Project Approvals. Any sale, transfer or assignment under Section 4.1 of this Agreement not made in strict compliance with the foregoing conditions shall constitute a default by E&B under this Agreement and any such assignment shall be void and of no effect. Notwithstanding the failure of any purchaser, transferee or assignee to execute the agreement required by subparagraph (b) of this Subsection 4.1.1, the burdens of this Agreement shall be binding upon such purchaser, transferee or assignee, but the benefits of this Agreement shall not inure to such purchaser, transferee or assignee until and unless such agreement is executed. 19 Development Agreement between City of Hermosa Beach and E&B Natural Resources 4.1.2 City’s Reasonable Consent Required. E&B may sell, transfer or assign its rights or interests in the Property in whole or in part and this Agreement to any other person, partnership, joint venture, firm, corporation, trust or other lawful entity other than Macpherson or any of its related entities with the City’s consent, which consent shall not be unreasonably withheld or conditioned or delayed (“Transfer”). In the event E&B desires to make such Transfer, E&B shall submit to the City a request for approval at least ninety (90) days prior to such Transfer, which approval shall not be unreasonably withheld, conditioned or delayed by the City. The City may withhold, condition or delay its approval upon finding of any of the following: (a) The proposed purchaser, transferee or assignee lacks the financial ability to perform the obligations of this Agreement; (b) The proposed purchaser, transferee or assignee lacks the necessary qualifications, competence, experience or capability to implement the development plan contemplated by the Project Approvals with the skill, expertise and quality equivalent to that of E&B; provided, however, if the proposed purchaser, transferee or assignee is a nationally or regionally recognized, or regionally known in Southern California, as an owner or developer of oil and gas facilities, such proposed purchaser, transferee or assignee shall be deemed to have met this requirement; or (c) The proposed purchaser, transferee or assignee has a documented record of performance failures operating oil drilling and production projects at other locations that resulted in environmental damage, injuries to person or property or other conditions or circumstances detrimental to public health, safety and welfare; (d) An Event of Default by E&B as defined in Section 5.1.1 has occurred and is continuing under this Agreement. E&B’s request for approval of a Transfer shall be accompanied by all documentation reasonably calculated to allow the City to evaluate the qualifications of the proposed Transferee; notwithstanding, E&B shall provide to the City such additional information and documentation that the City reasonably requests in order for the City to make any determinations provided for by this Subsection 4.1.2. E&B agrees to provide such information on a timely basis sufficient to permit the City to make its determinations within the ninety (90) day time period. Should the necessary documentation not be provided timely, or 20 Development Agreement between City of Hermosa Beach and E&B Natural Resources should the information and documents provided reasonably require additional review, evaluation and consideration by the City or the City’s consultants that cannot be completed within the ninety (90) day time period, the City may in its reasonable discretion extend this period as necessary to complete its review of the proposed transfer for an additional thirty (30) days, or longer if the reason for the delay is E&B’s failure to provide the documentation in a timely manner. 4.1.3 Applicability. The provisions of Sections 4.1.1 and 4.1.2 shall not be applicable to a Transfer as a result of which E&B retains at least a fifty (50) percent interest in the Property. 4.2 Changes and Amendments to Project 4.2.1 In the event E&B reasonably finds that a change or amendment in the Project Approvals is reasonably necessary or appropriate, E&B shall apply for any required changes to the Project Approvals. Any such application that does not require an amendment to the Zoning Ordinance, or General Plan shall be processed in the normal manner for processing such matters in accordance with the Current Land Use Regulations, except as otherwise provided by this Agreement, including the Reservations of Power. Any application that requires an amendment to the Zoning Ordinance, or General Plan shall be processed in the normal manner for processing such matters in accordance with the land use regulations in effect at the time the application is filed. 4.2.2 Minor Changes to Project - No Amendment of Agreement The parties acknowledge that refinements or modifications of the Project may be required during the Term. The parties agree that refinements and modifications which constitute a "Minor Change” in the Project or Project Approvals shall not require an amendment to this Agreement or public notice and a hearing. For any such Minor Change, the City shall not impose as a condition to approval any Exaction, except as authorized in this Agreement. The City Manager, subject to the City Council’s approval, shall be authorized to make the determination on behalf of the City whether a requested refinement or modification may be effectuated pursuant to this Section 4.2.2 or whether the requested refinement or modification is of such a character to require an amendment hereof pursuant to Section 4.2.3. The City Manager, 21 Development Agreement between City of Hermosa Beach and E&B Natural Resources subject to the City Council’s approval, shall be authorized to approve any Minor Changes hereunder on behalf of the City. If and when the parties find that Minor Changes are necessary or appropriate, they shall, unless otherwise required by law, effectuate such changes or adjustments through a letter prepared by the City Manager and approved by the City Council, which, after execution, shall be attached hereto as addenda and become a part hereof. The City Manager may consult with technical experts in making the determination that a requested refinement or modification is a “Major” or “Minor Change.” The City Manager shall not unreasonably withhold or delay its determination that a requested refinement or modification is a “Minor Change” as that term is used herein. The changes described below shall not be deemed Minor Changes; however, the examples listed below are listed for reference only, and are not intended to provide a complete list of changes that may not be deemed as Minor Changes: (a) Alters the permitted uses of the Property as a whole; (b) Requires an amendment to the Zoning Ordinance, or General Plan, or other legislative acts not contemplated in this Agreement; (c) Increases the density or intensity of use of the Property as a whole; (d) Constitutes a project requiring a subsequent or supplemental environmental impact report pursuant to Public Resources Code Section 21166; (e) Creates a situation adverse to public health or safety. 4.2.3 Other Changes. Any change in the Project which does not qualify as a "Minor Change" as defined herein shall require an amendment to this Agreement as provided in Section 6.9, and compliance with CEQA as applicable. 4.3 Annual/Special Review. 4.3.1 Annual Review. The City shall, at least every twelve (12) months during the Term of this Agreement, review the extent of good faith substantial compliance by E&B with the terms of this Agreement. Subject to the notice and cure procedure set forth in Section 5.1.2, such a periodic review may result in amendment or termination of this Agreement, provided a 22 Development Agreement between City of Hermosa Beach and E&B Natural Resources default has been established under the terms of this Agreement. Pursuant to Government Code Section 65865.1, as amended, E&B shall have the duty to file an annual review request with the City, pay any applicable Processing Fees for such annual review and demonstrate its good faith compliance with the terms of this Agreement at such periodic review. Processing fees for such review are to include, but are not limited to, all costs incurred by the City in retaining the necessary professionals and experts to provide the City with the necessary input regarding the annual review, including but not limited to City Attorney, consultant and other third parties the City deems necessary to conduct the annual review. Upon request by the City, E&B shall provide such information as may be necessary or appropriate in order to ascertain compliance with this Agreement. 4.3.1.1 Any party may address any requirement of this Agreement during the review. However, ten (10) days’ written notice of any requirement to be addressed shall be made by the requesting party. If at the time of review an issue not previously identified in writing is required to be addressed, the review at the request of either party shall be continued to afford sufficient time for analysis and preparation. 4.3.2 Special Review. The City Council may order a special review of compliance with this Agreement at any time. The Director of Community Development or City Council, as determined from time to time by the City Council, shall conduct such special reviews. Any special review shall comply with the procedural provisions and Processing Fees of an annual review as provided by Section 4.3.1. 4.3.3 Opportunity to be Heard. Upon written request to the City by E&B, E&B shall be permitted an opportunity to be heard orally and/or in writing at a hearing before the City Council regarding its performance under this Agreement. E&B shall also be heard before the City Council at any required public hearing concerning a review of action on the Agreement. Such hearings requested by E&B shall be subject to the Processing Fees provision of Section 4.3.1. 4.3.4 Information to be Provided E&B. The City shall, to such an extent as is practical, deposit in the mail to E&B a copy of staff reports and related exhibits concerning contract performance a minimum of seven (7) business days prior to any such review or action upon this Agreement by the Planning Commission or the City Council. 23 Development Agreement between City of Hermosa Beach and E&B Natural Resources 5 DEFAULT, REMEDIES AND TERMINATION 5.1 Enforceability. 5.1.1 Default. Subject to Sections 5.1.2 and 5.1.3, failure by any party to perform any term or provision of this Agreement required to be performed by such party shall constitute an event of default ("Event of Default”). In the event that E&B files for reorganization or other relief under any Federal or State bankruptcy or insolvency law, whether voluntarily or by involuntary bankruptcy or insolvency action, all provisions of this Agreement shall remain in full force and effect unless E&B engages in an Event of Default. For purposes of this Agreement, a party claiming another party is in default shall be referred to as the "Complaining Party", and the party alleged to be in default shall be referred to as the "Party in Default". 5.1.2 Procedure Regarding Defaults. 5.1.2.1 Notice of Default. The Complaining Party shall give written notice of default to the Party in Default, specifying the default complained of by the Complaining Party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. The Party in Default shall diligently endeavor to cure, correct or remedy the matter complained of, provided the such cure, correction or remedy shall be completed within the applicable time period set forth herein after receipt of written notice (or such additional, time as may be deemed by the Complaining Party to be reasonably necessary to correct the matter). Any failures or delays by a Complaining Party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by a Complaining Party in asserting any of its rights and remedies shall not deprive the Complaining Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. If an Event of Default occurs, prior to exercising any remedies, the Complaining Party shall give the Party in Default written notice of such default. Without limitation, evidence of default may arise in the course of the regularly scheduled annual review or a special review described in Section 4.3. 5.1.2.2 Cure Periods. If the default is reasonably capable of being cured within thirty (30) days, the Party in Default shall have such period to effect a cure prior to 24 Development Agreement between City of Hermosa Beach and E&B Natural Resources exercise of remedies by the Complaining Party. If the nature of the alleged default is such that it cannot practicably be cured within such thirty (30) day period, the cure shall be deemed to have occurred within such thirty (30) day period if (i) the cure is commenced at the earliest practicable date following receipt of the notice; (ii) the cure is diligently prosecuted to completion at all times thereafter; (iii) at the earliest practicable date (in no event later than thirty (30) days after the curing party's receipt of the notice), the curing party provides written notice to the other party that the cure cannot practicably be completed within such thirty (30) day period; and (iv) the cure is completed at the earliest practicable date. In no event shall the Complaining Party be precluded from exercising remedies, subject to the preceding sentence if a default is not cured within sixty (60) days after the first notice of default is given. Subject to the foregoing, if a party fails to cure a default in accordance with the foregoing, the Complaining Party, at its option, may terminate this Agreement pursuant to this Agreement and California Government Code Section 65868, and/or institute legal proceedings pursuant to this Agreement. 5.1.2.3 Procedures Regarding City Termination. Notice of intent to terminate shall be by certified mail, return receipt requested. Upon delivery by the City of notice of intent to terminate, the matter shall be scheduled for consideration and review by the City Council within thirty (30) days in accordance with Government Code Sections 65867 and 65868. Upon consideration of the evidence presented in said review and a determination by the City Council based thereon, the City may give written notice of termination of this Agreement to E&B. Any determination of default (or any determination of failure to demonstrate good faith compliance as a part of annual review) made by the City against E&B, or any person who succeeds to E&B with respect to any portion of the Property, shall be based upon written findings supported by substantial evidence in the record. Any purported termination of this Agreement for alleged default shall be subject to review in the Superior Court of the County of Los Angeles pursuant to Code of Civil Procedure § 1094.5(c). 5.1.3 Institution of Legal Action. Subject to notice of default and opportunity to cure under Section 5.1.2, and subject further to the limitation on remedies set forth in Section 5.1.4, in addition to any other rights or remedies, any party to this Agreement may institute legal action to cure, correct or remedy any default, to enforce any covenants or agreements herein, to enjoin any threatened or attempted violation hereof, or to obtain any other remedies consistent with this Agreement. If a legal action or proceeding is brought by any party to this Agreement 25 Development Agreement between City of Hermosa Beach and E&B Natural Resources because of an Event of Default under this Agreement, or to enforce a provision hereof, the prevailing party shall be entitled to reimbursement of all costs and expenses, including reasonable attorneys’ fees, incurred in prosecuting such legal action or proceeding. This provision is separate and several and shall survive the merger of this Agreement into any judgment on this Agreement. Additionally, in the event of a court finding in an action brought by the City (1) a violation of this development agreement or the conditions of approval in Exhibit D to this Agreement resulting in a condition detrimental to the public health, safety or welfare and following notice and an opportunity to cure, or (2) a violation of an order issued under Hermosa Beach Oil Code Section 21-A-10.1 (following disposition of an appeal if any filed under Section 21-A-10.2), a court may impose civil penalties up to $10,000/per day for each day in which E&B is determined to be non-compliant. 5.1.4 Remedies. 5.1.4.1 E&B’s Remedies. It is acknowledged by the parties that the City would not have entered into this Agreement if it were liable in damages under or with respect to this Agreement or the application thereof. In addition, the parties agree that monetary damages are not an adequate remedy for E&B if the City should be determined to be in default under this Agreement. The parties further agree that specific performance shall be E&B’s only remedy under this Agreement and E&B may not seek monetary damages in the event of a default by City under this Agreement. E&B covenants not to sue for or obtain monetary damages for the breach by City of any provision of this Agreement. 5.1.4.2 City's Remedies. The parties agree that the City shall have limited remedies for monetary damages and specific performance as specifically provided for in this Section 5.1.4.2. The City shall not have any right to compel specific performance with respect to the construction of the Project, or any obligation to construct the Project, including without limitation Section 3.7. Further, the City shall have no right to monetary damages as a result of E&B's failure to construct the Project or its failure to comply with Section 3.7. The City shall have the right to sue for monetary damages for failure by the E&B to pay any amounts owing under this Agreement including without limitation any amounts owing pursuant to Section 6.5.1. City also shall have the right to seek monetary damages for reimbursement of the actual cost to the City incurred by the City to construct, complete, demolish, remove or restore any physical infrastructure improvement in the public right of way which E&B commences construction of 26 Development Agreement between City of Hermosa Beach and E&B Natural Resources but fails to complete. If E&B’s failure or refusal to perform any provision of this Agreement causes an immediate and serious threat to life, health, property or natural resources, the City may pursue all remedies including but not limited to remedies available under the Hermosa Beach Oil Code Chapter 21-A (including the provisions of Article X, which allow for immediate cessation of operations) and Section 21 of the Lease. 5.1.4.3 Other Actions. Nothing in this Agreement shall be deemed to waive or limit any rights and remedies that the parties would otherwise have against the other relating to matters not covered by this Agreement. 5.2 Termination of Agreement. 5.2.1 As to the Property and all of the rights of E&B hereunder, and except as otherwise provided in this Agreement, this Agreement shall be deemed terminated and of no further effect upon the expiration of the Term of this Agreement unless earlier terminated pursuant to this Agreement. Subject to the notice and cure provisions set forth in Section 5.1.2, the City shall have the right to terminate this Agreement as to the Property and the rights of E&B hereunder, in the event E&B defaults and fails to cure such default within the respective cure period. Subject to the notice and cure provisions set forth in Section 5.1.2, E&B shall have the right to terminate this Agreement and the rights of the City hereunder in the event the City defaults and fails to cure such default within the respective cure period. Upon the termination of this Agreement, neither party shall have any further right or obligation with respect to the Property hereunder except with respect to any obligation to have been performed prior to such termination or with respect to any default in the performance of the provisions of this Agreement which has occurred prior to such termination (other than commencement of construction of either phase) or with respect to any obligations which are specifically set forth as surviving this Agreement. Termination of this Agreement pursuant to this Section 5.2 shall cause the rights and benefits afforded by this Agreement to no longer be vested (subject to planning and zoning law) and as a result, the City shall no longer be limited from taking any action which may adversely affect the Property or the Project. 5.2.2 Termination by E&B Prior to Development. E&B is free, in its sole and subjective business judgment, not to proceed with development of the Project and, in such an event, to terminate this Agreement. The City acknowledges that such a right is consistent with 27 Development Agreement between City of Hermosa Beach and E&B Natural Resources the intent, purpose and understanding of the parties to this Agreement. In the event E&B decides not to proceed with development of the Project and to terminate this Agreement, E&B shall provide written notice to the City of that decision and of the final, irrevocable termination of this Agreement. Immediately upon the giving of such written notice to the City, the parties’ rights and obligations under this Agreement shall cease, except with respect to any obligations which are specifically set forth as surviving this Agreement. In the event of such written notice to the City terminating this Agreement, all Project Approvals (but not the Lease, Settlement Agreement and those included in the City’s General Plan and/or the Municipal Code), shall terminate and be extinguished. Termination by E&B shall not affect any of E&B’s obligations to pay assessments, liens or taxes incurred prior to the effective date of termination. 6 GENERAL PROVISIONS 6.1 Term. 6.1.1 Term. The Term of this Agreement shall commence upon the Commencement Date and shall be coterminous with the term of the Lease, unless terminated, modified or extended pursuant to the provisions of this Agreement or by the voters of the City. The Term of this Agreement shall be tolled during any period of time in which a Force Majeure Delay exists. 6.1.2 Additional Rights. Expiration or termination of this Agreement shall not affect any right vested under law independent of this Agreement. 6.2 Approval, Execution and Recordation Procedure. The following procedure shall govern approval of this Agreement: (a) The voters shall have approved Ballot Measure __ approving this Agreement; (b) Following voter approval, the Hermosa Beach City Council shall declare the vote in accordance with Elections Code Section 9217 and execute the Development Agreement; (c) As provided in Section 65868.5 of the Development Agreement 28 Development Agreement between City of Hermosa Beach and E&B Natural Resources Act, following execution by the City, the City shall cause a copy of this Agreement to be recorded with the County Recorder within ten (10) days. Any recording costs shall be paid by E&B; and (d) Following execution and recordation, the Coastal Commission shall have approved this Agreement (which shall include any revisions to this Agreement authorized by Section 10.F of the Ballot Measure Ordinance); 6.3 Cooperation and Implementation. City represents that it will cooperate with E&B to the extent reasonable and feasible to implement this Agreement. Upon satisfactory completion by E&B of all of its preliminary actions and payments of appropriate fees, City shall commence and proceed with reasonable diligence to complete all steps necessary for the implementation of this Agreement and the development of the Property in accordance with the terms of this Agreement, including, but not limited to, the processing and checking of any and all Project Approvals, agreements, covenants and related matters required under the conditions of this Agreement, building plans and specifications, and any other plans necessary for the development of the Property, requests for inspections and certificates of occupancy, filed by or on behalf of E&B. E&B shall, in a timely manner, provide City with all documents, plans and other information necessary for the City to carry out its obligations hereunder, and pay for all necessary fees, costs, and expenses incurred by the City to facilitate implementation of this agreement that are not identified as the City’s responsibility. 6.4 Legal Challenges. 6.4.1 Defense. If any legal action or other proceeding is instituted by a third party or parties, other governmental entity or official challenging the validity of any provision of the Project Approvals, of the EIR or of this Development Agreement, E&B and the City shall cooperate in defending any such action. The City shall notify E&B of any such legal action against City within ten (10) days after the City receives service of process, except for any petition for a Temporary Restraining Order, in which case the City shall notify E&B immediately upon receipt of notice thereof. 6.4.2 Continued Processing. The filing of any lawsuit(s) by a third party (not a party to this Agreement) after the Approval Date against the City and/or E&B relating to this 29 Development Agreement between City of Hermosa Beach and E&B Natural Resources Agreement or to other development issues affecting the Project shall not delay or stop the processing or issuance of any permit or authorization necessary for development of the Project, unless required by court order. 6.5 Indemnity. 6.5.1 E&B Indemnity. To the fullest extent permitted by law, and notwithstanding the indemnification provisions set forth in the Lease and notwithstanding the limits of the insurance policies required herein, E&B hereby agrees, at its sole cost and expense, to defend, protect, indemnify, and hold harmless the City and its elected officials, officers, attorneys, agents, employees, consultants, volunteers, successors, and assigns (collectively "Indemnitees") from and against any and all third party damages, costs, expenses, liabilities, claims, demands, causes of action, proceedings, expenses, judgments, penalties, liens, and losses of any nature whatsoever, including reasonable fees of accountants, attorneys, engineers, consultants or other professionals and all costs associated therewith, arising or claimed to arise, directly or indirectly, out of, in connection with, resulting from, or related to any act, failure to act, error, or omission of E&B or any of its officers, agents, servants, lessees, employees, contractors, subcontractors, materialmen, suppliers or their officers, agents, servants, lessees, or employees, or arising or claimed to arise, directly or indirectly, out of, in connection with, resulting from, or related to this Agreement or Project Approvals, or any approval subsequently granted by the City for the development of the Property, any construction permitted pursuant to this Agreement or Project Approvals, or any subsequent use of the Property, or any portion thereof, permitted by this Agreement or Project Approvals except for any actions resulting from the gross negligence or intentional acts of an Indemnitee. The City may elect to participate in the litigation, in which case E&B agrees to reimburse the City for its litigation costs and fees, including the retention of outside counsel to be selected by the City at the City’s sole discretion. Neither party shall settle any such lawsuit without the consent of the other party. 6.5.2 Survival of Indemnity. The indemnity provisions contained in Sections 6.4 and 6.5 shall survive the termination of the Agreement and are in addition to any other rights or remedies which Indemnitees may have under the law. Payment is not required as a condition precedent to an Indemnitee's right to recover under these indemnity provisions, and an entry of judgment against an Indemnitee shall be conclusive in favor of the Indemnitee's right to recover under these indemnity provisions. E&B shall pay Indemnitees for any reasonable attorneys’ fees 30 Development Agreement between City of Hermosa Beach and E&B Natural Resources and costs incurred in enforcing these indemnification provisions. 6.6 Notices. All notices or other communications required hereunder shall be in writing and shall be personally delivered (including by means of professional messenger service), or sent by registered or certified mail, postage prepaid, return receipt required, or by electronic mail (provided the email transmission is followed by delivery of a "hard" copy), and shall be deemed received on the date of receipt personally, by registered or certified mail or by facsimile. Unless otherwise indicated in writing, such notice shall be sent addressed as follows: If to the City: City Manager City of Hermosa Beach 1315 Valley Drive Hermosa Beach, CA 90254 With a copy to: Michael Jenkins, Esq. Jenkins & Hogin 1230 Rosecrans Avenue, Suite 110 Manhattan Beach, CA 90266 Telephone: (310) 643-8448 Fax: (310) 643-8441 If to E&B: E & B Natural Resources Management Corporation 1600 Norris Road Bakersfield, CA 93308 31 Development Agreement between City of Hermosa Beach and E&B Natural Resources Telephone: (661) 679-1797 Fax: With a copy to: [name] Telephone: Fax: 6.7 No Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the parties to this Agreement and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. 6.8 Time of Essence. Time is of the essence for each provision of this Agreement of which time is an element. 6.9 Modification, Amendment or Extension. Subject to any notice and hearing requirements imposed by law, this Agreement may be modified, amended and/or extended from time to time by mutual written consent of the City Council and E&B as set forth in Government Code Sections 65867, 65867.5 and 65868 and as authorized by Section 11.G of the Ballot Measure Ordinance and Chapter 19.66 of the Municipal Code. 6.10 Conflicts of Law. In the event that state, regional or federal laws or regulations enacted after the Approval Date or the action or inaction of any other affected governmental jurisdiction prevent or preclude compliance with one or more provisions of this Agreement or require changes in plans, maps or permits approved by the City, the parties shall (a) provide the other party with written notice of such state, regional or federal restriction, provide a copy of such regulation or policy and a statement of conflict with the provisions of this Agreement, and (b) E&B and the City staff shall, within thirty (30) days, meet and confer in good faith in a reasonable attempt to modify this Agreement, but only to the 32 Development Agreement between City of Hermosa Beach and E&B Natural Resources minimum extent necessary to comply with such federal, regional or state law or regulation. Thereafter, regardless of whether the parties reach an agreement on the effect of such federal, regional or state law or regulation upon this Agreement, the matter shall be scheduled for hearings before the Council. Ten (10) days’ written notice of such hearing shall be given, pursuant to Government Code Sections 65090 and 65867. The Council, at such hearing, shall determine the exact modification or suspension which shall be necessitated by such federal, regional or state law or regulation. E&B, at the hearing, shall have the right to offer oral and written testimony. Any modification or suspension shall be taken by the affirmative vote of not less than a majority of the authorized voting members of the Council. Any suspension or modification may be subject to judicial review. The City shall cooperate with E&B in the securing of any permits which may be required as a result of such modifications or suspensions, subject to the payment of costs by E&B as set forth in Condition A-3 of Exhibit D-2 (and any other reimbursement authorized under this agreement), and the indemnity provisions in Section 6.5 of this agreement. If E&B and the City do not agree on the modification or suspension, either party may elect to terminate this Agreement pursuant to the provisions of Section 5.2 of this Agreement. 6.11 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought and referring expressly to this Section. No waiver of any right or remedy in respect of any occurrence or event shall be deemed a waiver of any right or remedy in respect of any other occurrence or event 6.12 Successors and Assigns. Except as expressly provided to the contrary in this Agreement, the burdens and obligations of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, all successors in interest to the parties to this Agreement and all successors in interest to the Property or any portion thereof or any interest therein, and shall be covenants running with the land. 6.13 Governing State Law. This Agreement shall be construed in accordance with the laws of the State of California. 6.14 Constructive Notice and Acceptance. Every person who now or hereafter owns or acquires any right, title or interest in or to any portion of the Property is and shall be conclusively 33 Development Agreement between City of Hermosa Beach and E&B Natural Resources deemed to have consented and agreed to every provision contained herein, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Property. 6.15 Statement of Compliance. Within thirty (30) days following any written request, in accordance with the notice provisions of this Agreement, which either party may make from time to time, and upon payment of a fee to the City to reimburse the City for its reasonable expenses associated herewith, the other party shall execute and deliver to the requesting party a statement certifying that: (a) this Agreement is unmodified and in full force and effect or, if there have been modifications hereto, that this Agreement is in full force and effect, as modified, and stating the date and nature of such modifications; (b) that this Agreement is in full force and there are no current uncured defaults under this Agreement or specifying the dates and nature of any such defaults, and manner of cure; (c) any other information reasonably requested. The failure to deliver such statement within such time shall be conclusive upon the party which fails to deliver such statement that this Agreement is in full force and effect without modification except as may be represented by the requesting party and that there are no uncured defaults in the performance of the requesting party. Said statement(s) shall be in the form reasonably satisfactory to the City, E&B and to any purchaser, lender, title company, governmental agency, or other person reasonably requesting such statement(s) in connection with sale, use, development, construction, financing or marketing of the Property. The City and E&B, for their own respective uses, shall also be entitled to obtain a statement of compliance at any reasonable time. 6.16 Insurance. 6.16.1 E&B shall obtain and continuously maintain throughout the term of this Agreement, insurance required by this Section 6.16, which shall also serve to satisfy the insurance requirements of section 18(b) and Exhibit C to the Lease. All insurance required to be carried by E&B shall be with companies rated A:X or better, in the then most recent edition of Best's Insurance Guide, and licensed to provide the relevant insurance in the State of California. E&B’s indemnification and defense obligations under this Agreement are not limited to the type or amount of insurance coverage that E&B is required to provide hereunder. 34 Development Agreement between City of Hermosa Beach and E&B Natural Resources Certificates of Insurance required to be delivered by this Section 6.16 shall contain liability limits not less than those set forth in this Section 6.16. Commercial general liability and control of well insurance policies shall include the City and the California State Lands Commission and their elected and appointed officials, employees, agents, consultants and representatives as additional insureds. All endorsements or policy provisions adding insureds to required insurance policies shall contain no added limitations, conditions, restrictions or exceptions to coverage in addition to those that apply under the insurance policy generally. E&B shall deliver the required Certificates of Insurance and endorsements evidencing the insurance required by this Section 6.16 prior to the Commencement Date. Evidence for renewals of required policies shall be submitted to City not later than ten (10) business days prior to the expiration date of each insurance policy, or at such later date as E&B may request for City’s approval, but in no event later than one business day prior to the expiration date of such Insurance Policy. The general liability policy shall be endorsed to state that coverage cannot be canceled, voided, suspended, adversely modified, or reduced in coverage or in limits (including for non- payment of premium) except after thirty (30) days’ prior notice (or ten (10) days in the case of cancellation for non-payment of premium) has been given to City; provided that E&B may obtain as comparable an endorsement as possible, so long as such endorsement does not include any limitation of liability of the insurer for failure to provide such notice. E&B shall give the City an unqualified thirty (30) day notice of cancellation, non-renewal or material amendment thereof. In the event that an insurer providing any of the insurance policies becomes the subject of bankruptcy proceedings, becomes insolvent, or is the subject of an order or directive limiting its business activities given by any regulatory authority, including the State Department of Insurance, E&B shall exercise best efforts to promptly, and at its sole cost and expense, secure alternative coverage in compliance with the insurance requirements contained in this Section 6.16 so as to avoid any lapse in insurance coverage. Each insurance policy required herein shall provide that the coverage is primary and noncontributory coverage with respect to all insureds, except for coverage that by its nature 35 Development Agreement between City of Hermosa Beach and E&B Natural Resources cannot be written as primary. Any insurance or self-insurance beyond that specified in this Agreement that is maintained by the City or the California State Lands Commission shall be excess of such insurance and shall not contribute with it. Each insurance policy shall be written or endorsed so that (i) no acts or omissions of an insured shall impair or otherwise affect coverage of the other insureds and (ii) insurance shall apply separately to each insured against whom a claim is made or suit is brought, except with respect to the limits of the insurer’s liability. All insurance coverage maintained or procured pursuant to this Agreement shall be endorsed to delete the subrogation condition as to City, or shall specifically allow E&B or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. E&B waives all rights of recovery against City, California State Lands Commission, and their elected and appointed officials, employees, agents, consultants and representatives. E&B acknowledges and agrees that any actual or alleged failure on the part of City to inform E&B of non-compliance with any requirement imposes no additional obligations on City nor does it waive any rights hereunder. In the event any insurance (including the limits that are required to be obtained and maintained by E&B pursuant to this Section 6.16 and/or naming the City as an additional insured), other than insurance required to be obtained and maintained by applicable law, shall not be available and commercially feasible to obtain and maintain in the commercial insurance market, E&B shall provide written notice of that occurrence to the City. Said written notice shall be accompanied by a written report prepared by an independent insurance advisor of recognized national standing and reasonably acceptable to City, certifying that such insurance is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, or in the case where any required insurance amount is not so available, certifying as to the maximum amount that is so available, and in each case explaining in detail the basis for such conclusions. 36 Development Agreement between City of Hermosa Beach and E&B Natural Resources Should commercial unavailability or commercial infeasibility occur, E&B shall have the right to self-insure a portion of the risk in order to obtain additional policy limits and/or coverage (i.e., “excess” insurance), as long as the financial capability of E&B to retain a portion of the risk is sufficient to obtain limits of coverage that would be equivalent to that required by this Section 6.16. Should E&B be unable to satisfy this requirement for financial capability in order to self- insure a portion of the risk, E&B and the City shall negotiate in good faith and attempt to agree upon alternative adequate means of financial assurance to substitute for the insurance or the portion of the insurance that is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, taking into consideration the type and amount of insurance which has become unavailable and the potential magnitude of any loss not covered by insurance. Other than as provided in the preceding paragraph, no self-insured retentions are permitted with respect to any risk or occurrence required by this Agreement to be covered by insurance without the prior, written consent of City, exercised in its sole discretion. Subject to City’s written approval, E&B may self-insure a portion of the risk and/or provide other alternative adequate means of financial assurance to the City only for so long as and to the extent that any insurance required by this Section 6.16 is not then reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. Said differently, E&B will again be required to obtain and maintain all of the insurance required by this Section 6.16 once the same is reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. E&B agrees to test the commercial insurance market through its insurance broker to confirm unavailability or commercial infeasibility of a required coverage no less often than quarterly during any period of commercial unavailability or commercial unfeasibility for any particular coverage. 6.16.2 Required Insurance. Subject to the provisions of Section 6.16.1, E&B shall procure, pay for and keep in full force and effect during the term of this Agreement each and all of the following insurance policies. 6.1.2.1 Commercial General Liability Insurance. Commercial General Liability, including: 37 Development Agreement between City of Hermosa Beach and E&B Natural Resources Bodily Injury; Property Damage; Personal Injury; Blanket Contractual Liability, or equivalent; Broad Form Property Damage; Premises and Operations; Fire Legal Liability; Sudden and Accidental Pollution Liability; Products and Completed Operations; Explosion, Collapse and Underground Hazard; and Advertising/Personal Injury Coverage, and pollution occurring from the same in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) in the aggregate. E&B shall provide the City with a copy of E&B's commercial general liability policy prior to the commencement of this Lease. 6.16.2.2 (Loss Of) Control Of Well And Pollution Liability Coverage. (Loss Of) Control of Well insurance and Operators Extra Expense Coverage with total of Forty Million Dollars ($40,000,000.00) limited liability for Sections 1A (Well Out Of Control Insurance), IB (Redrill/Extra Expense), and 1C (Seepage, Pollution, Cleanup and Contamination) and a total of Five Million Dollars ($5,000,000.00) limited liability for Section 2 (Care, Custody and Control) and coverage for bodily injury, property damage, including cleanup costs and defense costs resulting from a Well Out Of Control incident. Notwithstanding the foregoing, E&B shall be obligated to maintain the specified Control of Well coverages only during actual drilling of a well, which includes drilling, completing and/or testing of the well. E&B shall provide the City with a copy of E&B's Control of Well policy prior to commencing any actual drilling, along with the Certificate of Insurance, and such policy shall be maintained throughout the entire course of each actual drilling operation. 6.16.2.3 Worker's Compensation Insurance. Worker's Compensation insurance as required by law, together with Employer's Liability coverage with limits of not less than One Million Dollars ($1,000,000.00). Such coverage shall include a Waiver of Subrogation in favor of the City and an "alternate employer" endorsement. 6.16.2.4 Auto liability insurance (Symbol 1 – Any Auto) with limits of not less than One Million Dollars ($1,000,000.00) combined single limit. 6.16.2.5 Following Form Excess Or Umbrella Liability Insurance. Following Form Excess or Umbrella Liability insurance in an amount of not less than Twenty- Five Million Dollars 38 Development Agreement between City of Hermosa Beach and E&B Natural Resources ($25,000,000.00) per occurrence and aggregate per policy period to apply as excess coverage over coverage required by Subsections 6.16.2.1, 6.16.2.3 and 6.16.2.4. 6.16.2.6 Additional Insurance Required To Comply With Law. If the amounts of minimum insurance coverage as specified above in this Section 6.16.2 are insufficient or become insufficient to meet in any respect the minimum insurance coverage requirements set forth in or required by any applicable legal requirements of any governmental entity or regulatory body or agency by statute, case law, rules and/or regulations, then in such event E&B shall procure and maintain sufficient amounts of insurance coverage to satisfy any such minimum insurance coverage requirements in addition to the insurance required by Subsections 6.16.2.1, 6.16.2.2, 6.16.2.3, 6.16.2.4 and 6.16.2.5. 6.16.2.7 Review of Insurance Amounts During Term of Development Agreement. At each five-year anniversary of this Agreement, the parties will secure the advice of an independent insurance advisor of national standing to opine whether the insurance limits and requirements set forth in this Section 6.16 remain sufficient. The independent insurance advisor will consider the intervening changes in the consumer price index, industry standards, improvements in technology affecting the Project’s operations and any other relevant considerations. The parties will mutually agree to any modifications to the insurance requirements and limits as recommended by the advisor and as are prudent and commercially reasonable under the circumstances. Should the parties be unable to agree, they will mediate the matter before a neutral third party, each party to bear one-half the cost of the mediator. 6.16.3 Drilling or Other Contractors. Exhibit C to the Lease states: "Each drilling or other contractor performing work for the joint account shall be required to maintain in force, with respect to the work performed by such contractor, to the extent applicable and possible, the same insurance as specified above." E&B also agrees to require each contractor to include the City as an additional insured to any such insurance maintained by the contractor. 6.16.4 Requirements Not Limiting. The Parties acknowledge and agree that (i) requirements of specific coverage features or limits contained in this Section 6 are not intended 39 Development Agreement between City of Hermosa Beach and E&B Natural Resources as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance policy (ii) specific reference to a given coverage feature is not intended by to be all inclusive, or to the exclusion of other coverage, or a waiver of any type and (iii) all insurance coverage and limits provided by E&B, or by third parties pursuant to obligations of E&B hereunder, and, in each case, available or applicable to this Agreement are intended to apply to the full extent of the insurance policies, and nothing contained in this Agreement limits, or shall be deemed to limit, the application of such insurance coverage. 6.16.5 Remedies. Failure on the part of E&B to maintain the insurance as required hereunder shall constitute a material breach of this Agreement and the Lease, upon which the City may, after providing notice and an opportunity to cure as provided in Section 5.1.2 of this Agreement, if not timely cured by E&B, immediately terminate this Agreement and the Lease or suspend this Agreement and the Lease until E&B remedies the failure to maintain insurance. 6.17 Mortgagee Protection. The parties hereto agree that this Agreement shall not prevent or limit the right of E&B at its sole discretion, to encumber its leasehold interest in the Property or any portion thereof or any improvement thereon by any mortgage or other security device (collectively "Mortgage") securing financing of the purchase, development or operation of the Property or any portion thereof (including, without limitation, any combination of purchase financing, construction financing, bridge loans, take-out and permanent financing), as provided in this Agreement; provided, however, that any such Mortgage shall be subordinate to the rights and obligations under this Agreement. The City acknowledges that prospective lenders providing such financing may request certain acknowledgements, estoppels, interpretations and/or modifications of this Agreement, and agrees upon request, from time to time, and upon payment of a fee to the City to reimburse the City for its reasonable expenses associated herewith, to meet with E&B and representatives of such lenders to discuss in good faith any such request for acknowledgements, estoppels, interpretations and/or modifications. The City shall not unreasonably withhold its consent to and/or execution of any such requested acknowledgements, estoppels, interpretations and/or modifications which the City determines is consistent with the intent and purposes of this Agreement and reasonably protects the interests of the City under this Agreement. 40 Development Agreement between City of Hermosa Beach and E&B Natural Resources If the City timely receives a request from a Mortgagee requesting a copy of any notice of default given to E&B under the terms of this Agreement, the City shall provide a copy of that notice to the Mortgagee within ten (10) days of sending the notice of default to E&B, as the case may be. The Mortgagee shall have the right, but not the obligation, to cure the default during the remaining cure period allowed such party under this Agreement. Any Mortgagee who comes into possession of E&B’s interests in the Property, or any part thereof, pursuant to foreclosure of the mortgage, shall take the Property, or part thereof, subject to the terms of this Agreement; in no event shall any such Mortgagee or its successors or assigns be entitled to a building permit or occupancy certificate until all fees and other obligations due by E&B under this Agreement have been performed and/or paid to the City, all defaults have been cured, and all otherwise applicable conditions to such permit or certificate have been satisfied. 6.18 Covenant of Good Faith and Fair Dealing. No party shall do anything which shall have the effect of harming or injuring the right of the other parties to receive the benefits of this Agreement. 6.19 Covenant of Cooperation. E&B and the City shall cooperate with and assist each other in the performance of the provisions of this Agreement, including assistance in obtaining permits for the development of the Property or the Project which may be required from public agencies other than the City, subject to the payment of costs by E&B as set forth in Condition A-3 of Exhibit D-2 (and any other reimbursement authorized under this Agreement), and the indemnity provisions in Section 6.5 of this Agreement. E&B reserves the right to challenge any ordinance, measure, moratorium or other limitation in a court of law if it becomes necessary to protect the development rights vested in the Property pursuant to this Agreement. 6.20 Justifiable Reliance. The City acknowledges that, in investing money and planning effort in and to the Project and all public improvements and dedication offers required hereunder, and in undertaking commencement of the Project, E&B will be doing so in reliance upon the City's covenants contained in this Agreement and upon the enforceability of this Agreement, and the City agrees that it will be reasonable and justifiable for E&B to so rely. 6.21 Project Is Private Undertaking. It is specifically understood and agreed to by and between the parties hereto that: (1) the subject development is a private development; (2) except for the 41 Development Agreement between City of Hermosa Beach and E&B Natural Resources obligations of the City described herein, if any, the City has no responsibilities for or duty to third parties concerning any public improvement until such time and only until such time that the City accepts the same pursuant to the provisions of this Agreement; (3) E&B shall have full power over and exclusive control of the development of the Project herein described subject only to the limitations and obligations of E&B under this Agreement and the Project Approvals; and (4) the contractual relationship between the City and E&B is such that E&B is not an agent of the City nor is City an agent of E&B. Notwithstanding the foregoing, nothing contained in this Agreement shall be deemed to waive or modify any otherwise applicable obligations the City, acting in its governmental capacity and not as a party to this Agreement, may have to E&B or any other party, under and in accordance with all applicable laws. 6.22 Further Actions and Instruments. The parties to this Agreement shall cooperate with and provide reasonable assistance to the other parties to the extent contemplated in the performance of all obligations under this Agreement and the satisfaction of the conditions of this Agreement. Upon the request of any party, the other parties shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement. 6.23 Section Headings. All Article and Section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement. 6.24 Enforced Delay (Force Majeure). (a) In addition to specific provisions of this Agreement, performance by any party hereunder, including making payments, shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes, walkouts, riots, floods, earthquakes, fires, casualties, acts of God, litigation not commenced by a Party to this Agreement claiming the enforced delay (including without limitation, third party legal challenges to the Project, the Project Approvals or the environmental clearance for the Project Approvals and the Project), unavailability of materials, unforeseeable events beyond the control of 42 Development Agreement between City of Hermosa Beach and E&B Natural Resources E&B, governmental restrictions including moratoria imposed or mandated by governmental entities (but only as to delays or defaults on the part of E&B), enactment of conflicting state or federal laws or regulations (but only if the party claiming delay complies at all times with the provisions of this Agreement pertaining to such conflicting laws), delays caused by the delay or failure by any entity other than the party claiming such delay to provide financing for or construction of needed public facilities or infrastructure as contemplated or required by this Agreement, delays due to the enforcement of environmental regulations, litigation brought by third parties, or similar bases for excused performance. Any period of enforced delay provided for in this Section shall run concurrently with any period of enforced delay under the Lease. E&B shall only be required to provide one notice claiming such extension for enforced delay under both this Agreement and the Lease. (b) An extension of time for any such cause including an extension of the Term (a "Force Majeure Delay") shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other parties within thirty (30) days of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Delay unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause, when and how such party obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within thirty (30) days after it obtains actual knowledge of the event. The time for performance due to a Force Majeure Delay will be extended for such period of time as the cause of such delay exists (whether or not it extends beyond the Term or the Extended Term) but in no event for longer than for such period of time. (c) Notwithstanding the first sentence of paragraph (b), above, the following shall apply: (i) E&B shall be entitled to a Force Majeure Delay for a period longer than the period of enforced delay if the City Council determines that such longer period is reasonably required; and (ii) E&B shall be entitled to a Force Majeure Delay notwithstanding the fact that E&B may not have given timely notice to the City, if the City Council determines that such Force Majeure Delay is reasonably required. 43 Development Agreement between City of Hermosa Beach and E&B Natural Resources (d) A Force Majeure Delay shall not include the existence of any adverse or difficult market or economic conditions. 6.25 Emergency Circumstances. (a) If, as the result of specific facts, events or circumstances, the City believes that a severe and immediate emergency threat to the health or safety of the City or its residents, meeting the requirements of subparagraph (b), below, requires the modification, suspension or termination of this Agreement, the City will, after reasonable notice to E&B (in light of all the circumstances), hold a hearing on such facts, events or circumstances, at which E&B shall have the right to address the City Council. The City shall have the right to modify, suspend or terminate this Agreement, in whole or in part, if, following such hearing, the City Council determines that such modification, suspension or termination is required in order to protect the health and safety of the City and its residents. (b) This Section 6.25 governs generally applicable emergencies in the area not specifically related to or caused by the Project. For purposes of this Section 6.25, an emergency must meet each of the following criteria: (i) it must be based on genuine health, safety and general welfare concerns (other than general growth management issues); (ii) it must arise out of a documented emergency situation, as declared by the President of the United States, Governor of California, or the Mayor or City Council of the City of Hermosa Beach; and (iii) based upon its terms or its effect as applied, it does not apply exclusively or primarily to the Property or the Project. To the extent possible, any such action by the City shall be taken in a manner so as to provide E&B with the rights and assurances provided under this Agreement. 6.26 Reporting Adverse Information. Within 15 days of receipt, E&B shall notify the City Manager and City Attorney of any lawsuits, formal claims, notices of violation or notifications of administrative or governmental agency investigations concerning alleged or actual violations of any law or permit condition arising from or relating to E&B’s oil and gas drilling or production operations within the state of California. Together with the notification required by this Paragraph 6.26, E&B shall provide City with two (2) copies (one to City Manager, one to City Attorney) of the document initiating such lawsuit, claim, notice of violation or notification of administrative or governmental agency investigation, if such documents are in E&B’s 44 Development Agreement between City of Hermosa Beach and E&B Natural Resources possession, custody or control; otherwise, copies of such documents shall be submitted to City within three (3) days of receipt by E&B. Any additional documents pertaining to the matter, including documents filed by E&B in response to any such lawsuit, claim, notice of violation or notification of administrative or governmental agency investigation, as well as the final decision, determination, agency or administrative action of findings, shall be submitted to City upon request. E&B’s routine correspondence to said agencies need not be routinely submitted to City, but shall be made available to City promptly upon City’s written request. 6.27 Severability. Invalidation of any of the provisions contained in this Agreement, or of the application thereof to any person, by judgment or court order, shall in no way affect any of the other provisions hereof or the application thereof to any other person or circumstance, and the same shall remain in full force and effect, unless enforcement of this Agreement, as so invalidated, would be unreasonable or inequitable under all the circumstances or would frustrate the purposes of this Agreement and/or the rights and obligations of the parties hereto. 6.28 Interpretation. The language in all parts of this Agreement shall in all cases be construed simply, as a whole and in accordance with its fair meaning and not strictly for or against any party. The parties hereto acknowledge and agree that this Agreement has been prepared jointly by the parties and has been the subject of arm's length and careful negotiation over a considerable period of time, that each party has independently reviewed this Agreement with legal counsel, and that each party has the requisite experience and sophistication to understand, interpret and agree to the particular language of the provisions hereof. Accordingly, in the event of an ambiguity in or dispute regarding the interpretation of this Agreement, this Agreement shall not be interpreted or construed against the party preparing it, and instead other rules of interpretation and construction shall be utilized. 6.29 Counterparts. This Agreement may be executed in duplicate counterpart originals, each of which is deemed to be an original and all of which when taken together shall constitute one and the same instrument. 6.30 Entire Agreement. This Agreement consists of __ pages and ______________ exhibits (designated __ through __), which constitute the entire understanding and agreement of the parties, and, with the exception of (1) the Lease; (2) the Settlement Agreement; (3) the Agreement to Implement the Settlement Agreement dated July 23, 2014; and (4) the Reimbursement 45 Development Agreement between City of Hermosa Beach and E&B Natural Resources Agreement dated May 17, 2012 shall supersede any prior agreements, discussions, commitments, representations or agreements, written or oral, between the parties hereto with respect to this Agreement. IN WITNESS WHEREOF, the parties have each executed this Agreement on the date first written above. CITY OF HERMOSA BEACH E&B NATURAL RESOURCES MANAGEMENT CORPORATION By:____________________________ By:___________________________________ Mayor President ATTEST: By: _____________________________ City Clerk APPROVED AS TO FORM: By: ____________________________ By: _________________________________ City Attorney Attorneys for E&B Natural Resources Management Corporation 46 Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-1” LEGAL DESCRIPTION 555 6TH STREET, HERMOSA BEACH, CALIFORNIA 90254 That portion of APN 4187-031-900 described as: That portion of Lot A lying south of a line commencing at the northeasterly corner of Lot 11, Block U, Tract 2002, as per Map recorded in Map Book 22, Pages 154 and 155, in the Office of the Recorder of the County of Los Angeles, and continuing along the easterly prolongation of the northerly line of said Lot 11, to the easterly line of Lot A; Lots 11 through 18, Block R, Tract 2002; Lots 11 through 18, Block U, Tract 2002; and the vacated portion of Bard Street adjoining said lots. Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-2” LEGAL DESCRIPTION 601 CYPRESS AVENUE , HERMOSA BEACH, CALIFORNIA 90254 APN 4187-030-037 Lots 11 Through 14, Block H, Tract 1686, M.B. 20- 188, City Of Hermosa Beach Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-3” LEGAL DESCRIPTION 636 CYPRESS AVENUE, HERMOSA BEACH, CALIFORNIA 90254 APN 4187-031-022 Lots 5 And Lot 6, Block I, Tract # 1686, M.B. 20- 188, City Of Hermosa Beach . Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “B” PROJECT DESCRIPTION (From Section 2.0 of FEIR) Revised with removal of City maintenance yard discussion The Proposed City Maintenance Yard Project described herein is a separate project that the City will undertake if the voters approve the Proposed Oil Project. This Development Agreement only applies to the Proposed Oil Project described below, and except for any obligations explicitly assigned to E&B herein and payments from E&B for the City Maintenance Yard Project, the Proposed City Maintenance Yard Project is not governed by this Agreement. To the extent feasible, references to the Proposed City Maintenance Yard have been removed from the Project Description. Project Description E&B Natural Resources Management Corporation (E&B), the Applicant, is proposing the E&B Oil Drilling & Development Project (Proposed Oil Project) on a 1.3-acre site located in the City of Hermosa Beach (City). The site for the Proposed Oil Project (Project Site), as shown in Figure 2.1, would be located at 555 6th Street, bounded on the east by Valley Drive and on the south by 6th Street, approximately seven blocks east of the beach and the Pacific Ocean. Oil and gas pipelines constructed and used by the Project would extend from the Project Site to one of four potential valve box locations for the oil line and to a Southern California Gas (SGE) metering station for the gas line. The Project Site is owned by the City and is currently used as the City (Public Works) Maintenance Yard. The Applicant has leased the Project Site from the City for the implementation of the Proposed Oil Project. The Proposed Project is composed of two parts: 1) the relocation of the City Maintenance Yard (called the Proposed City Maintenance Yard Project); and 2) the development of an oil and gas facility on the current City Maintenance Yard site (called the Proposed Oil Project). In order to clear the current City Maintenance Yard site (called the Project Site) for the construction of the Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Directional Drilling Drilling wells at multiple angles to better reach and produce oil and gas reserves. Directional drilling allows for multiple wells from the same drilling location. proposed oil and gas facility, the City Maintenance Yard would be temporarily relocated during Phase 1 of the Proposed Project. If it is determined that the production of oil and gas on the Project Site would be economically viable (Phase 2 of the Proposed Project), construction of the permanent City Maintenance Yard would be completed once Phase 3 of the Proposed Project begins. The permanent Proposed City Maintenance Yard Project has two options: a Parking Option, which would add a net 97 parking spaces with a below grade parking garage, and a No Added Parking Option, which would have the same amount of parking as is currently available. This Project Description reflects information contained in the Project Application submitted to the City of Hermosa Beach by the Applicant, along with supporting information provided in conjunction with the Project Application (E&B Natural Resources, Planning Application and Appendices, Volumes 1 – 3, November 14, 2012; Response to Planning Application Completeness Review, April 11, 2013; Response to Requested Clarifications, June 24, 2013; Quantitative Risk Analysis, July 3, 2013; Errata, July 22, 2013).1Information related to the relocation of the City Maintenance Yard and construction and operation of the Proposed City Maintenance Yard is derived from information provided by the City of Hermosa Beach Public Works Department. The description of the Proposed Project incorporates the essential elements of the Project as it is proposed, including all phases and major components as well as the locations of all proposed offsite activities (in addition to those occurring on the Project Site). More detailed information related to some aspects of the Proposed Project (including proposed operational parameters and design features) may be found within individual sections of the Final Environmental Impact Report (EIR), where considered relevant to the discussion of specific environmental issues and/or effects. In addition, a description of the environmental setting and current conditions related to the environmental issues is presented in the Environmental Setting subsection of the individual sections of the Final EIR. 1 Information submitted by the Project Applicant is available for public review at the City of Hermosa Beach Community Development Department. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources This section discusses the Project objectives, historical operations on the Proposed Project Sites, the four phases of the Proposed Oil Project, scheduling, vehicle trip and employee requirements, and necessary permitting associated with the Proposed Project. A number of technical drawings related to the Proposed Project design and layout are included in Appendix A to the Final EIR. 2.1 Project Overview The Applicant proposes the development of an onshore drilling and production facility site that would utilize directional drilling of 34 wells (30 oil wells, four wells for water disposal/injection) to access the oil and gas reserves in the tidelands (pursuant to a grant by the State of California to the City) and in an onshore area known as the uplands. Both of these areas are located within the Torrance Oil Field within the jurisdiction of the City. In addition, the Proposed Project would result in the installation of offsite underground pipelines for the transportation of the processed crude oil and gas from the Project Site to purchasers, extending through the Cities of Redondo Beach and Torrance. The Applicant proposes a laydown site for supply staging/storage within the basement level of the industrial building at 601 Cypress Avenue during the construction phases. The Applicant also proposes to construct a parking lot at 636 Cypress Avenue for use by some of its construction employees/contractors on weekdays and by the public at other times. The City Maintenance Yard is proposed to be relocated to a temporary facility to be established on the rear (westerly) portion of the City Hall site (1315 Valley Drive) prior to and during the initial phase of the Proposed Oil Project so that the maintenance operations could be moved when the existing City Maintenance Yard is demolished as part of Proposed Oil Project activities. The construction of the permanent City Maintenance Yard would be undertaken on the site now occupied by the Hermosa Self-Storage (552 11th Place) after the Applicant completes the testing phase of the Proposed Oil Project in Phase 2. As indicated below, the permanent City Maintenance Yard and the oil and gas facility on the Project Site would be constructed at the same time during Phase 3 of the Proposed Project. The timeframe from commencement of the Proposed Project until the permanent oil and gas facility would be operational is estimated to be approximately 3.25 years. The existing lease (Oil and Gas Lease No. 2) allowing drilling into the tidelands provides for a 35-year period. Table 2.1 summarizes events in the Proposed Project timeline. Specifics of each of the Proposed Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Project components are described in the following sections. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.1 Proposed Project Location Source: Project Application, Amendments and Appendices Hermosa Beach Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.1 Proposed Project Schedule Summary Phase Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Temporary City Yard Oil Project Phase 1 Oil Project Phase 2 Drill Test Permanent City Yard Oil Project Phase 3* Oil Project Phase 4* Drill Operate Continuously for 30+ years Re-drills Average 30 days/year, max 150 days/yr** Note: * If the test phase is determined to be successful, Phase 3 and 4 would occur. For construction only. Does not include permitting timeframe. ** These are the maximum proposed by the Applicant. The 150 days per year would occur once every 5 years. Most likely re-drill activity would be lower. 2.2 Proposed Project Objectives Pursuant to Section 15124(b) of the California Environmental Quality Act (CEQA) Guidelines, the description of the Proposed Project is to contain “a clearly written statement of objectives” that would aid the lead agency in developing a reasonable range of alternatives to evaluate in the EIR and would aid decision makers in preparing findings and, if necessary, a statement of overriding considerations. The City is the lead CEQA agency which prepared the EIR, considered the EIR for certification and is placing the Proposed Project on the ballot. Project approvals will be made by the electorate of the City of Hermosa Beach. As part of the Project Application, the Applicant provided its stated objectives for the Proposed Oil Project, which consist of the following: 1. Develop the Proposed Oil Project consistent with the 1993 Conditional Use Permit and the March 2, 2012 Settlement Agreement, with the utilization of directional drilling Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources techniques from the Project Site, which is the current City Maintenance Yard; 2. Maximize oil and gas production from the Torrance Oil Field within the City’s jurisdiction, thereby maximizing the economic benefits to the City; 3. Provide an oil and gas development project on the Project Site that utilizes the latest technology and operational advancements related to safety and production efficiency in order to provide a project that would be safe and would meet the applicable environmental requirements; 4. Conduct construction and drilling activities on the Project Site incorporating technological advancements, operational practices, and design features related to air quality, odors, noise, hazards, and water quality to minimize the potential impacts on the adjacent community and the environment; 5. Provide landscaping, hardscape, signage, lighting, and other design features to minimize the visual effects of the Proposed Oil Project on the adjacent community; and 6. Implement operational practices and incorporate design features to provide safe vehicular ingress and egress during temporary construction activities and the ongoing operation of the Proposed Oil Project. Pursuant to the March 2, 2012 Settlement Agreement between the City of Hermosa Beach, E&B, and Macpherson Oil Co., the City’s primary objective is to comply with the California Environmental Quality Act and place on the ballot a measure allowing the City of Hermosa Beach electorate to decide whether or not to approve the Applicant’s Proposed Oil Project and a Development Agreement to vest the Project so that, if approved, the Project cannot later be invalidated by a vote of the people. In the event that voters approve the Proposed Oil Project, the City would need to relocate the City Maintenance Yard. Under those conditions, the City's objectives for relocation of the City Maintenance Yard would be to: 1. Provide City Yard Maintenance facilities that support provision of high-quality City services in an integrated and cost-efficient manner; 2. Consolidate City facilities and functions for maximum efficiency and flexibility; 3. Minimize disruption of City functions during relocation of the City Maintenance Yard; 4. Ensure the relocated City Maintenance Yard is compatible with surrounding uses; and 5. Ensure there is no net loss of public and employee parking spaces as a result of both the Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Proposed Oil Project and the relocation of the City Maintenance Yard consistent with the Preferential Parking Program approved by the Coastal Commission. 2.3 Historical and Current Operations Oil drilling and production in the Los Angeles Basin has a long history. According to the California Division of Oil, Gas, and Geothermal Resources (DOGGR) database, almost 30,000 oil wells have been drilled in the Los Angeles Basin in the last 100 to 150 years. Figure 2.2 shows the location of these wells. The Proposed Oil Project would drill into the western edge of the Torrance Oil Field (see Figure 2.2). Most of the production from the Torrance Oil Field has been generated from wells drilled in the City of Torrance, with some drilling in the Cities of Redondo Beach and Hermosa Beach. There have been approximately 1,500 wells drilled in the Torrance Oil Field historically. Although the Project Site is relatively flat, it is underlain by windblown sand dunes that previously covered the region, resulting in uneven ground due to natural conditions. In the 1920s and 1930s, the northeastern portion of the Project Site had a large depression that was mined for sand. Around 1927, the City’s dump and refuse burner were located on the Project Site, and, by 1947, the depression was filled. The resulting former landfill is approximately 45 feet deep and is filled with glass, porcelain, and ceramic towards the bottom and soils containing miscellaneous metals, wires, glass, and other materials toward the top (i.e., closer to the ground surface). Between the depths of 3 feet and 25 feet below ground surface (bgs), the former landfill contains some soil with lead at concentrations above the Environmental Protection Agency (EPA) Region 9 Industrial Regional Screening levels. In addition, soils impacted with total petroleum hydrocarbons (TPH) were found at depths of 25 to 44 feet bgs within the central portion of the landfill. For a detailed discussion of the soil conditions on the Project Site, refer to Section 4.7, Geological Resources/Soils, of the Final EIR. Figure 2.2 Historical Wells Drilled in the Los Angeles Basin Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: DOGGR In 1930, an oil well (Stinnett Oil Well No. 1) was drilled in the western portion of the Project Site. The oil well was abandoned in 2005, consistent with the then-current standards of the DOGGR. During the mid-1940s, the first building was constructed on the Project Site for City maintenance uses, with the last building constructed in the 1980s. Since the 1990s, with the exception of the addition of trailers, storage containers, and sheds, the Project Site has generally remained unchanged. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The Project Site is currently developed as the City Maintenance Yard, and the Proposed Oil Project would require the relocation of the City Maintenance Yard. As indicated in Figure 2.3, existing development on the Project Site consists of three buildings, two trailers, storage containers, sheds, trash bins, a propane tank, concrete paving and asphalt, fencing, and masonry walls. In addition, within the boundaries of the Project Site, there is an asphalt parking area in the southern portion of the City Maintenance Yard that provides 15 parking spaces for employees (Monday through Thursday between the hours of 6:00 a.m. and 6:00 p.m.) and for the public after hours (6:00 p.m. to 6:00 a.m.) and on weekends and holidays. Existing site contamination from historical site uses is also shown in Figure 2.3. According to an Environmental Site Assessment prepared in 2012 (Brycon 2012), 10 of the 73 soil samples taken exceeded Regional Water Quality Control Board guidelines for total petroleum hydrocarbons, all within the mid range hydrocarbons (C13-C22). Volatile organic carbons were not present in any of the samples at concentrations above the EPA Region 9 Industrial Regional Screening Levels. Six of the samples exceeded the EPA Region 9 Industrial Regional Screening Levels for lead. In addition, a series of groundwater borings conducted in 2013 (Brycon 2013) found the presence of total petroleum hydrocarbons, lead, barium, and arsenic in the groundwater below the City Maintenance Yard that exceeded the Maximum Contaminant Levels (MCLs) established for drinking water by the Regional Water Quality Control Board. The immediately adjoining properties were sparsely developed into the 1940s, with a few residential units located to the northwest of the Project Site. Post 1940s, significant development occurred with industrial buildings being constructed to the south and west of the Project Site by 1953 and to the north of the Project Site by the 1960s. By 1960, the buildings to the west of the Project Site were identified as containing a building material warehouse, a boat repair shop, and a contractor’s storage yard. By 1960, the building to the south was being utilized as a planter mix manufacturing site. Since the 1960s, the various adjoining buildings have been utilized for multiple small businesses as industrial/commercial uses. To the east, from the late 1800s, there was a railroad right-of-way (ROW) that was utilized by the Santa Fe Railway. During the 1960s, the railroad ROW was converted to a greenbelt/park (Veterans Parkway - Hermosa Valley Greenbelt (Greenbelt)), followed by a Council initiative in 1987 directing the City of Hermosa Beach to acquire the Railroad ROW for public use as parkland and open space in perpetuity; the property is zoned Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources O-S-1 Restricted Open Space. Currently, other land uses adjacent to the Project Site (on the same block between 8th and 6thStreet and Cypress Avenue and Valley Drive) are commercial/industrial (Cypress Auto Body, A&B Heating, JB Plumbing, McGivern Surfboard Manufacturing, Buddhist Meditation Center, NUWORK, a recording studio and other various small commercial/industrial businesses), with some residential uses along 8th Street to the north. Adjacent blocks include residential uses located 150 feet to the north of the Project Site, 250 feet to the west and 180 feet to the east (east of the Greenbelt), with small commercial/industrial uses and the Beach Cities Self Storage facility located to the immediate south across 6th Street with its required parking lot abutting the southwest corner of the Project Site. Figure 2.4 shows the southern area of the City of Hermosa Beach along with land uses. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.3 Existing Site Conditions Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant Project Application, DOGGR well database, Phase 2 Environmental Site Assessments Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.4 Project Site and Area Land Uses (Zoning Map) Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: City of Hermosa Beach Zoning Map, November 2013 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 1 Site Preparation 6-7 Months 2.4 Proposed Oil Project Phases The Proposed Oil Project would occur in the following four phases: Phase 1: Site Preparation; Phase 2: Drilling and Testing; Phase 3: Final Design and Construction; and Phase 4: Development and Operations. Each phase is discussed in the following sections. The Applicant proposes a facility designed for a maximum capacity of 8,000 barrels per day (bpd) of crude oil and 2.5 million standard cubic feet per day (scfd) of produced gas at completion of the drilling stage of the Proposed Oil Project in Phase 4. The operational parameters of the Proposed Oil Project are summarized in Table 2.2. Prior to the initiation of the Proposed Oil Project, it would be required that plans be submitted by the Applicant to the City and other permitting authorities for review and approval. These would include coastal development permits, oil and gas well permits, demolition plans, grading plans, utility and electrical plans, cement/foundation plans, landscaping plans, street and ROW improvement/modification plans, and construction plans, amongst others. Figure 2.5 shows the Project Site along with the electrical and pipeline connections and the Cypress Avenue parking lot. 2.4.1 Phase 1 Site Preparation The purpose of Phase 1 would be to prepare the Project Site for drilling and testing as well as for the subsequent phases of the Proposed Oil Project. It is anticipated that Phase 1 would occur for approximately six months. Prior to Phase 1 activities, the temporary City Maintenance Yard would be installed. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.1.1 Phase 1 Construction Activities Phase 1 would consist of the following construction activities: Underground existing overhead utilities; Construction of modifications to intersection of 6th Street and Valley Drive; Relocation of City Maintenance Yard to the temporary site; Clearance of Project Site; Construction of retaining walls and rough grading; Installation of perimeter fencing; Construction of well cellar; Installation of offsite electrical conduit and onsite electrical equipment; Completion of onsite surface and entrance/exit; Installation of temporary landscaping; and Installation of 35-foot sound attenuation wall.(per Mitigation Measure NV-3a) Table 2.2 Proposed Oil Project Design Parameters Parameter Value Crude oil production Phase 2: Up to 800 bpd Phase 4: Up to 8,000 bpd Crude oil properties 18 API Natural gas production Phase 2: Up to 250,000 scfd Phase 4: Up to 2.5 million scfd Produced water disposal/injection Phase 2: Up to 1,600 bpd Phase 4: Up to 16,000 bpd Maximum number of wells Phase 2: 4 wells (3 production, 1 water disposal/injection) Phase 4: 34 total (30 production, 4 water disposal/injection) NGL production Up to 1 bpd mixed with crude oil Pipeline length and tie-in, gas Approx. 0.43 miles + 1.4 miles Pipeline length and tie-in, crude Approx. 3.55 miles Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Water use, during construction Approx. 2,000 gallons per day during grading and earthwork (potable) Approx. 10,000 gallons per day during pipeline installation (potable) Approx. 20,000 gallons per month during facility construction (potable) Water use, during drilling 130,000 gallons per well (reclaimed water) (Approx. 4,500 gallons per day) Water use, during operations and maintenance (Landscaping- Reclaimed Water) (Domestic-Potable Water) 1,300 gallons per day (1,000 gallons per day for landscaping) (300 gallons per day for domestic use) Electrical use, Phase 2 4.5 megawatts (including drill rig) Electrical use, Phase 3 0.3 megawatts Electrical use, Phase 4 7.0 megawatts (including drill rig) 3.0 megawatts during normal ongoing operations Onsite electrical generation of 1 MW Well workovers, annually 90 days/year Well re-drills (full sized drilling rig, peak annually Up to 5 per year, up to 30 re-drills for the life of the Project Notes:bpd = barrels per day; kW = kilowatts; scfd = standard cubic feet per day; NGL = natural gas liquids; API = American Petroleum Institute; estimated peak values and maximums shown Source: Project Application, Amendments and Appendices. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.5 Project Site and Pipeline/Electrical Connections Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: E&B Supplemental Application materials, January 2014 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Each of these activities is discussed in the following subsections. Figure 2.6 shows the proposed arrangement of the Project Site under Phase 1. Appendix A of the Final EIR provides the conceptual grading plan, site plan, elevations, and landscape concept plan for the Proposed Oil Project at the completion of Phase 1. The laydown area (equipment and supply storage/staging) for the Proposed Oil Project would be in the basement of the building located at 601 Cypress Street on the northwest corner of Cypress Street/6th Street (See Figure 2.3). Underground Existing Overhead Utilities There are currently overhead power lines and communication lines on poles that run overhead through the existing trees along Valley Drive. These existing lines would be removed along the Project frontage and relocated underground adjacent to the Project Site in a location determined by the utility companies and the City. Appendix A of the Final EIR provides drawings showing the general location where the utility lines would be placed underground. Construction of Modifications to Intersection of 6th Street and Valley Drive The Proposed Oil Project would include the construction of modifications to the intersection of 6th Street/Valley Drive to provide the necessary turning radius for Project-related trucks. Appendix A of the Final EIR provides drawings showing the conceptual design of the proposed intersection modifications. These modifications would result in: Removal of a portion of the landscaped area and entry driveway to the Beach Cities Self Storage facility; Redesign of the sidewalk on the southwest corner of the intersection; Relocation of the stop sign and striping for the northbound lanes on Valley Drive to address the redesign of the southwest corner; Removal of a utility pole and underground utilities on the southwest corner of the intersection; Removal of a utility pole and underground the utilities on 6th Street; and The removal of two on-street parking spaces on 6th Street. As a part of the intersection modifications, the stop sign and striping for the southbound lanes on Valley Drive would be relocated to improve the line of sight to and from the intersection with 6th Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Street. This modification would be made concurrently with the addition of the perimeter fencing on the Project Site (See Figure 2.6). In addition, the curb on the northwest corner along 6th Street adjacent to the Project Site would be temporarily provided as a rolled asphalt curb for Phases 1 and 2. The two on-street parking spaces removed from 6th Street would be provided as part of the Project’s overall parking replacement program discussed further below. Relocation of the City Maintenance Yard Prior to Phase 1, a temporary City Maintenance Yard would be built at the New City Maintenance Yard location to the rear of City Hall at 1315 Valley Drive. At this point, the maintenance operations would be moved into the temporary City Maintenance Yard. Clearance of the Project Site Prior to the initiation of the site clearance activities, temporary 24-foot sound attenuation walls (per Mitigation Measure NV-1a) would be erected at the Project Site to reduce noise impacts related to construction. These sound walls would be designed to be movable and would be relocated within the Project Site as needed to attenuate noise associated with Phase 1 demolition and construction activities. The temporary sound walls would be removed from the Project Site after the onsite construction activities in Phase 1 are completed. Following the relocation of the City Maintenance Yard , the Project Site would be cleared. The site clearance activities would include the removal of three existing buildings (one of which would be moved to the temporary site), two trailers, storage containers, sheds, trash bins, a propane tank, concrete paving and asphalt, fencing and masonry walls. In addition, the asphalt parking area to the west of the City Maintenance Yard would be removed, resulting in the removal of 15 parking spaces. The building located at 636 Cypress Avenue would also be demolished at this time to clear the parcel for the off-site temporary parking area. Prior to the demolition of both buildings, building materials would be assessed for asbestos content and presence of lead based paint, consistent with the requirements of the South Coast Air Quality Management District (SCAQMD). If asbestos containing materials or lead based paint are detected, the appropriate abatement process would be implemented. The building materials removed from the Project Site would be transported by truck to the recycling facility at Southern Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Water Injection Pumping produced water back down the well hole into the oil reservoir from which it was originally extracted. California Disposal in Santa Monica, the recycling facilities at Hanson Aggregates in Long Beach, or another certified facility for recycling or disposal. The Proposed Oil Project would include an overall parking replacement program that meets the intent of the City’s Preferential Parking Program and Coastal Development Permit requirements. Section 2.4.5 discusses the parking plan for the Proposed Oil Project. Three of the four existing mature trees along the frontage of the Project Site on Valley Drive would be retained to help screen construction activities. The Applicant has concluded that the fourth tree should be removed because it is in poor health, and it would limit access to the Project Site (See Figure 2.6). The three remaining trees would be trimmed to keep branches from hanging over onsite equipment and to help prevent trespassing. Construction of Retaining Walls and Rough Grading Once the Project Site is cleared, retaining walls would be constructed along the western boundary of the Project Site and set back 10 feet along the western portion of the southern property boundary (See Figure 2.6). Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.6 Proposed Oil Project Phase 1 Conceptual Site Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources [need to fix this image] Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Rough grading would occur to allow for: The construction of a well cellar for three test oil wells and a water disposal/injection well; Surface drainage towards a temporary retention basin, which would contain a 100-year flood event; A level area for the set up and movement of the drill rig; and The installation of temporary production equipment. It is anticipated that the rough grading would not require the import or export of fill material. Appendix A of the Final EIR provides the conceptual grading plan that indicates the retaining wall locations and rough grading at the completion of Phase 1. Installation of Perimeter Fencing Following the rough grading, the Project Site would be enclosed by a six-foot temporary perimeter chain link fence covered with green fabric. The fence would include secured gates for the entrance off Valley Drive and the exit to 6th Street. The Applicant proposes to include the appropriate signage consistent with the requirements of the City. Figure 2.6 shows the location of the fencing and gates at the completion of Phase 1, and Appendix A of the Final EIR shows an elevation of the fencing. Construction of Well Cellar A cement well cellar approximately 8 feet wide by 40 feet long by 12 feet deep would be constructed for three test wells and one water disposal/injection well to allow for the drilling of the wells in Phase 2. The well cellar would provide containment of any potential oil spillage during Phase 2. Figure 2.6 shows the location of the well cellar. Installation of Offsite Electrical Conduit and Onsite Electrical Equipment Electrical service for the Proposed Oil Project would be provided by Southern California Edison (SCE). The electrical conduit and onsite electrical equipment for all phases of the Proposed Oil Project would be installed in Phase 1. The electrical load during Phase 2 and Phase 3 would be 4.5 Megawatts (MW) and 0.3 MW, respectively. During Phase 4, the electrical load during Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources drilling would be 7.0 MW and during ongoing operations would be 3.0 MW. According to the Applicant, SCE has determined that the existing 16 kilovolt (kV) circuit running along 8th Street to the north of the Project Site has the necessary capacity to serve the Proposed Oil Project. To receive electrical service from SCE, the Proposed Oil Project would provide for the installation of an underground conduit for a linear distance of 280 feet under Valley Drive from 8th Street to the northeast corner of the Project Site (see Figure 2.6) Electrical equipment consisting of step down transformer(s), switchgear, and variable frequency drive units would be installed in the northeast corner of the Project Site designated as the New SCE Yard in Figure 2.6. The electricity would be used to provide power for well pumps, the temporary production equipment, the temporary construction trailer, safety system controls, onsite lighting, and the drill rig used in Phase 2 and Phase 4 (both drilling and re-drills). An uninterruptable power supply would be installed for critical systems such as the temporary production equipment safety systems and security lights. An emergency generator would be installed to provide power for the safe shutdown of the drilling operation in the event of a loss of power from SCE. Appendix A of the Final EIR provides the general location of the offsite underground conduit. Completion of Onsite Surface and Entrance/Exit The surface of the Project Site would be covered with crushed aggregate base material to serve as a dust inhibitor and driving surface. Temporary berms would be constructed around the areas where the drill rig and associated equipment would be set up and the temporary production equipment installed to provide secondary containment. In addition, a temporary berm would be provided around the well cellar to avoid surface flows from entering the well cellar. The existing driveway access from Valley Drive and 6th Street would be used. On both sides of the driveway on 6th Street, a rolled asphalt curb would be provided. Installation of Temporary Landscaping Landscaping would be provided along the eastern and southern perimeter of the Project Site to provide a visual buffer. The plant materials and irrigation would be consistent with the requirements of the City. The trees and other plant materials would be planted in a manner that Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources allows for their replanting as a part of the permanent landscaping provided in Phase 3. Reclaimed water supplied by West Basin Municipal Water District would be used for irrigation. The reclaimed water line serving the Greenbelt east of Valley Drive would be tapped and extended to the Project Site. Appendix A of the Final EIR includes a conceptual landscape plan and plant materials for the temporary landscaping provided at the completion of Phase 1. Installation of 32-Foot Sound Attenuation Wall Upon completion of the Phase I improvements, a 35-foot sound attenuation wall (per Mitigation Measure NV-3a) would be erected inside the chain link construction fence in order to attenuate noise generated during Phase 2 drilling and testing. The 35-foot sound wall would stay installed through the duration of Phase 2. 2.4.1.2 Phase 1 Site Preparation Detailed Schedule It is anticipated that Phase 1 would occur for a period of approximately six months as indicated in the schedule provided in Table 2.3. As required by the previous Conditional Use Permit and as proposed by the Applicant, the construction activities on the Project Site, including the operation of earthmoving equipment, would be conducted between the hours of 8:00 a.m. and 6:00 p.m. Monday through Friday (except holidays) and 9:00 a.m. and 5:00 p.m. on Saturdays. Offsite construction activities within the public ROW would occur between the hours of 8:00 a.m. and 3:00 p.m. Monday through Friday in the City of Hermosa Beach. Truck deliveries to the Project Site would be limited to the hours between 9:00 a.m. and 3:00 p.m. Monday through Friday, except in the case of an emergency and with the prior approval of the Director of Public Works. The Project-related truck trips would be limited to 18 round trips per day and limited to the designated truck routes. 2.4.1.3 Phase 1 Site Preparation Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 1 are provided in the detailed Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources listing in Appendix A of the Final EIR. Vehicle trips are summarized in Table 2.4. The Project- related personnel would utilize parking spaces in an offsite parking area provided consistent with the proposed parking plan described in detail in Appendix A. Table 2.3 Phase 1 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Construction of Temporary City Yard Underground overhead utilities 6thStreet & Valley intersection Relocation of Yard Remove buildings Remove other site structures Construct retaining walls Grade, well cellar, aggregate Construct chain link fence Construct well cellar Install electrical service Install landscaping Install 32-foot sound wall Note: relocation of Yard would only include moving of shop materials and equipment. The Temporary City Maintenance Yard would be construction prior to the start of Phase 1 and would take approximately 9 months. See section 2.5. 2.4.1.4 Phase 1 Truck Routes Truck trips would be required in order to deliver and remove construction-related materials and equipment to and from, respectively, the Project Site. Trucks would utilize roads designated as truck routes by the cities of Hermosa Beach, Redondo Beach, Manhattan Beach and Torrance. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Truck routes are shown in Figures 2.13 and 2.14. The routes identified by the Applicant as those utilized for all phases of the Project are as follows: Inbound Trucks 1. Inbound trucks from westbound Artesia Boulevard 2. Left on to southbound Pacific Coast Highway 3. Right on to westbound Pier Avenue 4. Left on southbound Valley Drive 5. Right into the Project driveway on Valley Drive Or 6. Inbound trucks from westbound 190th Street (which becomes Anita Street) 7. Right on northbound Pacific Coast Highway 8. Left on to westbound Pier Avenue 9. Left on to southbound Valley Drive 10. Right into the Project driveway on Valley Drive Outbound Trucks 11. Outbound trucks on to eastbound 6th Street 12. Right on to southbound Valley Drive 13. Left on to eastbound Herondo Street 14. Continue onto Anita Street, then 190th Street to the Interstate 405 (I-405)/ Crenshaw interchange Or 15. Outbound trucks on to eastbound 6th Street 16. Right on to southbound Valley Drive 17. Left on to eastbound Herondo Street Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 2 Drilling and Testing: Drilling for 3-4 Months Testing for 7-9 Months More 18. Left on to northbound Pacific Coast Highway 19. Right on to Artesia Boulevard. 2.4.2 Phase 2 Drilling and Testing The purpose of Phase 2 would be to conduct the drilling and testing of wells in order to determine the potential productivity and economic viability of the Proposed Oil Project. During this phase, up to three test wells and one water disposal/injection well (a total of four wells) would be drilled. These wells would be drilled utilizing directional drilling technology, which enables the wells to be drilled laterally for long distances, so that the bottom-hole locations may be located several thousand feet from the surface location of each wellhead on the Project Site (see Figure 2.7 and 2.8). 2.4.2.1 Phase 2 Site Geology and Drilling Objectives The Proposed Oil Project would utilize directional drilling techniques to access the crude oil and gas reserves in the tidelands (offshore) and uplands (onshore) in the portions of the Torrance Oil Field within the City’s jurisdiction. The Project Application states that "no hydraulic fracturing (or “fracking”) of wells will occur because the geologic zones for the Proposed Project are permeable and capable of yielding oil and gas without hydraulic fracture stimulation." Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.4 Phase 1 Vehicle Trip Summary Activity Trucks, Maximum RT/day* Autos/PU, Maximum RT/day Total, Maximum RT/day Underground overhead utilities 4 10 14 Construct 6th& Valley intersection 3 8 11 Remove buildings 10 8 18 Remove other existing site structures 15 6 21 Construct retaining walls 5 14 19 Grade, well cellar and aggregate 15 10 25 Construct chain link fence 1 4 5 Construct well cellar 4 8 12 Install electrical service 6 15 22 Install landscaping 1 2 3 Install 32-foot sound attenuation wall 3 12 14 Greatest number of trips in one day 18 (during week 9) 31 (during week 12) 43 (during week 10) Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum truck activity occurs during week 9 with the installation of electrical service and the removal of existing structures. Maximum auto activity occurs during week 12 with the installation of electrical service and construction of the retaining wall. Maximum activity trucks and autos combined occur during week 10. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for each week. Source: Project Application, Amendments and Appendices The approximate extent of the City’s jurisdiction within the Torrance Oil Field is provided in Figure 2.7. Figure 2.8 provides a typical well cross section illustrating how wells can reach the oil reserves, within the tidelands, from the Project Site. The Project Application states the primary target zones are the Upper Main, Lower Main, and Del Amo Zones with some production potential within the Schist Conglomerate. As shown in Figure 2.8, the Upper Main Zone is the uppermost part of the Puente Formation. The Project Application states that it is expected to be the shallowest oil productive zone in the City. Of the three known producing horizons in the Torrance Oil Field, the Upper Main Zone is the most prolific. The Upper Main Zone beneath the Hermosa Beach tidelands and uplands is expected to be 300 feet thick and composed of inter-bedded thin sands and shales. The shales are currently fractured and provide both fractured porosity and permeability. The fractures are Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources critical to the performance of the reservoir in the area due to the fine-grained and thin-bedded nature of the sands. The Lower Main Zone lies below the Upper Main Zone in the Puente Formation. The Project Application states that similar to the Upper Main Zone, the shales of the Lower Main Zone are currently fractured and important for oil production. However, the Lower Main Zone has fewer interbedded fine-grained sands and is over 500 feet thick. Figure 2.7 Proposed Oil Project Lease Areas (below) Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Project Application Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Final Environmental Impact Report 2-90 E&B Oil Drilling & Production Project Figure 2.8 Applicant Proposed Oil Project Lease Areas Cross Section Source: Project Application. Representative figure not to scale or reflective of the exact geology of the region. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The Del Amo Zone lies beneath the Lower Main Zone. It contains the least amount of thin- bedded sandstone in the Puente Formation. The Project Application states that similar to the other two zones, the shales of the Del Amo Zone are currently fractured and important for oil production. The Del Amo Zone varies the most in thickness and could be from 200 feet up to 700 feet thick. The Schist Conglomerate underlies the Del Amo Zone and is resting on metamorphic basement rock (Catalina Schist). The Schist Conglomerate could be as much as 400 feet thick and is composed of reworked fragments derived from erosion of the underlying Catalina Schist. The Project Application states that although it is unknown if the Schist Conglomerate is productive beneath the City, it is still a viable exploration target. The production test wells would target areas to the south-west, the north-west and the north areas of the lease (see Figure 2.7). The wells for the Proposed Oil Project would be at a true vertical depth of approximately 3,000 feet and a measured depth of approximately 9,000 feet. The actual well depth would vary depending on the area targeted. The Applicant indicates that the wellhead pressures anticipated during and immediately after drilling would be 0.0 pounds per square inch (psi) and that the wells are not anticipated to be free-flowing. DOGGR must review and approve an engineering study conforming to CCR Section 1724.6 and 1724.7 for operations. No Class II injection wells will be permitted prior to review and approval of the study. A Notice of Intent will need to be submitted for each proposed well. The Notice of Intent will be reviewed for accuracy and completeness and, if appropriate, a drilling permit issued. 2.4.2.2 Phase 2 Construction and Drilling Activities Phase 2 construction and drilling would consist of the following activities and improvements: Installation of Temporary Construction Trailer Delivery and Set Up of Drill Rig Installation of Temporary Production Equipment Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Drilling of Wells Testing and Operational Systems These activities are discussed in the following subsections. Phase 2 Installation of Temporary Construction Trailer A temporary construction trailer would be installed in the northeast portion of the Project Site (see Figure 2.9). In addition, the associated utilities, including potable water and sewer, would be extended from the existing lines currently located along 6th Street that serve the City Maintenance Yard. Water and sewer service would be provided by the California Water Service Company and the City, respectively. Electricity would be provided by Southern California Edison (SCE) as discussed above under Phase 1 construction activities. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.9 Proposed Conceptual Site Plan - Project Phase 2 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Automated Drilling Rig Ground Flare Phase 2 Delivery and Set Up of Drill Rig An electric drilling rig and its associated equipment would be brought to the Project Site on large trucks with trailers to be permitted by the City and the California Highway Patrol (CHP). The drilling rig would be an "automated drill rig" (ADR), which means that many of the drill rig procedures (loading pipe, etc,) would be done by mechanical means automatically. The approximately 87- foot high drill rig would be powered by electricity. A large crane with a 150-foot boom would be used to erect the drill rig. Support equipment for the drill rig would include pipe racks, mud and cutting system, pumps, hydraulic equipment, and an accumulator. In the event of a loss of power from SCE, a generator, which would be a non-road portable diesel-fuel generator certified by the California Air Resources Board (CARB), would provide power for the safe shutdown of the drilling operation. Phase 2 Installation of Temporary Production Equipment Temporary oil, water, and gas production equipment would be installed on the Project Site. This temporary equipment would include a well test station, an induced gas flotation/filter skid, a gas combustor (enclosed ground flare), fluid handling tanks, piping, vapor recovery unit, pumps, and vessels. The production equipment would be delivered by trucks to the Project Site. The temporary production equipment would be installed in the eastern portion of the Project Site within an area enclosed by a containment berm as shown in Figure 2.9. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Phase 2 of the Proposed Oil Project would be designed as a closed-loop system, with pressure relief valves venting to a flare and tanks venting to a vapor recovery system. The control system would be computerized and would monitor the closed-loop system, providing warnings, corrective actions, and shutdowns, if necessary. Corrective actions could be closing valves, sounding alarms, shutting down wells or other process related functions. In addition, according to the Applicant, redundancy would be built into the system to provide an extra level of protection, ensuring there would be a backup for each safety device. All safety devices would be tested on a regular basis as per applicable codes and standards. Operators would be onsite 24 hours per day, seven days per week, to monitor all aspects of the Proposed Oil Project’s production process. Phase 2 Drilling of Wells Once the drill rig and associated equipment set up is complete, up to three test wells would be drilled utilizing directional drilling technology. This would enable the wells to be drilled laterally for long distances so that the bottom-hole locations may be located horizontally several thousand feet from the surface location of the well head on the Project Site. All wells would be permitted, drilled and cemented in accordance with the State Division of Oil, Gas, and Geothermal Resources (DOGGR) regulations. Drilling would proceed in the following manner: Installation of conductor casing; Drilling of wells; Placement of casing and cementing of wells (in stages at various depths); and Completion of the well, including installation of down-hole pumps and tubing. Installation of Conductor Casing The conductor casing is the initial hole drilled into the ground with a large diameter pipe installed to maintain integrity. The subsequent drilling of the well would take place through the conductor casing. Conductor casing would be installed with a small drilling rig, referred to as a dry-hole digger, which would be used to set the conductor casing for all of the intended wells in the Project Site. A large diameter hole, about 18 inches in diameter, would be drilled to an approximately 80-foot depth. This type of drilling is similar to boring a hole with an auger. Usually, no drilling fluid is needed to drill the hole, hence the name dry-hole digger. A large Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources diameter casing, commonly referred to as “conductor pipe”, typically 13-3/8 inches in diameter, is lowered to the bottom of the hole and is cemented in place with construction concrete. This forms the first seal of the near-surface formations and also serves as a steel conduit to allow the drilling fluid used in the next stage of the well drilling to be circulated to the surface without washing away the shallow near-surface dirt. All conductors necessary to develop the Proposed Oil Project test phase would be set at this time and the dry-hole digger moved off before the drilling rig would be mobilized and brought to the Project Site. Drilling, Casing and Completion of Wells The components of the drill rig and all necessary equipment would then be moved onto the Project Site with large specially equipped trucks. The drill rig height would be 87 feet. The drilling setup would include three main parts; the drilling structure (i.e., mast, substructure, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources catwalk, silicon-controlled rectifier (SCR) house, top drive, back-up generator, crown block, traveling block, iron rough neck, drill pipe, control cabin), the blow out preventer (BOP) system (i.e., BOP Stack, Shear Ram, BOP Controller, and Accumulator), and the mud system (i.e., mud tanks, mud shakers, mud pumps, mud return line). The drilling rig would also require other equipment such as a spare parts house, other tanks, and storage areas as needed to support the drilling operation. The substructure of the drill rig would be located over the first well conductor casing, the mast would be raised, and the other equipment would be aligned and connected. The drill pipe would be laid out on racks convenient to the rig floor so they may be used when needed. Water tanks would be filled, and drilling fluid additives would be stored on site. The drill rig for the Proposed Oil Project would be run on electric utility power, so an electrical hookup would be made at this time. Drilling operations would then begin. The initial mobilization and rigging up operation is expected to last about seven to ten working days. “Spudding in” is the term used to begin drilling operations. A large (12 ¼-inch diameter) drill bit is attached to the first joint of drill pipe (usually 30 feet long) and lowered into the conductor casing. As the first length of pipe is completely lowered in, another length of pipe is attached to the end, thereby increasing the length of the drill “string”. When the drill string reaches the bottom of the conductor casing at a depth of 80 feet, the drilling begins. In order to drill downwards through soil and rock, the drill bit requires rotation and downward force, which is provided by the weight of thick-walled pipe on top of the drill bit. A single, 30-foot long drill pipe for a larger diameter drill bit weighs approximately three tons. As the drill bit drills deeper, more drill pipe is placed on top, thereby increasing the downward force; this is collectively known as the drill string. The drill bit turns clockwise as the weight of the drill pipe column forces it downward. Drilling fluid, called mud, is pumped down the inside of the hollow drill pipe, through a hole in the drill bit, and flushes the drilled rock cuttings away from the bit and up the space between the wall of the borehole and the outside of the drill pipe, which is referred to as the “annulus.” When the mud reaches the surface, it circulates to a mud tank where the rock cuttings are separated out of the fluid by using a shaker, and the clean mud is pumped back down the hole in a continuous circuit, constantly circulating the drilled rock cuttings up and away from the drill bit as it penetrates deeper into the earth. The cuttings are analyzed, stored in 20 cubic yard bins, and then hauled offsite. Initially, a large diameter bit is used to drill to a predetermined depth. When the specified depth Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources is reached, drilling is stopped, the drilling string is removed and a large diameter pipe (a casing string) is assembled in 40-foot lengths and lowered to the bottom of the well bore. Cement is then pumped down the inside of the casing, around the bottom of the hole, and up the annulus between the casing and the well bore. When the cement hardens, it ensures that the entire casing and well bore are encased in cement, protecting the fresh water aquifers and surrounding subsurface areas from the production fluids inside of the casing. See Figure 2.10 for a schematic of the well bore and casing. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.10 Typical Well Bore and Casing Source:Project Application Next, a piece of equipment known as a blowout preventer (BOP) is attached to the well head. The BOP is a safety system used during drilling operations in oil and gas fields to prevent the uncontrolled release of reservoir fluids and to immediately shut off the flow in the event that abnormal pressure is encountered in the well bore that cannot be controlled by the hydrostatic head of the drilling fluid when drilling resumes beneath the surface casing. Blow out prevention equipment shall conform to DOGGR’s publication M07 “Blowout Prevention in California, Equipment Selection and Testing 2006 edition. If the subsurface pressure begins to cause the well to flow, the BOP is activated, closing in the well and trapping the pressure until it can be bled off safely and drilling can continue. A BOP would be placed on each wellhead during the drilling and removed after the well is completed. A BOP utilizing Blind Shear Rams would be utilized. Blind Shear Rams are a type of BOP common in the offshore environment that allow for the shutting off of flow through the well even if drill pipe is in the wellbore. Pursuant to the requirements of the Code of Federal Regulation on Oil and Gas and Sulphur Operations in the Outer Continental Shelf(30 CFR part 250), the Applicant indicates that the BOP would be certified that the shear rams can actually shear the drill pipe prior to drilling. The surface casing serves three primary functions: Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources It isolates fresh water formations from contact with any fluids coming from deeper in the earth; It serves as a mounting place for the blowout preventer; and It serves as the support for the production casing that would be placed in the well if oil is found. Once the surface casing is cemented in, drilling operations resume with a smaller drill bit. This smaller hole is drilled to the total depth decided upon by the Applicant’s geologic and engineering staff. Usually, the only interruptions to drilling operations would be to remove the drill pipe (also known as tripping pipe) from the well to replace a dull drill bit, and then lowering the pipe back to the bottom of the well. In order to achieve the directional aspect of the drill hole, the well bore is bent. The act of “bending” a well out of the vertical axis typically begins after vertical drilling has progressed several hundred feet beneath the surface. Although the specifics of each well proposed for this Project have not been established, it is not uncommon to begin to deviate from vertical at a depth of about 600 feet and still reach a target formation located at a depth of 4,000 feet, but also almost 4,000 to 6,000 feet sideways from the surface spot location. This system would be used on virtually all of the wells drilled for the Proposed Oil Project. When the well reaches total depth (TD), drilling operations are halted and the drill pipe is removed from the well leaving mud in the hole to contain any potential production fluids located at the reservoir depth. A logging tool is then lowered into the hole to record petrophysical data of the formations through which the rig has drilled. If the well looks like it would produce oil, production casing is installed in a similar fashion to the installation of the surface casing. Production casing for the Proposed Oil Project is planned to be 7inches in diameter. Production casing would be cemented similarly to how the surface casing is cemented, as previously described. Once the cement has been allowed to fully harden, another electric logging tool, called a cement bond log, is lowered to the bottom of the well to evaluate the completeness and effectiveness of the cement on the outside of the production casing. If the cement is found to have defects, the casing can be perforated and cement forced into the well at a specific location or the casing can be removed and the well re-drilled. Devices are inserted to ensure any perforations are sealed. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The well is then “completed”, which is a series of activities that allow for the production fluids to flow into the well bore inside the casing and to the surface. Table 2.5 shows a list of chemicals that would be used during drilling operations. The amounts listed are the estimated quantities consumed per well drilled. These materials are packaged by the manufacturer for shipping and would be delivered to the job site by conventional delivery or flatbed trucks. Drilling each well would require approximately 130,000 gallons (or 0.4 acre-feet) of water. The water would be reclaimed water provided by the West Basin Municipal Water District from an existing reclaimed water line serving the Greenbelt east of Valley Drive. The West Basin Municipal Water District has provided the Applicant with a “will serve” letter. The drilling process requires the use of drilling mud to circulate drilled rock cuttings out of the well hole, retain the integrity of the well hole, and control reservoir pressure. The drilling mud would be collected onsite in Baker tanks (enclosed tanks that are approximately 12 feet tall by 40 feet long and hold up to 500 barrels each). Although most of the mud would be reused on subsequent wells, some mud would be removed from the Project Site and disposed of each day by truck at an approved disposal site at Anterra’s Oxnard Licensed Class 2 Disposal Facility or a similar facility. In addition, all other waste generated by the test drilling would be transported by truck to the appropriate disposal site at Clean Harbors Buttonwillow Landfill, or a similar facility if closer to the Project Site. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.5 Phase 2 Drilling Chemicals Common/Trade Name Use Container Amount per Well Gel Wyoming Bentonite Used to enhance mud viscosity 100-pound sack 525 sacks DMA Sodium Polyacrylate Water absorbent mud additive 50-pound sack 82 sacks Benex Anionic Acrylamide Mud additive 2-pound sack 75 sacks GEOZan Xanthan Gum Mud viscosifier 25-pound sack 40 sacks Omniopol Sodium Polyacrylate Liquid Water absorbent mud additive - 380 gallons CFR Fatty Acid Liquid Mud additive to enhance lubricity - 600 gallons Bicarb Sodium Bicarbonate Mud additive for pH control 50-pound sack 40 sacks Citric Acid Mud additive for pH control 50-pound sack 11 sacks Walnut Hulls Filter medium, used to reduce torque and drag of drill pipe and for plugging of fractures and high porosity formations 50-pound sack 48 sacks Cement Bulk-Truck Used for well sealing - 3 bulk trucks Biotreat 8415 Treatment of water before injection into the oil reservoir Hydrochloric Acid 15%, used for acid washing during completion Bin varies Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Hydrofluoric Acid 3%, used for acidizing muds Bin varies Source: Project Application, Amendments and Appendices The Proposed Oil Project would comply with the 1993 CUP conditions of approval, proposed operational practices, and proposed design features. The noise reduction methods would include the following: An electric drill rig would be utilized, reducing the need for diesel engines; The drill rig would have no draw works or cables resulting in less noise; A 35-foot-high acoustical barrier wall (per Mitigation Measure NV-3a) would be erected around the perimeter of the Project Site during all drilling activities. The wall would have a sound transmission class (STC) rating of at least 32; The air inlets and vents of the hydraulic power unit would be fitted with silencers; An acoustical shroud would enclose three sides of the rig mast to reduce the top drive noise (if applicable); The mud pumps would be enclosed with acoustical barriers having a sound transmission class (STC) rating of at least 25; An 8-foot high acoustical barrier with an STC rating of at least 25 would be installed around the shaker tables; Drilling Quiet Mode Plan would be implemented at the drill site between 7:00 p.m. and 8:00 a.m., a plan which would provide for the following: disablement of all audible mobile equipment and truck backup alarms; minimization of pipe handling; cessation of cementing operations, maintenance, and tripping pipe; and limits within the delivery schedule; and An automated and remotely managed system to connect/disconnect pipe (Iron Roughneck) would be used, which would reduce pipe handling; No processing of gas would occur during Phase 2. The gas separated from the oil and water would be directed to a gas combustor (enclosed ground flare), where disposal of it would occur through burning. The Applicant indicates that low levels of potential “native” hydrogen sulfide (H2S), in the order of 0.0 to 6.0 parts per million (ppm), may be encountered in the gas produced from the Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources underlying oil reservoir. Because the produced fluids may contain some H2S, fixed H2S detection systems would be installed around the drilling site and continuous monitoring would be present during all drilling, workover, and well servicing operations. Sensors would be located in areas that are frequently used by personnel, selected drilling area locations, areas where H2S may accumulate, and any other areas determined by hazard analysis to pose a potential risk. Personnel would also carry personal H2S monitors attached to their clothing for immediate H2S detection during drilling. Figures 2.12 and 2.13 provide an outline of the City’s designated truck route for construction trucks through the cities of Hermosa Beach, Redondo Beach and Torrance. Phase 2 Testing and Operational Systems After the completion of the first test well and the water disposal/injection well, the extracted oil would go through production and testing. The temporary production equipment on the Project Site would be used to process the production fluid. The oil would be processed to a standard that would be suitable for sale. The produced water would be processed and re-injected back into the oil-producing reservoir below the oil water contact. Disposal of the gas produced during Phase 2 would occur through burning in the enclosed ground gas flare. Figure 2.11 shows the steps involved in processing the oil, water, and gas produced from the test wells in Phase 2. Processing of Production Fluids During Phase 2, the Proposed Oil Project is designed to handle up to 800 barrels of oil per day and up to 250,000 standard cubic feet of gas per day. After the oil is processed, it would be trucked from the Project Site to an offsite oil receiving facility at 2650 Lomita Boulevard in Torrance. The route used for crude haul trucks is detailed in Appendix A of the Final EIR. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.11 Phase 2 Process Flow Diagram Source: Applicant application The produced fluids would be sent from the wells to a three-phase separator, which would separate the fluid into gas, oil and water streams. The gas exits the top of the separator, the oil exits the middle, and the water exits the bottom of the separator. Each one of these fluids enters a specific system of treatment as follows. Oil Treatment System The produced oil would enter a series of stock tanks after leaving the three-phase separator. The stock tanks would be used if the oil needs to be further processed to remove excess water. The water removed from the oil and water mixture would be sent back to the three-phase separator through a drain system. Once the oil is processed to a standard suitable for sale, the oil from the stock tank would be loaded into a tanker truck and transported to the purchaser. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Gas Treatment System The produced gas would be sent directly to a compressor and then to the gas flare for combustion after leaving the three-phase separator. A vapor recovery system attached to the temporary Baker tanks would be utilized to capture vapors and to direct them to a vapor recovery compressor and to the gas system and flare. The vapor recovery, tank and flare system would be subject to Southern California Air Quality Management District (SCAQMD) permit requirements. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.12 Truck Routes from Highway 405 to Project Site Source:Project Application, Amendments and Appendices Figure 2.13 Truck Routes to Highway 405from theProject Site Source:Project Application, Amendments and Appendices The Proposed Project provides for the disposal of treated stormwater runoff and produced water from the drilling and production process back into the oil reservoir using water disposal/injection Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources wells. The injection of untreated water can result in the creation of H2S concentrations in the oil reservoir above preexisting levels (referred to as the “native” condition). Prior to the injection of produced water from the oil extraction process, or the injection of surface runoff from precipitation that collects on the Project Site, the water would be treated by a biocide to eliminate sulfate-reducing bacteria (SRB). Once wells begin production, the extracted water would be tested for SRBs to determine if treatment is needed. In addition, the surface runoff water and any other injected water, would be tested. SRBs are an assemblage of specialized bacteria that thrive in the absence of oxygen and obtain energy for growth by oxidation of organic nutrients, with sulfate being reduced to hydrogen sulfide (H2S). SRBs are treated by the use of a biocide and this treatment could be a batch or continuous treatment. There are numerous antibacterial agents available on the market that could be used for this specific treatment if it is determined to be needed. Facility Storm Drain System The Proposed Oil Project Site is designed to retain, process, and inject storm water within the perimeter fence or wall for a 100-year storm event. All rainwater falling on the site would be collected and pumped into the water processing system for disposal/injection into the oil reservoir. In addition, any spills on the site would also be contained, both within process system walls/berms around equipment and site walls/berms around the site. Process walls/berms would be designed to contain at least 110 percent of the largest vessel plus the precipitation generated by a 100-year storm event. Safety Systems Operators would be onsite 24 hours per day, seven days per week, to monitor the Proposed Oil Project’s production process during Phase 2. A fire protection system as required by Federal, State, and local codes, ordinances and regulations would be installed by the Applicant prior to the drilling and testing activities on the Project Site. The Fire Protection Plan for Phase 2 of the Proposed Oil Project would be provided to the City of Hermosa Beach Fire Department for review and approval prior to the initiation of Phase 2. The design and operation of the Proposed Oil Project would be required to meet provisions Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources within the California Fire Code (CFC) and standards of the National Fire Protection Association (NFPA), including the requirements for the storage of hazardous materials, the installation and use of fire protection systems and devices, and the implementation of safety measures for employees and emergency responders. Onsite personnel and a site security program, including a closed circuit television system, a gate access system, and an intrusion and motion detection system, would control all access to and from the Project Site during Phase 2. In addition, temporary lighting would be provided. The lighting would be shielded/hooded and directed downward, as is consistent with City requirements. All tanks would have containment equal or greater in capacity than at least 110 percent of the largest vessel plus the precipitation generated by a 100-year storm event. Water Treatment System The produced water would be pumped into a treatment system, including a gas flotation unit and a filter unit, to remove excess oil after leaving the three-phase separator. The primary objective of both units would be to clean the water of oil and solids such as sand. The water would then enter a water surge tank after leaving the filter unit and would be sent to the water disposal/injection pumps for disposal/injection into the oil-producing reservoir through the disposal/injection well. If determined to be needed, before it enters the water surge tank, the water would be injected with a biocide to eliminate any bacteria that may be in the produced water. Electrical Requirements Approximately 75 kilo-watt hours of electricity would be required to drill each well. Chemicals Project operations would require the use of chemicals. These chemicals would be documented in a required Hazardous Materials Business Plan. Typical chemicals utilized in the temporary production facility are shown in Table 2.6. Table 2.6 Phase 2 Testing Chemicals Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Common/Trade Name Use Maximum Quantity (Gallons) Emulsion Breaker/Phasetreat 6378 Help separate oil and water 60 Water Clarifier/Floctreat 7991 Water additive 40 Emulsion Breaker/Waxtreat 3610 Help separate oil and wax 50 Corrosion Inhibiter/Cor 7182 Additive to reduce corrosion 400 Surface Cleaner/4U General purpose cleaner 165 Scale Dissolver/Techni Solve 1780 General purpose scale remover 55 Scale Inhibitor/Techni Hib 7621 Additive to reduce scaling 120 Source: Project Application, Amendments and Appendices Noise Abatement The Proposed Project would be implemented in compliance with the 1993 Conditional Use Permit conditions of approval. In addition, the applicant proposes to incorporate several operational practices and design features intended to abate noise. The conditions of approval, operational practices and design features that would be incorporated into the production operations include the following: Heavy/large reciprocating equipment would be mounted on vibration isolators; Pipe tripping would be restricted to daylight hours only; Loudspeaker paging systems would be prohibited; Well workover rigs or any other workover-type rig (not the main drilling rig) that is used would be operated only between 8:00 am and 6:00 pm during daytime weekday hours only, excluding holidays, except in an emergency as defined in the Conditional Use Permit (CUP) and reported to the City in accordance with the notification requirement. The exhaust and intake of the diesel engine (if used on the workover rig) would be muffled to reduce noise to an acceptable limit. The operator would use whatever means necessary, including, but not limited to, enclosing the diesel engine and rig in acoustic blankets or housing; Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources All oil maintenance equipment, vehicles and non-electrical motors would be equipped with manufacturer approved mufflers or housed in a sound-proofing device; Noise monitoring would be conducted under the supervision of an independent certified acoustical engineer; Each well pump would produce a sound power level no greater than 83 dBA. This may be achieved by fitting sound attenuating enclosures that provide an insertion loss of at least 15 dB; The produced oil pumps, produced water pumps, water booster pumps and variable frequency drive electrical (VFD) cabinets would produce a sound power level no greater than 77 dBA; The water injection pumps would produce a sound power level no greater than 83 dBA. The vapor recovery compressors would produce a sound power level no greater than 83 dBA; and The cooler for the compressors would produce a sound power level no greater than 85 dBA. Decision not to Proceed -Abandonment If it is determined that the production of oil and gas on the Project Site would not be economically viable, the Applicant would remove the sound attenuation walls, the temporary production equipment, and the temporary construction trailer and abandon the three test wells and the water disposal/injection well in accordance with the requirements of DOGGR. The Project Site would be left as a graded site with site improvements including the retaining walls, the perimeter chain link fence, and the perimeter landscaping. As the temporary City Maintenance Yard would already be constructed under the Proposed Project, the current City Maintenance Yard Site would be empty and would be available for development within the M-1 Light Manufacturing zoned area of Hermosa Beach. The Project Site would then be available for City or other development proposals, or for the temporary City Maintenance Yard to be relocated back to this site. However, any future use would need to be consistent with the lease agreement with the Applicant. Current site contamination would remain as part of the abandonment process and would be removed in accordance with the requirements of any future site use. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.2.3 Phase 2 Drilling and Testing Schedule It is anticipated that Phase 2 would occur for approximately 12 months as indicated in the schedule provided in Table 2.7. The drill rig would operate continuously for 24 hours per day, seven days per week, until the appropriate depth and bottom-hole location for each well has been reached. It is estimated it would take 120 days for drilling activities, 24 hours a day, which is approximately 30 days per well for four wells. After the drilling of the three oil wells and one water disposal/injection well is complete, the drill rig would be removed from the Project Site. As each well is drilled, the produced fluids from that well would go thorough production and testing, as described above. 2.4.2.4 Phase 2 Drilling and Testing Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 2 are provided in detail in Appendix A of the Final EIR. A summary of the vehicle trips is shown in Table 2.8. Parking for the employees would be provided in an adjacent parking area as previously discussed for Phase 1. Since Phase 1 prepares the Project Site for Phase 2, the conceptual landscape plan and elevations provided above for Phase 1 would also be applicable to Phase 2. Table 2.7 Phase 2 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 thru 54 Install trailer and associated utilities Deliver and set up drill rig/equipment Install oil, water, and gas equipment Drill 3 test wells and water well Testing of wells Remove drill rig and equipment Source: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.8 Phase 2 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day* 2-axle trucks, Autos, Maximum RT/day Total, Maximum RT/day Install trailer and associated utilities 2 5 7 Deliver and set up drill rig/equipment 7 20 27 Install oil, water, and gas equipment 6 15 21 Drill 3 test wells and water well 9 10 19 Testing of wells 13 5 18 Remove drill rig and equipment 5 20 25 Greatest number of trips in one day 18 (during weeks 15, 17, 19, 21-24) 25 (during weeks 7- 12 ) 37 (during week 7) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum truck activity occurs during drilling and testing of wells. Maximum auto activity occurs during weeks 7-12 with the installation of oil, water and gas equipment and the drilling of wells. Maximum activity trucks and autos combined occurs during week 7. Testing of wells would involve crude transportation by truck, by way of an average of 7 trucks per day/5 days per week or up to 12 trucks in one day (round trip). Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix A. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources each week. Source: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 3 Final Design and Construction: 16 Months 2.4.3 Phase 3 Final Design and Construction If it is determined that the production of oil and gas on the Project Site would be economically viable, the Applicant would begin Phase 3 of the Proposed Oil Project. The purpose of Phase 3 would be to utilize the production information from Phase 2 to prepare the final design of the facility, prepare the onsite area for facility installation, install the permanent oil and gas production facilities, and construct offsite Pipelines. 2.4.3.1 Phase 3 Onsite Construction Phase 3 onsite activities would involve the following construction activities: Preparation of final engineering design; Removal of temporary production equipment; Removal of three remaining trees; Removal of 35-foot sound attenuation wall and perimeter fencing (per Mitigation Measure NV-3a); Installation of 24-foot sound attenuation wall (per Mitigation Measure NV-4a); Implementation of remedial action plan; Construction of remaining retaining walls and final grading; Completion of construction of well cellars; Construction of 35-foot block wall (per Mitigation Measure NV-6a); Removal of 24-foot sound attenuation wall (per Mitigation Measure NV-4a); Construction of small office building; Installation of permanent production equipment; Construction of final site improvements; Construction of final street improvements along Project frontage; Installation of final landscaping; Installation of 32-foot sound attenuation wall; Setting of conductor pipe; and Installation of lighting systems. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Each of these activities is detailed in the discussion that follows. A site plan for Phase 3 is shown in Figure 2.14. The conceptual grading plan, site plan, elevations (with the 32-foot sound attenuation wall), and conceptual landscape plan for the Proposed Oil Project at the completion of Phase 3 are shown in Appendix A of the Final EIR. Prepare Final Engineering Design The final design of the permanent oil and gas production facilities, to be implemented during the first few months of Phase 3, would be based on the oil and gas analysis and production results from Phase 2 activities. Final design would include the sizing and development of the exact specifications for the oil, gas, and water separation production equipment and the detailed engineering to prepare the required final construction drawings. Remove Temporary Production Equipment The temporary oil, water, and gas production equipment installed on the Project Site during Phase 2 would be removed. The wells drilled during Phase 2 would be shut in, and steel plating would be placed on top of the well cellar. Remove Remaining Trees The three remaining mature trees along the frontage of the Project Site along Valley Drive would be removed to allow for the construction of final site improvements including a perimeter wall and the installation of permanent landscaping. Remove 32-Foot Sound Attenuation Wall and Perimeter Fencing The 35-foot sound attenuation wall (per Mitigation Measure NV-6a) and the 6-foot perimeter chain link fencing would be removed from the Project Site. Install 16-Foot Sound Attenuation Wall Prior to the initiation of earthmoving activities, a temporary 24-foot sound attenuation wall (per Mitigation Measure NV-4a) would be brought to the Project Site. The sound walls would be designed to be movable and would be relocated within the Project Site as needed to attenuate noise and dust associated with the earthmoving activities needed for the implementation of the Remedial Action Plan and the final grading of the Project Site. The temporary sound walls Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources would be removed from the Project Site after the onsite earthmoving and grading activities are completed. Implementation of Remedial Action Plan The Remedial Action Plan would be implemented to address lead, barium, arsenic and total petroleum hydrocarbon (TPH) contaminated soil and groundwater within and beneath the former landfill area in the northeastern portion of the Project Site. It is anticipated that approximately 9,000 cubic yards of lead contaminated soil would be removed from the Project Site in accordance with the Remedial Action Plan and hauled to a Class 1 landfill at the Kettleman Hills Facility, approximately 190 miles from the Project Site. The TPH contaminated soil (approximately 4,500 cubic yards located deeper than 25 feet) would be treated onsite via vapor extraction. For a detailed discussion of the soil remediation that would occur prior to final grading of the Project Site, refer to the Remedial Action Plan provided in Appendix A of the Final EIR. Groundwater contamination attributed to historic use of the site has been documented (Brycon 2013). The RWQCB have indicated that the Regional Water Quality Control Board Site Cleanup Program reviewed the Report on Groundwater Assessment and indicated the matter would go on its large backlog of low priority cases. Construction of Remaining Retaining Walls and Final Grading Retaining walls (up to 6 feet high) would be constructed 10 feet back from the Valley Drive and 6th Street property lines, along the eastern boundary of the Project Site and along the eastern portion of the southern boundary of the Project Site (see Figure 2.14). In addition, retaining walls would be constructed within the Project Site for the containment area associated with the production equipment. After the completion of the retaining walls, the Project Site would be graded to allow for the installation of Project equipment and to allow for proper site drainage. The final grading of the Project Site would not require the import or export of fill material. Appendix A of the Final EIR provides the conceptual grading plan that indicates the location of the retaining wall locations and the final grading of the Project Site. Complete Construction of Well Cellars The cement well cellar constructed in Phase 2 would be extended, and a second well cellar would be constructed to allow for the drilling of the remaining wells in Phase 4. At completion, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources the well cellars would be approximately 8 feet wide by 120 feet long by 12 feet deep, with stairs at each end and covered with expanded metal grating. The well cellars would be equipped with storm water collection sumps and pumps to direct the storm water to the drain sump. From the drain sump, water would be directed into the processing system and injected, by the water disposal/injection wells drilled in Phase 4, into the oil-producing reservoir below the oil water contact. Figure 2.14 shows the location of the well cellars. Construction of 16-Foot Split-Face Block Wall A 16-foot split-face block wall would be constructed around the perimeter of the Project Site. The wall would be set back 10 feet from the Valley Drive and 6th Street property lines to allow for a landscape area. The wall would have a gated entrance off Valley Drive (set back 70 feet from the sidewalk) and a gated exit to 6th Street. The gates would be metal and motor operated. The appropriate signage would be provided, as is consistent with City requirements. Remove 16-Foot Sound Attenuation Wall After the completion of the Remedial Action Plan, final site grading, and construction of the well cellars and perimeter wall, the 16-foot temporary sound attenuation wall would be removed from the Project Site. Construction of Small Office Building A small office building approximately 650 square feet in size would be constructed in the northeast portion of the Project Site to house employee offices and control and monitoring equipment. The building would have a restroom and break room. The improvements extended to the Project Site in Phase 1 would provide for associated utilities, including water, sewer, natural gas, and telephone. The California Water Service Company and the City would provide water and sewer service, respectively. Southern California Gas Company (SCGC) would provide natural gas, and electricity would be provided by Southern California Edison (SCE). Verizon would provide telephone service. Office related solid waste services would be provided by Athens Services or a future city franchisee. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.14 Phase 3 Proposed Conceptual Site Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Installation of Permanent Production Equipment Permanent oil, water, and gas production equipment would be installed on the Project Site. The permanent oil production facilities would include tanks, vessels, piping, pumps, filters, and supporting metering equipment. These are listed in Table 2.9. A retaining wall around all of the vessels, tanks and other equipment containing oil would provide secondary containment. The design capacity of the secondary containment would exceed the fluid capacity of the largest tank by 110 percent plus the precipitation from a 100-year storm event. In Phase 4, the oil production facility would be used to separate gas, water, and solids from the oil, after which the oil would be stored in tanks prior to transport via pipeline from the Project Site. The separated water would be accumulated in tanks, filtered, and then injected into the oil- bearing reservoir by the four water disposal/injection wells. Gas from each well would be treated on the Project Site and then sold to the SCGC. The permanent gas production facilities would have compressors, vessels, a H2S and carbon dioxide (CO2) removal system, a moisture removal system, and an odorizing system. The use of this equipment is discussed in Section 2.4.4, Phase 4 Development and Operations. Table 2.9 Phase 3 and 4 Processing Equipment Listing Equipment Size and Number Oil Shipping Tanks 40 foot diameter by 16 feet high, 2900 BBLS, 2 tanks Water Clarifier 40 foot diameter by 16 feet high, 2900 BBLS, 1 tank Water Surge 30 foot diameter by 16 feet high, 1120 BBLS, 2 tanks Gas compressors 30 foot by 40 foot - 3 compressors DEA Skid (acid gas removal) 12 foot by 40 foot, 1 skid Low Temperature Separation (LTS) skid (propane refrigerant) 12 foot by 40 foot, 1 skid Flare/Gas Combustor 10 foot diameter by 22 feet high Vapor Recovery Compressor 17 foot by 28 foot IGF Skid 18 foot by 8 foot, 1 skid Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Filter Skid 25 foot by 18 foot, 1 skid Micro Turbines (five turbines) 200 kw each, 30 foot by 40 foot 3-Phase Separator 7 foot diameter by 35 feet long Lease Automatic Custody Transfer (LACT) Skid 5 foot by 12 foot Source: Project Application, Amendments and Appendices. BBLS=barrels (42 gallons), skid=a pre- fabricated unit. Construction of Final Site Improvements In addition to the areas where the concrete well cellar, the containment area, and the oil and gas production equipment have been constructed, the ground surface of the Project Site would be paved with concrete or asphaltic concrete and designed so that no fluids, including rain water up to a 100-year storm event, would leave the Project Site. Liquids, including rainwater, would be captured in the containment areas or in the well cellars, processed through the production facility, and injected into the oil-bearing reservoir via four water disposal/injection wells. Construction of Final Street Improvements Along Project Frontage The Proposed Oil Project would include the construction of street improvements along the frontage of the Project Site on 6th Street and Valley Drive. The improvements would include the installation of new curbs, gutters, and sidewalks. Installation of Final Landscaping Permanent landscaping would be provided along the perimeter of the Project. To the extent feasible, plant materials used in the temporary landscape plan installed in Phase 1 would be reused in the permanent landscaping. Reclaimed water supplied by the West Basin Municipal Water District would be used for irrigation. Appendix A provides the conceptual landscape plan and plant materials for the permanent landscaping that would be provided at the completion of Phase 3. Installation of 32-Foot Sound Attenuation Wall At the completion of the improvements in Phase 3, a 32-foot sound attenuation wall would be Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources erected inside the 16-foot block wall to provide for noise attenuation during Phase 4 drilling. Appendix A of the Final EIR provides the elevations of the Project Site, including the sound attenuation walls with the block walls, from Valley Drive and 6th Street at the completion of Phase 3. Set Conductor Pipe Prior to drilling in Phase 4, a dry-hole digger/auger would be used to set the conductor casing in the well cellars for all of the intended wells on the Project Site in a manner similar to the setting of the conductor pipe in Phase 2. A hole approximately 18 inches in diameter would be drilled to a depth of approximately 80 feet. A conductor pipe would be lowered to the bottom of the hole and cemented in place. This would form the seal of the near-surface formation and serve as a steel conduit to allow the drilling fluid used in the next stage of the well to be circulated to the surface without washing away the shallow near-surface dirt. All conductors necessary to develop the Proposed Oil Project would be set, and the dry hole digger/auger would be moved off the Project Site. Lighting Systems The permanent lighting for the Proposed Oil Project would be installed as a part of Phase 3. The lighting,as proposed in the Applicant’s Lighting Plan, would be designed to be directed downward and shielded in order to avoid obtrusive light spillage beyond the Project Site, reflective glare, and illumination of the nighttime sky. 2.4.3.2 Phase 3 Offsite Pipeline Construction During Phase 3, offsite pipelines for oil and gas would be constructed to transport the oil and gas to markets. Each route is discussed in the following subsections. Gas Pipeline Route As it leaves the Project Site, the offsite underground pipeline for the transport of gas would be constructed for a distance of 0.43 miles in the ROW of southbound Valley Drive (which is a one way street south of 2nd Street) in the City of Hermosa Beach to a tie-in to a SCG gas line in the Southern California Edison(SCE) Utility Corridor east of N. Francisca Avenue in the City of Redondo Beach. See Figure 2.15 for the proposed pipeline routes. Appendix A contains Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources detailed drawings of the route and valve box options. This portion of the gas pipeline would consist of two parallel pipelines, 4 inches in diameter, and located at a depth of approximately 3.5 to 4 feet below ground surface (bgs) within the road ROW until it ties into the SCG line at a proposed metering station immediately to the east of N. Francisca Avenue. The pipeline would be a loop system that allows for the gas to be returned to the Project Site for further treatment in the event that the produced gas does not meet SCG standards. The metering station site, which would be provided as a part of the Proposed Oil Project and is owned by SCG, would be approximately 40 by 60 feet in size and surrounded by an 8-foot high block wall. As shown in Figure 2.15, this first portion of the gas pipeline is bounded to the east by the Greenbelt and Ardmore Park and, further to the east, by Ardmore Avenue and residential development in the City of Hermosa Beach; to the west by the Beach Cities Self Storage facility, light manufacturing land uses, South Park, and residential development in the City of Hermosa Beach; and to the west in the City of Redondo Beach by facilities associated with the AES Power Plant. The gas line is designed for a maximum operating pressure of 465 pounds per square inch gauge (psig), but would typically operate at approximately 225 psig of pressure. Once the proposed gas pipeline from the Project Site ties into the SCG point of receipt at the proposed metering station, SCG would construct a six-inch gas pipeline that extends northeast for approximately 1.4 miles to connect to an existing SCG pipeline transmission facility (Line 1170) located on the south side of 190th Street near its intersection with Green Lane, between Flagler Lane and Beryl Street, in the City of Redondo Beach. After the first portion of the new six-inch gas pipeline leaves the proposed metering station and continues northeast, it would be located in an existing SCG easement within the SCE Utility Corridor between N. Francisca Avenue and Pacific Coast Highway. The new pipeline would exit the SCE Utility Corridor on the south side of the intersection of Herondo Street/Anita Street with Pacific Coast Highway, extend across Pacific Coast Highway, and continue northeast within the ROW of Anita Street/190th Street to its point of connection with the existing SCG pipeline transmission facility (Line 1170). If for some reason the first portion of the new pipeline could not be located within the existing SCG easement within the SCE Utility Corridor between N. Francisca Avenue and Pacific Coast Highway, it would leave the proposed metering station and continue for a short distance north within the ROW of N. Francisca Avenue and turn northeast at Herondo Street Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Pigging Passing a device through a pipeline that cleans or inspects the pipeline. A pig is usually a small rubber device slightly smaller in diameter than the pipeline. The pig is forced through it by product flow. Usually cylindrical or spherical, pigs sweep the line by scraping the sides of the pipeline and pushing debris ahead within the ROW until it reaches the intersection of Herondo Street/Anita Street with Pacific Coast Highway. At that point it would continue to the northeast as described previously. Although SCG would obtain the necessary permits and construct the new gas pipeline, the Applicant would pay for the associated costs of construction. The proposed gas line from the proposed metering station to the existing SCG pipeline transmission facility is bounded to the north by commercial land uses and residential development in the City of Redondo Beach and to the south by commercial land uses, residential development, and public facilities including Dominguez Park and Redondo Beach Dog Park in the City of Redondo Beach. Oil Pipeline Route The offsite underground pipeline for the transport of oil to an area refinery via a connection to a valve location in the City of Torrance would be constructed for a distance of approximately 3.55 miles in one of three potential pipeline scenarios that would follow a route through the Cities of Hermosa Beach and Redondo Beach and terminate in Torrance. The selection of the pipeline route would occur after Project approval. Appendix A of the Final EIR shows the pipeline route scenarios in detail. The pipeline would be 8 inches or less in diameter, located at a depth of approximately 3.5 to 4 feet bgs depending on the grade. At one of four potential valve box locations, the pipeline would tie-in to an existing pipeline that transports oil to a refinery. Appendix A of the Final EIR provides the proposed alignments of the three oil pipeline scenarios, the respective jurisdictional boundaries, and the adjacent land uses. Appendix A of the Final EIR provides the four valve box location options that the pipeline could tie into. More details are included in Appendix A. The oil line would be designed for a maximum operating pressure of approximately 500 psig, but would typically operate at approximately 100 to 200 psig of pressure. The pipeline would Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources include pigging stations to send and receive maintenance pigs into and from the pipelines to clean or inspect the pipelines during ongoing operations. This would occur for the lifetime of the Proposed Oil Project. Pigging refers to the practice of using pipeline inspection gauges or 'pigs' to perform various maintenance operations on a pipeline without stopping the flow of the product in the pipeline (refer to sidebar for more information). Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.15 Proposed Pipeline Routes Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source:Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources As shown in Figure 2.15, the oil pipeline would be constructed for a distance of 0.39 miles in the ROW of southbound Valley Drive (which is one-way starting at 2nd Street) in the City of Hermosa Beach to the corner of Valley Drive/N. Francisca Avenue and Herondo Street in the City of Redondo Beach. At this point, the oil pipeline would turn to the east along one of the following three pipeline scenarios (see Appendix A of the Final EIR): Scenario 1 consists of the construction of the oil pipeline towards the east within the ROW of Herondo Street, Anita Street, and 190th Street in the City of Redondo Beach to the intersection of 190th Street/Hawthorne Boulevard in the City of Torrance. At this point, Scenario 1 would continue to one of the four valve box options presented later in this discussion; Scenario 2 consists of the construction of the oil pipeline towards the east within the ROW of Herondo Street and Anita Street in the City of Redondo Beach and the ROW of 190th Street in the City of Torrance to the intersection of 190th Street/Hawthorne Boulevard. At this point, Scenario 2 would continue to one of the four valve box options presented later in this discussion; and Scenario 3 consists of the construction of the oil pipeline towards the east within the SCE Utility Corridor in the Cities of Redondo Beach and Torrance. When the oil pipeline meets Hawthorne Boulevard in the City of Torrance, Scenario 3 would continue to one of the four valve box options presented later in this discussion. The function of the valve box is to house the valve on the new oil pipeline to isolate it from the main oil transmission line and allow for inspection, operation, and maintenance of the valve and line to be performed as required by Federal and State regulations. The site requirement for a valve box for the Proposed Oil Project would be approximately six feet wide by eight feet long by six feet high. The valve box would be a precast concrete box with walls that are typically eight to ten inches thick. The valve box would be located below grade and designed to State of California Highway “traffic-rated” standards to allow for vehicle travel over it. A standard 36-inch or 42-inch manhole cover would provide access down into the valve box from grade. The manhole cover, the weight of which takes two people to remove and replace, would be bolted into place with special tools, providing security for the valve box. The oil pipeline would end at one of the following valve box locations: Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Valve Option 1 – For Pipeline Scenarios 1 and 2, the pipeline would continue from the Hawthorne Boulevard/190th Street intersection down 190th Street to the Exxon Mobil Refinery, where it would connect with a valve box location within the refinery site. For Pipeline Scenario 3, the pipeline would turn north in Hawthorne Boulevard and east in 190th Street to the refinery site; Valve Option 2 - For Pipeline Scenarios 1 and 2, the pipeline would turn south in Hawthorne Boulevard to the SCE Utility Corridor where it would turn east to the valve box location. For Pipeline Scenario 3, the pipeline would continue east in the SCE Utility Corridor across Hawthorne Boulevard to the valve box location; Valve Option 3 – For Pipeline Scenarios 1, 2, and 3, the pipeline would turn north in Hawthorne Boulevard to the valve box location adjacent to the Santa Fe Rail Road line; and Valve Option 4 - For Pipeline Scenarios 1, 2, and 3, the pipeline would turn north in Hawthorne Boulevard to the valve box location northeast of the intersection of 190th Street/Hawthorne Boulevard. The oil pipeline would be equipped with a supervisory control and data acquisition system (SCADA), which would monitor pipeline pressure and flow and, if a leak is suspected, would notify the operators. The percentage that is set in the SCADA system would notify the operator of potential oil leak. The detection timeframes set by the Applicant would vary depending on the crude oil flow rate in the pipeline. When the flow rate is at the maximum anticipated production rate of 8,000 barrels per day, flowing on a continuous basis, the flow rate would be 5.5 barrels per minute, and the following would apply: 15 minute time interval 5 % or 4.1 barrels 1 hour time interval 2 % or 6.7 barrels 24 hour time interval 1 % or 80 barrels If oil production is considerably less than the 8,000 barrels per day, the percentages would be adjusted upward to maintain essentially the same volume of oil previously noted based on the reduced flow rate in the pipe. Pipeline Construction Methods The gas and oil pipelines would be installed utilizing conventional trenching methods within Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources either one trench or two separate trenches within the roadway ROW. The construction and installation process would occur in stages consisting of approximately 237 feet in length each. Two stages would be constructed per day (a segment of 237 feet would be new construction, and another 237 feet would be the completion of the construction from the previous day). With the addition of approximately 126 feet for lane transitions and safety cones, a total of approximately 600 linear feet of roadway would be affected per day. A construction spread would be used to accomplish most aspects of the gas and oil pipeline construction along the alignments previously discussed. A construction spread is a clustering of construction equipment that moves along the pipeline route, sequentially removing asphalt roadway, trenching, laying pipe, filling, re-paving, and cleaning up. A pipeline construction spread consisting of several units would be organized to proceed in the following order: Pre-construction activities Asphalt removal and ditching or ROW grubbing and ditching Pipe handling/welding Pipe coating Pipe lowering, backfilling, and street repair Pipe testing and inspection Metering, pigging, odorant station installation If the oil pipeline can be laid within the SCE Utility Corridor (Scenario 3 pipeline route), a construction spread similar in arrangement, but smaller, would be used since the alignment would not have asphalt. In addition, if it is determined that existing sleeves under streets crossing the SCE Utility Easement exist, trenching across some streets may not need to occur. The following describes the activities that would occur for the construction of the pipelines and Figure 2.16 depicts a typical pipeline construction spread. Pre-Construction Activity The pipeline alignment ROW would include roadways and/or land in existing paved streets and other property, potentially including private property. Approval to construct and operate a pipeline would be obtained from or authorized by franchise agreements or permits from the agency with jurisdiction over the roadways and, if needed, from affected property owners. The construction requirements in the municipal codes and ordinances of the Cities of Hermosa Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Beach, Redondo Beach, and Torrance allow for the construction on major roadways during the following weekday hours: Hermosa Beach: 8:00 a.m. to 6:00 p.m. on weekdays and 9:00 a.m. to 5:00 p.m. on Saturday. No construction on Sundays and holidays; Redondo Beach: 9:00 a.m. to 3:00 p.m. on weekdays. No construction on weekends and holidays; and Torrance: 8:30 a.m. to 3:30 p.m. on weekdays. No construction on weekends and holidays. Figure 2.16 Typical Pipeline Construction Spread Note: All activities may not occur simultaneously. The pipeline construction activities would occur on weekdays between the hours of 9:00 a.m. and 3:00 p.m. (as per the CUP requirements), a time frame which is after morning peak commute hours (i.e., 7:00 a.m. to 9:00 a.m.) and before evening peak commute hours (i.e.: 4:00 p.m. to 6:00 p.m.) on the affected roadways. The Applicant proposes no construction activities during weekends and holidays. The Applicant would prepare a Construction Traffic Management Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources (CTMP) that would include the following: Require the pipeline contractor(s) to obtain and follow Street Construction Permits in the affected Cities of Hermosa Beach, Redondo Beach, and Torrance, and Caltrans facilities (Pacific Coast Highway and Hawthorne Boulevard); Develop detour and traffic management plans consistent with the affected City’s Standard Roadway Plans (e.g., Torrance Street Standard T603), the California Manual of Uniform Traffic Control Devices (MUTCD), or the Work Area Traffic Control Handbook (WATCH); Revise pipeline construction segments to minimize access conflicts to adjacent residents and businesses; Develop truck route plans to reduce traffic on the street network during peak traffic commute hours; Avoid construction-related traffic to occur during peak travel periods; and Implementation of staggered construction worker shifts to minimize Project traffic during the peak hours. Underground Service Alert would notify service providers of construction to avoid conflicts with existing utilities and disruptions of service to utility customers. Because construction would occur in either paved streets or an existing utility corridor, extensive grading is not proposed. Asphalt Removal and Ditching Once traffic control measures are in place, trenching operations would begin. Typically, a five- foot deep and 18- to 24-inch wide ditch (single pipe) or 36-inch wide ditch (double pipes) would be excavated (varying depths, depending on the conditions encountered). Backhoes and track hoes would excavate the ditch. However, hand digging would be necessary to locate buried utilities, such as other pipelines, cables, water mains, and sewers. Fugitive dust emissions at the construction site during earthmoving operations would be controlled by water trucks equipped with fine-spray nozzles. Spoils from cuts, including cuts in the streets, would be saved for backfill or would be removed, and the ditch would be backfilled with slurry material as approved by the local jurisdictional agency. Effort would be made to minimize the amount of excess material. Material unsuitable for backfill and not economically useful for other purposes at the pipeline location would be disposed of at a landfill according to local jurisdictional guidelines. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources When used for backfill, the spoils from the trenches would be hauled to previously disturbed sites, as determined by the construction contractor. Pipe Handling Special trucks would transport the pipe in 40- to 80-foot lengths from the shipment point or storage yard to the pipeline installation point. Where sufficient room exists, trucks would carry the pipe along the roadway, and sideboom tractors would unload the joints of pipe from the stringing trucks and lay them end to end beside the ditch-line for future line-up and welding. A portable bending machine would bend the pipe to fit the ditch contour both vertically and horizontally. Construction ROW conditions could occasionally require pipe bends that are not able to be accomplished in the field. In these cases, manufactured or shop-made bends would be used, and pipe would be bent prior to the application of coating. While the line-up crew lays the pipe, line-up clamps would hold the pipe sections in position until approximately 50 percent of the first welding pass is completed. The welding crew would then apply the remaining weld passes to comply with API 1104, ASME B31.4, or ASME 31.8.2 All pipeline welds would be radiographically inspected. Pipe Coating Protecting the pipe from moisture and air helps prevent corrosion, thereby preventing cracks, breaks, and leaks in the pipe. The steel pipeline would be coated externally with fusion-bond epoxy or a corrosion resistant tape wrap system. Pipeline coating would be applied at the mill before delivery to the construction site. However, field coating would be necessary on all field weld joints to provide a continuous coating along the pipeline. After the pipe has been welded and radiographically inspected, one of the following would be applied: two-part epoxy, heat- shrink polyethylene sleeves or polyethylene tape and tape primer. Pipe Lowering, Backfilling, and Street Repair The pipe would be lifted and lowered into the ditch by one or two sideboom tractors spaced so that the weight of unsupported pipe would not cause mechanical damage. Cradles with rubber rollers or padded slings would allow the tractors to lower the pipe without damage as they travel 2 ASME - American Society of Mechanical Engineers; API – American Petroleum Institute Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources along the ditch line. Additional welds could be required in instances where the ditch line is obstructed by other utilities crossing the pipe ditch. These welds would typically be made in the ditch at the final elevation. In addition to normal welding and weld inspection, each weld would require pipe handling for line-up, cutting to exact length, coating, and backfilling. Backfill material in roadways would most likely be slurry material or could be ditch spoils, according to local agency requirements. Slurry material would be delivered by concrete trucks and consist of sand and cement. Concrete trucks would be trucks from local commercial sources. The area would be repaved if it was previously an existing paved street. In areas where the pipeline would be in previously unpaved areas, the backfill would include topsoil preserved from the excavation for re-vegetation where needed. At the time of backfilling, a colored warning tape would be buried approximately 12 to 18 inches above the pipeline to indicate the presence of a buried pipeline to third-party excavators. The backfilled earth would be compacted using a roller or hydraulic tamper. The trench would be filled with slurry where approved or required by local regulations. Steel plates would cover any open trench at the end of each workday. Pipe Testing and Inspection All field welding would be performed by qualified welders that meet the Applicant’s specifications and in accordance with all applicable laws, ordinances, regulations, and standards, including API 1104, the Standard for Welding Pipe Lines and Related Facilities, and the rules and regulations of the U.S. Department of Transportation found in the Code of Federal Regulations. All welds would be visually and radiographically inspected. All rejected welds would be repaired or replaced as necessary and radiographically inspected again. The radiographic reports and a record of the location of welds would be maintained for the life of the pipeline. In addition to standard testing of all pipe and fittings at the mill, hydrostatic testing would be performed after construction and prior to startup. Federal regulations mandate hydrostatic testing of new, cathodically protected pipelines prior to placing the line into operation. This test involves filling a test section of the pipeline with fresh water and increasing pressure to a predetermined level. Such tests are designed to prove that the pipe, fittings, and weld sections would maintain mechanical integrity under pressure without failure or leakage. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Cathodic protection controls the corrosion of a metal surface by making it work as a cathode of an electrochemical cell. This is achieved by placing the cell in contact with the metal surface and another more easily corroded metal to act as the anode of the electrochemical cell. The cathodic protection system consists of power sources called rectifiers, buried anodes (either sacrificial or impressed current), and test stations along the pipelines. Metering and Pigging Station Installation A gas-metering station would be required at the custody transfer location where the Applicant’s proposed gas pipeline interconnects with the existing SCG pipeline. The metering station would measure and record gas volumes, gas quality, and gas characteristics and provide custody transfer of the gas to SCG. The metering station would be located adjacent to N. Francisca Avenue, southeast of the intersection of Herondo Street and N. Francisca Avenue. SCG would then construct a new six-inch pipeline to a tie-in location with the existing SCG pipeline transmission facility (Line 1170) as previously discussed in Section 2.4.3.2, Phase 3 Offsite Pipeline Construction. In addition to the metering station, a pigging station would be installed at the metering station and Project Site for the gas pipeline, as required by SCG, and at the tie-in point for the oil pipeline. An odorant station would be installed at the Project Site consisting of a 500 gallon odorant tank that would be filled approximately annually. The gas would be odorized before it leaves the site. 2.4.3.3 Phase 3 Hazardous Materials Hazardous materials used as part of Phase 3 would be associated with construction activities, including diesel fuels, lubricating oils, pipe coatings, solvents, etc. No storage of hazardous materials beyond standard consumer quantities (a few gallons) is anticipated in this phase. 2.4.3.4 Phase 3 Schedule It is anticipated that Phase 3 would occur for a period of approximately 14 months as indicated in the schedule provided in Table 2.10. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.10 Phase 3 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28- 38 39- 53 54 55 56 57 58 59 60 61 62 63 64 Remove temporary equipment Remove trees along Valley Remove32-foot sound wall Implement RAP Construct retaining walls Final grading Construct well cellars Construct 16-foot block wall Remove 16-foot sound wall Construct/install facilities Construct street improvements Install landscaping Construct offsitepipelines Start-up of equipment Install 32-foot sound wall Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Set conductor Note: Days are weekdaysSource: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.11 Phase 3 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day 2-axle Trucks, Autos, Maximum RT/day Total, Maximum RT/day Remove production equipment 6 15 21 Remove trees along Valley Drive 2 4 6 Install 16-foot noise wall 6 8 14 Implement Remedial Action Plan 18 8 28 Construct retaining walls 3 20 24 Final grading (balanced) 4 6 10 Construct well cellars 9 15 25 Construct 16-foot perimeter wall 5 20 25 Remove 16-foot noise wall 5 5 10 Construct/install onsite facilities 18 40 47 Construct street improvements 11 9 20 Install landscaping 1 7 7 Construct pipeline 18 22 54 Start-up production equipment 0 7 7 Install 32-foot sound wall 6 9 16 Set conductor 2 5 7 Greatest number of trips in one day 18 (during weeks 6-13, 23, 54) 62 (during weeks 39-53) 78 (during week 39-53) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips (RT). Maximum truck activity occurs during week 6-13 with RAP activities, week23 with construct well cellars, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 4 Development and Operations: 2.5 years drilling program. Operations - ongoing perimeter wall and onsite facilities and week 54 with construction of onsite facilities, pipeline construction and conductor setting. However, the majority of the pipeline construction traffic would occur away from the Project Site except during the installation of the sections of the pipeline located very close to the Project facility. Maximum auto activity occurs during weeks 39-53 with the facilities construction. Maximum activity trucks and autos combined occurs during weeks 39-53, however, the majority of the vehicles for the pipeline construction would be parked at the contractor’s facilities or near the pipeline alignment. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for each week. Source: Project Application, Amendments and Appendices 2.4.3.5 Phase 3 Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 3 are provided in Table 2.11. The vehicle trips required to transport employees and equipment for Phase 2 are also provided in Table 2.11. 2.4.4 Phase 4 Development and Operations The purpose of Phase 4 would be to maximize oil and gas recovery from the reservoirs by drilling additional wells and operating the permanent facility. To accomplish this, Phase 4 would involve the drilling of wells; the operation of the permanent oil production equipment; the transport of the oil and gas by pipeline to their respective destinations; and the ongoing Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources maintenance of the Proposed Oil Project. The Proposed Oil Project would be designed for a maximum capacity of 8,000 barrels of oil per day and 2.5 million cubic feet of gas per day. Figure 2.17 provides the conceptual site plan for Phase 4. Elevations and the conceptual landscape plan for the Proposed Oil Project during Phase 4 are included in Appendix A of the Final EIR. 2.4.4.1 Phase 4 Drilling Phase 4 drilling would involve delivery and setup of the drilling rig and the drilling of the remaining wells. Delivery and Set Up of Drill Rig The drilling rig and its associated equipment would be brought to the Project Site by trucks with trailers permitted by the City and the California Highway Patrol. The approximately 87-foot high drill rig would be powered by electricity. A large crane with a 150-foot boom would be used to erect the drill rig. The crane would be removed from the Project Site after the drill rig and supporting equipment have been set in place. Support equipment for the drill rig would include pipe racks, mud and cutting system, pumps, hydraulic equipment, and an accumulator. In the event of a loss of power from SCE, the generator, which would be a non-road portable diesel-fuel generators certified by the California Air Resources Board (CARB), would provide power for the safe shutdown of the drilling operation. The drill rig and its associated equipment would require the same setup as described under Section 2.4.2, Phase 2 Drilling and Testing. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.5 Drill Remaining Wells The drilling of the remaining oil wells and water disposal/injection wells, up to a total of 30 oil wells and four water disposal/injection wells, would involve the same activities as described for Phase 2. As previously discussed regarding Phase 2, once the drilling of a well is complete, the cemented casing would be run from the surface to the bottom of the wellbore where the well penetrates the oil-producing reservoir. The well would be plumbed into the temporary production equipment and pump system that had been installed. The pump system, installed below ground, would bring the oil, gas, and water to the surface for processing. In addition, up to three additional water disposal/injection wells (in addition to the single water disposal/injection well drilled during Phase 2) would be drilled to allow for the injection of processed produced water back into the oil-producing reservoir and at below formation fracture pressure. The drill rig would operate continuously for 24 hours per day, seven days per week, until the appropriate depth and bottom-hole location for each well has been reached. It is estimated it would take approximately 30 days to drill each well, including the time for placing the drilling rig in position and installing rigging. After the drilling of the wells is complete, the drill rig would be removed from the Project Site. Including set up for each well and removal from the Project Site, the total drilling time for Phase 4 would be about 30 months (2 ½ years). Drilling each well would require approximately 130,000 gallons (or 0.4 acre-feet) of water. The water would be reclaimed water provided by the West Basin Municipal Water District conveyed via extension of an existing waterline serving the Greenbelt east of Valley Drive. The West Basin Municipal Water District has provided the Applicant with a “will serve” letter. The drilling process requires the use of drilling mud to circulate drilled rock cuttings out of the well hole, retain the integrity of the well hole, and control reservoir pressure. The drilling mud would be collected onsite in tanks. Although most of the mud would be reused on subsequent wells, some mud would be removed from the Project Site and disposed at Anterra’s Oxnard Licensed Class 2 Disposal Facility or a similar facility. All other waste generated by the test drilling would be transported by truck to Clean Harbors Buttonwillow Landfill or a similar facility closer to the Project Site. Noise abatement would be incorporated into the drilling process in the same manner as described for Phase 2, including a 32-foot high sound attenuation wall. After the drilling of the wells is Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources completed, the 32-foot sound attenuation wall would be removed from the Project Site. Re-Drilling of Wells Re-drilling of a well occurs if production from a well declines substantially or if problems exist with the well, affecting the well’s efficiency or viability. The same activities would be required for re-drills as for initial drilling, except that conductor piping would not have to be installed again, as the same conductor piping would be used for the re-drill. Although the Applicant does not expect the need for the re-drilling of wells, the activity may be required under extraordinary circumstances. Depending on the circumstances, a workover rig might be able to be used to complete a re-drill. However, for the purpose of providing a worst- case analysis, the Applicant estimates that up to 30 re-drills could occur over the life of the Proposed Oil Project, with up to five re-drills occurring during any given year. In the event that a re-drill would occur, noise attenuation design features, including the use of a 32-foot sound attenuation wall and acoustical covers, would be implemented on the Project Site. Re-drills would involve the same activities and equipment as the drilling proposed for Phase 2 and 4. 2.4.5.1 Phase 4 Processing and Operations During the drilling of the remaining oil wells and water disposal/injection wells, the production of the extracted oil would occur. Figure 2.18 shows the steps involved in processing the oil, water, and gas produced from the wells during Phase 4. The permanent production equipment on the Project Site would be used to process the oil and gas to a standard that would be suitable for sale. The produced water would be processed and injected into the oil-producing reservoir. The gas produced would be processed and sold to the gas company. The oil and gas produced would be transported offsite via pipelines constructed during Phase 3. Figure 2.18 Phase 4 Process Flow Diagram Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Noise abatement would be incorporated into operational practices and permanent production equipment. The anticipated personnel on the Project Site would be four personnel for a 12-hour daytime shift, two personnel for an 8-hourgraveyard shift, and two personnel for an 8-hour swing shift. Therefore, personnel would be present 24 hours per day on the Project Site. During the ongoing operation of the Proposed Oil Project, active wells would require periodic routine service. These activities could include the replacement of down-hole pumps, piping, and cleaning. These maintenance activities would typically be accomplished by utilizing a service rig, or “workover” rig, approximately 110 feet high. The workover rig would be operated on the Project Site a maximum of 90 days per year. The workover rig would be operated between the hours of 8:00 a.m. and 6:00 p.m. on weekdays only (excluding holidays). Only a single workover rig would be onsite at one time. In addition, there would be an occasional need for other services such as facilities repair and Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources solid and liquid waste pick-up. Preventative maintenance would be performed on a routine basis to ensure the integrity of the operating equipment. The pipelines would be periodically inspected to ensure their continued integrity. The permanent production facility would be utilized to separate and treat produced oil, gas and water. The separation and treatment of these fluids allows for the oil and gas to be sold and subsequently transported via pipeline and for the water to be injected into the oil-producing reservoir below the oil water contact line. Figure 2.18 provides a simplified flow diagram of the flow of fluids through the permanent production facility. The following describes the steps of production and operational characteristics in Phase 4. Fluids Piped from the Wellhead to the Production Facility After a well has been drilled and completed (final down-hole equipment installed), the extracted fluids would be piped to the permanent production facility on site. The combination of fluids (i.e., oil, gas, and water mixture) is referred to as an emulsion. This emulsion would be sent via pipes to a production header, where it is commingled with the emulsion from all the wells in a gross line before entering a three-phase separator. There is also a test header that allows the diversion of emulsions from a single well through a well test station before the three-phase separator. The well test station allows for the testing of each well quality and flow characteristics. After the emulsion passes through the well test station, it would be directed back to the gross line where it would be commingled back with the emulsion from the production header and then enter the three-phase separator. The three-phase separator separates the oil, gas, and water. The gas exits the top, the oil exits the middle, and the water exits the bottom of the separator. Each of these fluids enters a specific system of treatment, as is discussed in the following subsections. Oil Treatment System After the produced oil leaves the three-phase separator, it would enter a stock tank, where it may need to be heated depending on the quality of the crude oil. This heating would allow excess water to drop from the oil. Heating, if necessary, would be provided by the microturbine exhaust waste heat recovery system. From the stock tank, the oil would be measured using a Lease Automated Custody Transfer Unit (LACT) and transported via pipeline to the purchaser. Any water that drops out of the oil would be routed to the water treatment system. Vapors would be Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources directed to the gas processing systems through the vapor recovery unit. Gas Treatment System During this phase, gas would be treated, sold, and subsequently transported via pipeline to the SCGC. Treatment of the gas would be required to meet gas pipeline specifications. After the gas leaves the three-phase separator, it would be sent to the first stage compressor. The first stage compressor would increase the pressure of the gas for treatment. The first stage of gas treatment is removal of H2S from the gas utilizing triazine using the SulfaScrub system. SulfaScrub is a non-regenerative batch process that requires replacement of the SulfaScrub materials periodically. The SulfaScrub process is a “scavenging” process, meaning it is used to remove H2S in process gas at low concentrations (up to concentrations of approximately 200 ppm). After leaving the SulfaScrub system, the gas would be sent through the amine system. This amine system removes CO2 from the gas. After leaving the amine system, the gas would pass through the second stage compressor, where pressure is increased prior to the gas’ entry into the low temperature separation system. The low temperature separation system removes any remaining moisture (mostly water) and gas liquids from the gas prior to sale. Propane would be utilized as a refrigerant in the low temperature separation system. Before the gas leaves the Project Site, it would be odorized using an odorizing substance (mercaptan or equivalent) as required by law. The gas would then be sent via pipeline through a metering station to a SCG pipeline constructed in Phase 3 located near the corner of Herondo Avenue and N. Francisca Drive to the south of the Project Site. Water Treatment System After the water leaves the three-phase separator, it would be sent to the clarifier tank. This tank would allow solids in the water to drop out. From the clarifier tank, the water would then enter the induced gas flotation unit for the removal of suspended matter, such as oil or solids. The induced gas flotation unit removes oil by injecting gas bubbles into the water. The bubbles adhere to the suspended matter, causing the suspended matter to float to the surface and form a froth layer, which is then removed by a skimmer. From the induced gas flotation unit, the water would then pass through a filter unit. The filter Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources unit would be used to clean the water of any remaining oil and solids, such as sand. After the water has left the filter unit, it would enter the water surge tanks for storage before disposal/injection. From the water surge tank, the water would then flow through pumps and be sent to the disposal/injection wells for injection into the oil producing reservoir. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.17 Phase 4 Site Plan with Drilling Rig Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Project Application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Vapor Recovery System Gas from all tanks and vessels not part of the gas processing system (the oil and water processing tanks and vessels), as well as pressure relief valves, would be gathered through pipes into a closed-system and directed to a vapor recovery compressor unit. The vapor recovery compressor would compress the gas and then add it to the gas in the gas processing system (from the three- phase separator, etc), where it would be processed and sent via pipeline to the metering station and the SCG system. Process Drain System All equipment would be connected to a drain system that would be directed to a drain tank. Liquids from the drain tank would be sent back to the three-phase separator for reprocessing. Solids from the drain system may periodically be removed to an offsite approved disposal facility. Electrical Generation System The facility would utilize a Microturbine system, which would consist of five 200 kw Capstone turbines configured as a single 1,000 kw package. Anticipated NOx emissions would be 4 ppm. Gas produced on the Project Site would be utilized as fuel for the turbines. Facility Storm Drainage System The Proposed Oil Project Site is designed to retain, process, and inject storm water within the perimeter fence or wall for a 100-year storm event. All rainwater falling on the site would be collected and pumped into the water processing system for injection into the oil reservoir. In addition, any spills on the site would also be contained, both within process system walls/berms around equipment and site walls/berms around the Project Site. Process walls/berms would be designed to contain at least 110 percent of the largest vessel plus the precipitation from a 100- year storm event. Waste Waste would be generated as part of the facility operations and the production process. Regular waste would include typical municipal trash such as paper, trash bags, food, and cups. Process waste would include generic oil field waste such as sandy oil (from the tank bottoms), spent H2S scavenger, spent filters, oily cloths (i.e., rags), gloves and Tyvek® suits. Intermittently the facility could generate hazardous waste. These wastes could include empty drums, rinse water, painting supplies, spilled chemicals, spent media, and hydraulic fluids. The Applicant indicates Section 2: Project Description Exhibit B that the Project Site would have an Environmental Protection Agency (EPA) and Department of Toxic Substances Control(DTSC) Identification Number. Phase 4 Safety and Security Systems The Fire Protection Plan for Phase 4 would be provided by the Applicant for review and approval by the City of Hermosa Beach Fire Department (Fire Department) and incorporated into the Phase 4 Site Safety Plan. Emergency access would be incorporated into the design of the Proposed Oil Project. An additional fire hydrant would be provided adjacent to the Project Site as a component of the Proposed Oil Project. The location of the hydrant would be determined by the Fire Department, and installation would occur as a part of the construction completed in Phase 3. A fire suppression system for the ongoing operation of the Proposed Oil Project in Phase 4 would be installed during Phase 3. The fire suppression systems would include a foam injection system and automated detection and annunciation systems. Automated alarm systems would be installed for the detection of chemicals and fire hazards to notify onsite personnel that an emergency situation is potentially occurring. If it is determined that a chemical fire or fire emergency exists, the onsite operator would activate the emergency shutdown system and notify the Fire Department. The Fire Department and their allied agencies would respond as indicated in their mutual and automatic aid agreement contracts. The onsite personnel for the Proposed Oil Projectwould be trained for initial spill response and activation of emergency systems at the site as per HAZWOPER requirements, but would not be trained for fire fighting and would rely on the Fire Department for response activities. The fire detection system would consist of thermal fire detection and optical surveillance systems that would monitor potential fire zones and activate warning indicators. The Applicant proposes Subsidence and Induced Seismicity Monitoring Programs to detect subsidence as a result of drilling activities. This would ensure that subsidence would not be tolerated to the degree that it could endanger the facility, offsite structures, and the shoreline. Also, an Induced Seismicity Monitoring Program would be designed to detect seismic activity that might result from drilling activities. The security system for the ongoing operation of the Proposed Oil Project in Phase 4 would be installed and initiated during Phase 3. Security on the Project Site would be provided by onsite personnel and a site security program that would include a Closed Circuit Television System, a gate access system, and an intrusion and motion detection system. The security system would Section 2: Project Description Exhibit B control all access to and from the Project Site. During the final design of the Proposed Project and submission of plans to the appropriate agencies for permits, the following plans and programs would be developed by the Applicant as part of the facility drilling and operations phases (Phase 2 and Phase 4 activities): Odor Minimization Plan; Air Monitoring Plan; Fire Protection Plan; Safety and Environmental Management Program; Mechanical Integrity Program; Hazardous Materials Business Plan; Subsidence and Induced Seismicity Monitoring Programs; Noise Monitoring Plan; Quiet Mode Drilling Plan; and Various plans related to grading, equipment design, electrical design, landscaping, etc. Safety devices would be installed within the piping, vessels, and tanks in the processing system. Safety devices would provide early warning, corrective action, or shut down of a specific segment of the system or the entire facility, if necessary. A number of safety devices are required or recommended by codes, standards and regulations, including: High level warning systems; High pressure warning systems; Automatic shutdown valves; Vessel and pipe design requirements; Vapor recovery and component leakage limits; and Fuel contaminant limits. Detailed piping and instrument diagrams would be provided by the Applicant during the detailed permitting stages, and reviews of the final design would be undertaken at that time. Specific measures to reduce the risk of hazardous material releases are addressed in Section 4.8, Safety, Risk of Upset, and Hazards. Phase 4 Hazardous Materials The operation would require the use of hazardous chemicals. The chemicals would be stored Section 2: Project Description Exhibit B onsite with secondary containment. The chemicals would be documented in a required Hazardous Materials Business Plan and submitted to the Los Angeles County Fire Department as the Certified Unified Program Agency (CUPA) and the Hermosa beach Fire Department. Typical chemicals utilized in the permanent production facility and the maximum quantities that would be onsite at any time are listed in Table 2.12. Hydrogen Sulfide The Applicant indicates that low levels of potential “native” H2S, in the order of 0.0 to 6.0 parts per million (ppm), may be encountered in the gas produced from the underlying oil reservoir. In order to have the capability to treat higher levels, the Proposed Oil Project has been planned to treat H2S levels of 15 ppm and has a maximum design capacity to treat H2S levels of up to 100 ppm. After treatment with the SulfaScrub system, the H2S levels of the gas would be reduced to less than 4.0 ppm. SCG’s specifications limit the H2S concentrations in gas delivered to the meter from a producer to less than 4.0 ppm. The Proposed Project provides for the disposal/injection of treated produced water from the drilling and production process back into the oil reservoir using water disposal/injection wells. Untreated produced water can result in the creation of H2S concentrations in the reservoir above the existing levels in the oil reservoir (referred to as the “native” condition). Prior to the disposal/injection of produced water from the oil extraction process, surface runoff from precipitation that collects on the Project Site, or any additional injected water, the water would be treated by a biocide to eliminate sulfate-reducing bacteria (SRB). Once wells begin production, the extracted water would be tested for SRBs to determine if treatment is needed. In addition, the surface runoff and additional water would be tested. SRBs are an assemblage of specialized bacteria that thrive in the absence of oxygen and obtain energy for growth by oxidation of organic nutrients, with sulfate being reduced to hydrogen sulfide (H2S). SRBs are treated by the use of a biocide and this treatment could be a batch or continuous treatment. There are numerous antibacterial agents available on the market that could be used for this specific treatment if it is determined to be needed. Table 2.12 Phase 4 Drilling Chemicals Common/Trade Name Use Maximum Quantity Onsite (Gallons) Odorant/Mercaptan Odorize the sales gas 500 H2S Scavenger/Pertrosweet Gas treatment for H2S 9,000 Section 2: Project Description Exhibit B Table 2.12 Phase 4 Drilling Chemicals Common/Trade Name Use Maximum Quantity Onsite (Gallons) HSE700 Emulsion Breaker/Phasetreat 6378 Help separate oil and water 60 Water Clarifier/Floctreat 7991 Water additive 40 Emulsion Breaker/Waxtreat 3610 Help separate oil and wax 50 Corrosion Inhibiter Cor7182 Additive to reduce corrosion 400 Surface Cleaner/4U General purpose cleaner 165 Scale Dissolver/Techni Solve 1780 General purpose scale remover 55 Scale Inhibitor/Techni Hib 7621 Additive to reduce scaling 120 Glycol/TEG Gas treatment for water removal 55 Amine/DEA Gas Treatment for H2S removal 110 Methanol For oil treatment 55 Biotreat 8415 Water treatment prior tore- injection 55 Hydrochloric Acid 15%, used for acid washing during completion Varies Hydrofluoric Acid 3%, used for acidizing muds Varies Note: Project Application, Amendments and Appendices 2.4.5.2 Phase 4 Schedule It is anticipated that Phase 4 would occur for a period of approximately 30 to 35 years, as indicated in the schedule provided in Table 2.13. The drilling of the remaining wells would occur during the first 30 months of Phase 4, with periodic re-drills thereafter for the life of the project (averaging 30 days per year with a maximum of 150 days in one single year). The permanent production equipment would operate 24 hours a day, seven days per week. The Section 2: Project Description Exhibit B Project Site would be staffed 24 hours a day, seven days per week. Section 2: Project Description Exhibit B Table 2.13 Phase 4 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 through 131 132 133 134 135 Life of Project Deliver and Set up drill rig Drill remaining 30 wells Remove drill rig Remove 32-foot noise wall Facility operations and maintenance Continuous Re-drills Avg. 30 days/yr Max 150 days/yr* Well workovers Max 90 days per year Source: Project Application, Amendments and Appendices. To re-drill a well, a drilling rig similar to the one initiallyused to drill the wells would be used with the same setup, drilling and removal procedures. Workovers would use an 110-foot tall truck mounted drilling rig and would be conducted a maximum of 90 days per year. * This is the maximum number of days per year proposed by the Applicant. The 150 days per year is predicted to occur once every 5 years. Most likely re-drill activity would be lower. 2.4.5.3 Phase 4 Vehicle Requirements The number of vehicles estimated by the Applicant to be necessary for Phase 4 operations are provided in Table 2.14. During drilling, parking for Project employees would be provided as previously described under Section 2.4.1.1, Phase 1 Construction Activities, under the subsection Clearance of the Project Site. Parking for Project employees would be provided on the Project Site after the drilling of all the wells is completed and the drill rig has been removed from the Project Site. 2.4.6 Parking Requirements The Proposed Project construction and operation activities would result in increased parking demand. The elimination of existing parking would also make necessary the replacement of spaces lost. Parking requirements addressed in this FEIR include the following: Temporary parking for a maximum of 40 Project employee vehicles, varying between Section 2: Project Description Exhibit B approximately 20 and 40 employee vehicles during construction and/or drilling activities in Phases 1-4, excluding ongoing production in Phase 4; Long-term parking for four Project employees during the ongoing operation of the Proposed Project and four additional spaces for maintenance workers in Phase 4; Exhibit B Replacement of 15 parking spaces currently located at the City Maintenance Yard that supply free remote public parking on weekends under the City’s Preferential Parking Program approved by the Coastal Commission. These spaces are used by: Maintenance Yard employees during working hours (i.e., Monday through Thursday from 7:00 a.m. to 6:00 p.m. excluding holidays) and by the public at other times; and Replacement of two on-street public parking spaces that would be eliminated by improvements to the southwest corner of 6th Street and Valley Drive. These spaces are not part of the City’s Preferential Parking Program. Table 2.14 Phase 4 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day 2-axle Trucks, Autos, Maximum RT/day Total, Maximum RT/day Deliver and Set up drill rig 6 20 26 Drill remaining 30 wells 12 11 23 Remove drill rig 5 20 25 Remove 32-foot sound wall 4 8 12 Facility operations and maintenance 5 13 18 Well workovers/Major Maintenance 4 14 18 Greatest number of trips in one day 17 (during drilling ) 34 (during drilling) 44 (during drilling) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum activity occurs during drilling of wells with facility operations and maintenance. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simple addition of the two. See Appendix A. Re-drilling would produce the same level of traffic as traffic produced during drilling activities. Exhibit B See Appendix A for details regarding vehicles, employees, trucks and construction equipment necessary for Project operations each week. Source: Project Application, Amendments and Appendices In order to comply with the City’s Preferential Parking Program and Coastal Development Permit requirements and be consistent with the City’s Coastal Land Use Plan (titled Local Coastal Plan) policies,, 17 public parking spaces would have to be generated under the Proposed Oil Project to replace the 15 parking spaces removed at the current City Maintenance Yard and the 2 on-street public parking spaces removed from 6th Street, Table 2.15 provides the Applicant’s assessment of parking demand for each phase of the Proposed Oil Project and the Applicant’s proposal for the development of the required parking as a component of the Proposed Oil Project. As indicated in Table 2.15, Phases 1, 2, and 3 and the drilling portion of Phase 4 would require temporary offsite parking. Exhibit B Table 2.15 Proposed Oil Project Parking Requirements Phase and Peak Activities Peak Number of Employees Number of Offsite Parking Spaces Needed Comments Phase 1: construct fence, wells cellar and install electrical service 27 20 Some employees would park onsite and others would use temporary parking lot. Phase 2: Install equipment and drill test wells. 22 12 Two 5 person shifts for drilling, some carpooling assumed. Phase 3: Construct wall, remove soundwall, construct onsite facilities 30-60 40 Peak employees occurs for constructing onsite facilities. Assumes some carpooling. Phase 4: Drilling and Operations 10 4 5 persons per shift with 2 shifts per day. Carpooling is assumed. Phase 4: Operations Only 2-4 0 No offsite parking needed. Source: Applicant submittals January 2014 The following information summarizes E&B’s proposal in the Project Application to meet parking demands. Cypress Parking Lot: Parking for 20 employees during temporary construction and drilling activities during Phases 1, 2, 3, and the drilling portion of Phase 4 would be provided in an offsite temporary parking lot to be developed at 636 Cypress Avenue adjacent to the western Project boundary (referred to as the temporary parking lot). The Applicant states it has entered into an agreement with the current owner of the subject property at 636 Cypress Avenue (Assessor Parcel No. 4187-031-22) for this use. Access to the parcel is provided from Cypress Avenue. While adjoining the Project Site at 555 6th Street, the temporary parking lot will not be accessible from the Project Site due to an elevation difference between the properties and the need for secured points of entry onto the Project Site. Exhibit B The 6,000-square foot parcel at 636 Cypress Avenue is a relatively level property. Itis currently developed with a single-story building that occupies approximately 75 percent of the parcel and a parking lot with approximately 6 parking spaces. The development of the parcel would comply with all City requirements. Development would require demolition of the existing building, removal of the current asphalt parking area, and minimal grading. The Cypress Parking Lot would be completed before the commencement of construction activities to occur under Phase 1 Site Preparation of the Proposed Project. Improvements that would be made to the new 60-foot by 100-foot parking lot with 20 parking spaces would include drainage, landscaping with irrigation, lighting, a trash container, and other elements to comply with the City of Hermosa Beach Municipal Code. Details of the redeveloped parcel are shown in Figure 2-18. The Applicant has requested that the City supply the required 17 replacement spaces as part of the City Maintenance Yard relocation. If the No Added Parking option is constructed, then the 17 spaces would be provided on a temporary basis at the proposed temporary parking lot at 636 Cypress Avenue and on a permanent basis as indicated below.. The City has not agreed to supply any replacement spaces regardless whether the Parking option or No Added Parking option were to be constructed Additional 20 Temporary Parking Spaces (Phase 3):During peak construction activities in Phase 3, parking for a maximum of 20 temporary parking spaces, in addition to the 20 temporary parking spaces provided at the off-site temporary parking area at 636 Cypress Avenue , would be provided at one or more sites, not yet identified, that would be leased or rented by the Applicant. Employees would walk to or be shuttled to the Project Site. The Applicant proposes to ensure to the City, through the submittal of any required documentation, that the parking spaces would be available during the temporary construction and drilling activities for the Proposed Project. If spaces are “remote,” located farther than 5 to 8 blocks from the Project Site as defined by the Applicant, a van pool shuttle service from the remote parking spaces would be provided to the Project Site by the Applicant. The Applicant proposes to obtain all required approvals and entitlements from the City and to make any required modifications to conform with City codes, identified as mitigation measures in the certified EIR, and any other requirements that may be imposed as a result of the Development Agreement or ballot measure. Construction Vehicle Parking (Phases 1-4 excluding permanent operations): The Applicant Exhibit B indicates that it has an agreement to utilize the below-ground parking area at 601Cypress Street for non-hazardous equipment storage and construction vehicle parking. Parking for construction vehicles and staging would be provided both at the Project Site at 555 6th Street and within the building at 601 Cypress Street during Phases 1-4. Parking for Ongoing Operations in (Phase 4): The long-term parking for a maximum of four Project employee vehicles during ongoing operations and maintenance will be supplied by four marked parking spaces on the Project Site at 555 6th Street. Additional parking required for maintenance activities for ongoing operations would also be accommodated onsite along the perimeter wall as indicated in Figure 2-18. No additional offsite parking would be required for long-term Project operations. Replacement of Spaces Eliminated by the Project: Fifteen parking spaces at the Project Site at 555 6th Street are used by City Maintenance Yard employees during working hours of Monday through Thursday from 7:00 a.m. to 6:00 p.m. excluding holidays. These spaces also supply free remote public parking on weekends under the City’s Preferential Parking Program, approved by the Coastal Commission, and are otherwise used by the public when available. The Application proposes to replace 15 spaces for free remote public parking in the offsite temporary parking lot at 636 Cypress Avenue on a temporary basis and as indicated below on a permanent basis. The City would be responsible to supply parking for its Maintenance Yard employees as part of its City Maintenance Yard relocation plan. Two on-street public parking spaces would also be eliminated by Project improvements to the southwest corner of 6th and Valley Drive; these spaces are not part of the City’s Preferential Parking Program. The Application proposes to replace these two spaces in the offsite temporary parking lot at 636 Cypress Avenue on a temporary basis and as indicated below on a permanent basis. The Application indicates potential overlap with onsite employee scheduling during the drilling portion of Phase 4, requiring four parking spaces at 636 Cypress Avenue to be vacant as one shift arrives and another shift is leaving. This results in the availability of 16, rather than 17, parking spaces for a period of approximately one hour. The Application indicates that relocation of the 17 public parking spaces requires a coordinated approach between the Applicant and the City and proposes that this relocation be governed by the Lease Agreement (Section 13). The Applicant proposes the relocated City Maintenance Yard be developed in a manner which could supply the permanent public parking spaces on weekends Exhibit B and at night, similar to the way in which the existing parking spaces at the current City Maintenance Yard are utilized. If the relocation of the City Maintenance Yard does not become the location for the permanent public parking spaces, then the Applicant proposes to provide 15 replacement public parking spaces as well as the additional 2 public parking spaces, prior to the commencement of Project operations, at the offsite temporary parking lot at 636 Cypress Avenue or to provide other suitable public parking spaces consistent with requirements of the City’s Preferential Parking Program, the California Coastal Act, and a framework proposed by the Applicant. 2.4.7 Project Life and Decommissioning Under the Proposed Oil Project, the oil and gas resources would be developed until they are depleted and developing them is no longer economically viable, for up to 35 years. Currently, the amount of crude oil that could be produced from the field is unknown, and future crude prices are difficult to assess. According to the Lease Agreement, the Proposed Oil Project could operate for up to 35 years. Figure 2.19 shows the estimated crude oil, gas and water production for the life of the Proposed Oil Project. If during Phase 2 the Applicant does not consider the level of production from the Project Site to be economically feasible, then decommissioning of the installed equipment would commence. Decommissioning would involve the removal of the drilling and temporary testing equipment and would include abandonment of wells according to the Division of Oil, Gas and Geothermal Resources (DOGGR) requirements. The Project Site would be left as a graded site with site improvements including the retaining walls, the perimeter chain link fence, and the perimeter landscaping. At the end of the Proposed Oil Project, when the owner applies to DOGGR and to the City to abandon the facility, a separate permit process and CEQA environmental review would be required to evaluate decommissioning of the entire Project Site. Since the timing of the decommissioning is unknown, the Applicant has not submitted a detailed decommissioning plan, and therefore any assessment of decommissioning activities would be speculative at this time. Exhibit B Figure 2-18 Cypress Parking Area Source: E&B Updated Parking Plan 1/8/2014 Exhibit B Figure 2.19 Estimated Production Levels Source: Based on Applicant submitted estimates 2.4.8 Project Scheduling Summary Under the Proposed Oil Project, there are a number of different activities with various allowances for time of day, day of week and annual limits. These are summarized in Table 2.16. Table 2.16 Proposed Oil Project Scheduling Summary Activity Allowed Period Annually Days and Hours per Day Workover Rig Maximum 90 days per year 8 am - 6 pm weekdays only Drilling Rig Phase 2 - 120 days 24 hours per day Exhibit B Phase 4 - 30 months Re-drills 30 days per year average, up to 150 per year max 24 hours per day Phase 1 and Phase 3 Construction Any 8 am - 6 pm weekdays and 9 am - 5 pm Saturdays Offsite ROW Construction Any 8 am - 3 pm weekdays only in the City of HB Truck deliveries Any 9am - 3 pm weekdays or emergencies Quiet mode drilling Phase 2 and Phase 4 Drilling, Re-drills 7 pm - 8 am Pipeline construction activities Phase 3 9 am - 3 pm weekdays. Exhibit B Exhibit C EXHIBIT “C” PUBLIC BENEFITS OF PROJECT With the approval of the Project by the voters of the City, the public benefits of the Project provided by the Lease include: a) the royalties as further described in the Lease in amounts estimated both by E&B and the City’s independent consultant, Kosmont Company, as described in the Cost Benefit Analysis, and b) the minimum annual royalty of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled as further described in the Lease (“Minimum Royalty”). In addition, and as consideration for the benefits provided to E&B through the approval of this Agreement by the voters of the City, E&B has agreed to provide the additional public benefits as follows: 1) Accelerated Uplands Royalty Payments Commencing with Issuances of City Drilling Permit for First Well: E&B shall pay to the city a non-refundable, accelerated, royalty payment for future production revenues allocated to the City's Uplands under the Lease of One Million Dollars ($1,000,000), starting on the date of the issuance by the City of the drilling permit for the first well and continuing on the anniversary of that date until the Minimum Royalty payment in the Lease commences (“Accelerated Royalty Payment” or collectively, “Accelerated Royalty Payments”). For clarity, this period is estimated to continue for approx. 5 years and total Five Million Dollars ($5,000,000). The Accelerated Royalty Payments are not restricted, and may be used in accordance with applicable City laws. The Advance Royalty Payments are being advanced only against the 11 2/3% Uplands Royalty Percentage, as defined in Paragraph 1(a) of Exhibit B of the Lease. The Accelerated Royalty Payments shall be repaid by the City from the aforesaid Uplands Royalties without interest. Subject to the foregoing conditions, for purposes of repayment, the Accelerated Royalty Payments shall otherwise be subject to the repayment mechanism set forth in Section 13.d(4) of the Lease. If Uplands Royalties are not sufficient to repay the Accelerated Royalty Payments, then the City is not required to repay the Accelerated Royalty Payments. 2) Bonus Payments During Years 4-13 of the Lease to Ensure $1,000,000 Royalty Amount: The Lease provides for a “Minimum Royalty” of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled and continuing to the 13th anniversary of the first well’s completion date (“Years 4-13”). If all royalties, both Uplands Royalties and Tidelands Royalties, as specified in Exhibit B to the Lease, paid to the City during Years 4-13 do not exceed One Million Dollars ($1,000,000), E&B shall pay to the City an additional bonus amount equal to the difference between the Minimum Royalty and One Million Dollars ($1,000,000) (“Bonus Exhibit C Payment”). For clarity, given that the Minimum Royalty is Five Hundred Thousand Dollars ($500,000), this Bonus Payment would be an additional amount of up to Five Hundred Thousand Dollars ($500,000), for a total of One Million Dollars ($1,000,000) annually. The Bonus Payments are not restricted, and may be used in accordance with applicable City laws. The Bonus Payments are bonuses to the City as Lessor under the Lease, are designed to be an additional benefit to the City pursuant to this Development Agreement, and shall not be considered royalties or otherwise subject to the allocation formula under Exhibit B of the Lease. 3) Additional Payment During Years 4-13 To Ensure $1,000,000 Minimum Amount: The Lease provides for a Minimum Royalty of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled and continuing to the 13th anniversary (“Years 4-13”). If royalties provided to the City during Years 4-13 do not exceed One Million Dollars ($1,000,000), E&B shall pay to the City an additional amount equal to the difference between the Minimum Royalty and One Million Dollars ($1,000,000). For clarity, given that the Minimum Royalty is Five Hundred Thousand Dollars ($500,000), this payment would be an additional amount of up to Five Hundred Thousand Dollars ($500,000), for a total of One Million Dollars ($1,000,000). 4) Remediation of City Maintenance Yard: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of the Project, E&B shall implement the proposed Remedial Action Plan as described in Exhibit B to this Agreement in Phase 3 of the Project; however, if E&B determines as a part of Phase 2 not to proceed with Phase 3 of the Project, then E&B shall conduct any necessary remediation activities at the Project site to allow the site to be used for industrial or commercial purposes (e.g., City maintenance or commercial activities), in a manner consistent with its obligations under the Lease, the Settlement Agreement and this Agreement. E&B shall not be obligated to remediate the property for any other future uses, such as commercial or residential uses. [If voters do not approve ballot measure, this document would not be vehicle for determining clean-up, but in any case, E&B is will not remediate site if project is not approved.] 5) Relocation of City Maintenance Yard: If the voters approve the Project, the City may determine to relocate the City Maintenance Yard to a temporary location and then to a permanent location or alternatively, to relocate the City Maintenance Yard directly to a permanent location, without a temporary location. With respect to either of these options, E&B agrees as follows: a. $3.5 Million Forgiven Upon Issuance by City of Drilling Permit for First Well: Upon the issuance by the City of the drilling permit for the first well, Exhibit C the City shall not be required to repay the Three Million Five Hundred Thousand Dollars ($3,500,000), plus interest, to E&B as further described in Section 4.6.b of the Lease. b. $6.5 Million Advance for Permanent Relocation: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of the Project, then E&B shall advance Six Million Five Hundred Thousand Dollars ($6,500,000) to the City for the permanent relocation of the City Maintenance Yard. 6) Hermosa Beach Residential Property Fund: Purpose: To provide owners of residential properties within 600 feet of the Hermosa Beach Oil Recovery Project (Project) with assurance that they will incur no loss, as a result of the Project, to their property’s fair market value (Market Value), in the event of a sale of their property. Such assurance is offered through voluntary participation in a Hermosa Beach Residential Property Fund (Fund). Offer: The Fund will pay the difference between an eligible property's actual negotiated sale price and the appraised Market Value of the property, which will be determined as if the Project had not been built. A predetermined independent appraisal process will demonstrate if there is a loss in the Market Value of an owner's residential property. Participation: Participation in the Fund is entirely voluntary. Eligibility: Owners of residential properties that are located within the “eligibility area” (within 600 feet of the Project, measured property edge to property edge) are eligible to participate. The claim must be made by the then current owner of the property and only one claim per property will be allowed; however, the owner need not own the property when the Fund commences in order to be eligible for a claim. By way of example only, if the original owner of the property does not make a claim in connection with its sale to a buyer, then so long as the sale occurs during the Fund term, the buyer would automatically succeed to the rights of the selling property owner with respect to the Fund, including the right to make any claim, subject to the other requirements for participation in this Fund. Costs: There is no monetary cost to participating residential property owners to receive the benefits of the Fund, now or in the future. All costs, including the costs of obtaining required appraisals, are paid by the Fund. Cap: There will be a $25,000,000 cap (Funding Cap) on the total amount of benefits that the Fund can pay out. Term: The Fund will commence upon issuance of the City Drilling Permit for First Well by the City of Hermosa Beach and will continue in effect until the first to occur of (a) six years from commencement of the Fund, or one year after the Exhibit C completion of the final Project well, whichever is later, or (b) the entire Funding Cap has been disbursed to eligible residential property owners. The six-year aspect of the Fund term described in subpart (a), above, will be extended consistent with any extension of the term of the Development Agreement in accordance with Section 6.24 of the Development Agreement. Administration: E&B Natural Resources (E&B) will establish the Fund and designate a qualified, independent Fund Administrator. The Fund Administrator will not be an officer, employee, or affiliate of E&B. Application: To receive benefits, a selling owner of a residential property within the eligible area will submit to the Fund Administrator: (1) a signed Program Participation Agreement setting forth the terms of the Fund program (Program) and a signed claim form; (2) a copy of an accepted written offer to purchase the residence on arms-length terms from a buyer who is not related to or affiliated with the selling residential property owner and that complies with the Program requirements; and (3) a current (dated not earlier than six months prior to the property owner’s application) appraisal reflecting the Market Value of the property, which will be determined as if the Project had not been built. The appraisal must be prepared by an MAI or RM designated appraiser who is licensed in California and has at least five years of experience appraising similarly-situated residential properties in the South Bay region of Los Angeles County, California. The owner will not be required to execute a general release of claims but will be obligated solely to release claims pertaining to loss of property value. Benefits: Within 14 calendar days after receiving a selling residential property owner’s application materials, the Fund will either agree to pay the amount of the claim, or obtain another appraisal of the residential property using the same criteria as the owner's appraisal. If the Fund obtains an alternate appraisal and the difference between the two appraisals is within 10% of the higher appraised Market Value, the Market Value for purposes of the residential property owner’s claim on the Fund will be equal to the average of the two appraised Market Values. If not, a third appraiser will be selected by the first two appraisers, and the Market Value determination in the third appraisal will be deemed the Market Value of the property. The owner and the Fund will be conclusively bound by the third appraisal. The difference between the Market Value of the residence, as so determined, and the property’s actual negotiated sale price will be paid by the Fund to the selling homeowner either at closing or within 10 calendar days after the Market Value of the residence has been determined, whichever takes place later. Market Value: Each appraisal obtained will determine the Market Value of the homeowner’s residential property as of the date of the appraisal and as if the Project had never been built. Exhibit C Claims: By submitting a claim to the Fund, the homeowner agrees to be bound by the terms of Program, and to accept reimbursement from the Fund for a loss in the Market Value of the owner’s residential property in exchange for foregoing any legal action to receive compensation for a decrease in the Market Value of the owner’s residential property that is caused by or results from the Project. Any offer that a participating owner enters into for sale of its residence must disclose that E&B has a right of first refusal to purchase the property for a price equal to the Market Value determined by the appraisal process without incurring any broker's commission. Any claim against the Fund must be submitted before the sale of the eligible residential property is completed; no claim will be considered or paid by the Fund after the closing of the sale of the residential property. Funding: E&B will ensure that, at all times during the Fund term, there is a minimum balance of $1,000,000 in the Fund, and E&B will ensure that at least $1,000,000 is in the Fund upon expiration of the six-year Fund term. E&B will regularly replenish the Fund up to the Funding Cap, as and if disbursements are made, to ensure that the Fund has readily-available funds to satisfy potential claims asserted by owners of eligible residential properties under the Program. E&B will also provide additional funding totaling a maximum of $4,000,000 from contributions based on 1.5% of gross project revenues on an annual basis until either a total of $4,000,000 has been contributed to the Fund from gross project revenues or the Funding Cap has been reached. Distribution: E&B will ensure that upon expiration of the Fund term, the Fund will have a remaining balance of at least $1,000,000 and up to a maximum sum of $5,000,000, depending on the total amount of claims that have been made against and paid by the Fund. The remaining amount in the Fund at the end of the Term shall be distributed to the then current owners of all otherwise-eligible residential properties located within 300 feet of the Project for which there has not previously been made any claim. The owner of each such residential property will be entitled to an equal, pro rata share of the amount remaining in the Fund at the end of the Fund term (after all appraisal costs and other Fund administrative expenses have been deducted). The pro rata share of the Fund balance to which each owner will be entitled will be based on the total number of properties entitled to share in the distribution. By way of example only, if at the end of the Fund term, there are 60 residential properties within 300 feet of the Project for which no claim has been made against, and no distribution received from, the Fund, then the owner of each such residential property will be entitled to 1/60 of the amount then remaining in the Fund after all appraisal costs and other Fund administrative expenses have been deducted. Exhibit C Exhibit D EXHIBIT “D” CONDITIONS OF PROJECT APPROVAL Exhibit D includes: 1. Exhibit D-1 Conditions of Approval from 1993 Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93-5632 (CUP to be abandoned and superseded by this agreement) 2. Exhibit D-2 Additional Project Conditions 3. Exhibit D-3 Mitigation Measures/Mitigation Monitoring Plan- from Section 8.0 of Final Environmental Impact Report (as revised at Hermosa Beach City Council certification hearing on July 8, 2014 per Resolution 14-6908). Exhibit D Exhibit D-1 Exhibit D-1 Conditions of Approval from 1993 Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93-5632 (CUP to be abandoned and superseded by this Agreement) (Amendments to conditions necessary for consistency with Project Description, Mitigation Measures and other conditions and terms are reflected herein) SECTION 1. GENERAL 1. The testing phase for all production shall be a maximum of one year from the date drilling is initiated. 2. A minimum of one annual site audit shall take place to inspect for soil contamination as a result of accidental spills in any area not paved and expose. Auditor shall be hired by City. 3. The maximum number of days the work over rigs or any other rig (other than a drill rig) that is to be used on-site shall be 90 days per year, and shall be operated weekdays 8:00 A.M. to 6:00 P.M. excluding holidays. 4. In the event that a residence with solar panels is affected by shading, a site specific study paid for by the oil contractor shall be conducted to determine economic impact. 5. Pursuant to Assembly Bill 3180 the operation shall be monitored for all condition of the approval of which the City has responsibility which includes (but not limited to) noise monitoring and inspection of the site for proper maintenance. 6. The proposed plans shall be submitted to the State Division of Oil, Gas & Geothermal Resources for their review and recommendation; a. Any recommendation by the State Division of Oil, Gas & Geothermal Resources shall be taken into consideration prior to approval, and may be included as condition of approval. 7. Drill cuttings and other wastes, shall be collected in above ground containers and disposed of at an approved disposal site. Receipts for all disposal of waste product shall be provided within ten (10) days of disposal to the Public Works Director. Exhibit D-1 8. All requirements, standards, conditions stated within the oil Production Code, Chapter 21-A, of the City’s Municipal Code shall be met, unless more restrictive requirements are imposed through mitigation measures; where it cannot be clearly determined whether the City’s Oil Ordinance, Chapter 21-A or mitigation measure are more stringent, the appropriate City staff shall make a determination; appealable to the City Council. 9. Three (3) copies of final building plans including site, elevation, and floor plans shall be submitted for review and approval by the Planning Director prior to the issuance of any Building Permit. 10. The proposed development shall be in substantial conformance with submitted plans. Any minor modification shall be reviewed and may be approved by the Planning Director. 11. All wells must be drilled and completed within 55 months from the start of drilling of the first exploratory well in accordance with the following schedule: PHASE 1 SITE PREPARATION 6 MONTHS PHASE 2 DRILLING AND TESTING PHASE 12 MONTHS (Exploratory drilling, production testing) PHASE 3 FINAL DESIGN AND CONSTRUCTION PHASE 14 MONTHS (Permanent facility construction) PHASE 4 DEVELOPMENT AND OPERATIONS (DRILLING) 34 MONTHS (Development Drilling, 1 month per well) If the Drilling Contractor is delayed at any time in the progress of work by any act or neglect of the City of Hermosa Beach or any other governmental body having authority over this project, or by labor disputes, adverse weather conditions, by law, war, riots, strikes, Exhibit D-1 unavoidable casualties, unusual delays in receiving material or equipment or by an act of God, or causes beyond the control of the Drilling Contractor, when justified, the time period may be extended to a reasonable time to correspond with the delay incurred by the Drilling Contractor. SECTION 2. LAND USE 1. The maximum size for any storage tank of any type shall be forty feet in diameter and sixteen feet in height, appurtenances not included. 2. Prior to construction and prior to obtaining building permits for oil production, a complete soil analysis shall be performed and approved by all applicable governing agencies having jurisdiction over the project. 3. Not more than five tanks shall be installed, and shall be submerged in a concrete basin which contains 10% above the volume required by the State Division of Oil, Gas & Geothermal Resources and the Uniform Fire Code which is as follows: the volumetric capacity of the diked area shall not be less than the greatest amount of liquid that can be released from the largest tank within the diked area. The capacity of the diked areas enclosing more than one tank shall be calculated by deducting the volume of the tanks other than the largest tank below the height of the dike. 4. All wells shall be drilled and cemented in accordance with State Division of Oil, Gas and Geothermal Resources regulations to protect underground aquifers. 5. The electrical service systems shall be designed with sufficient capacity to minimize surging impacts. 6. The well cellars shall be concrete lined and shall be designed to hold contaminated run-off from on-site sources; or a sump shall be provided. 7. Solid state control console linked to a control system to perform energy conservation functions such as start/stop time programming of motor equipment, data logging of energy consumption and maintenance and service scheduling shall be provided. a. All Electrical machinery where possible shall have a minimum coefficient of Exhibit D-1 efficiency of 0.75. SECTION 3. PUBLIC SAFETY 1. The site shall be enclosed by a solid masonry or concrete wall with solid gates during all operations, protecting both against public entry, observation and attraction. A chain link fence to provide security is acceptable only through Phases 1 and 2. 2. Security personnel shall be employed at all times during the drilling stage (24 hours) and emergency phone numbers shall be posted during production Phases 2 and 4. 3. Signs warning of unauthorized entry and safety hazards shall be posted on all sides. 4. Access to facilities shall be limited to authorized personnel only. 5. Trees shall be maintained at a distance from all walls to prohibit children and others from unauthorized entry. 6. All site personnel shall be instructed on required safety procedures if hydrogen sulfide concentrations are encountered. Documentation of training and instruction shall be made available to the City Manager. 7. Both solid and liquid wastes shall be sampled and tested to determine if it needs to be treated as a hazardous waste. 8. An Oil Spill Prevention Control Countermeasures (SPCC) Plan and an Oil Drilling Contingency Plan will be Prepared for the Project and approved by the State Division of Oil, Gas and Geothermal Resources, and the City of Hermosa Beach Fire and Building and Safety Departments. 9. Drillsite and production facilities shall be constructed in accordance with the State seismic standards, and designed in accordance with U. B.C. seismic requirements for hazardous facilities. 10. A soils engineering report and engineering geology report prepared by a licensed Exhibit D-1 geologist and engineer shall be prepared and reviewed in conjunction with the plans for all physical improvements. Said report shall address potential seismic hazards, such as liquefaction, due to soils or geologic conditions. All recommendations contained in said reports shall be incorporated in the construction documents. 11. An emergency response plan, including a blowout prevention and control plan, shall be prepared for review and approval by the State Division of Oil, Gas & Geothermal Resources and the Hermosa Beach Fire Department. 12. When a leak or spill occurs, it shall be contained, the fluid shall be recovered and the area restored to its original condition. SECTION 4. FIRE SAFETY 1. Adequate fire detection and fighting equipment and supplies, approved by the Fire Department, shall be maintained on the drillsite and tank production facility at all times. 2. A supplementary analysis by a professional consultant shall be provided detailing any necessary improvements the Fire Department may need to prevent, and to halt oil related fires and shall also include the following: public notification, warning and evacuation plan. 3. Oil sumps, drip pans, etc. shall be cleaned at regular intervals to reduce fire hazards and prevent minor spills. 4. Oily rags, paper and miscellaneous waste shall be disposed of in an appropriate manner to reduce fire hazards 5. Signs warning of flammable fluids and prohibiting smoking shall be installed where appropriate. 6. The drillsite and production facility shall be protected by automatic fire detection sensors and suppression systems. The fire suppression systems shall include a tank- cooling sprinkler system. Exhibit D-1 7. Drilling operations shall be conducted in accordance with appropriate State Division of Oil, Gas & Geothermal Resources regulations and shall utilize all required blowout prevention equipment and safety devices. 8. Fire flows to service the operation shall meet Fire Department regulations. 9. All equipment necessary to contain an oil fire or blowout shall be provided and/or maintained on site and all fire personnel shall be trained on its use. SECTION 6. VEHICLE TRAFFIC AND CIRCULATION ON AND OFF SITE 1. All truck deliveries shall be limited to daylight hours (9:00 AM – 3:00 PM), Monday through Friday, except for an emergency situation, as defined by this agreement and reported to the City in accordance with the notification requirement, which have been reported to the Director of Public Works in advance of the delivery. 2. Operation of earthmoving equipment shall be limited to daytime hours between 8 AM and 6 PM. 3. Equipment deliveries shall be made only during daytime hours between 9 AM and 3 PM. 4. Project related truck travel shall be restricted to specific truck routes and access points as approved by the Public Works Department. 5. Signs shall be installed to direct detour traffic as approved by the Public Works Director. 6. The number of truck trips shall be limited to a maximum of 18 round trips per day, except in an emergency, as defined by this agreement and reported to the City in accordance with the notification requirement. 7. Maintenance Yard site access shall be designed to enable trucks to turn into the site without inhibiting traffic movement on Valley Drive or Sixth Street. 8. Minor curb radii reconstruction shall be done by the operator as determined by the Exhibit D-1 City Public Works depending on the length and necessary turning radii for project related trucks. 9. Area residents shall be notified of pipeline construction prior to commencement. Signs shall be installed to direct detour traffic. 10. All trucks arriving or departing the drill site shall be washed to prevent spillage of earth and all routes shall be swept and washed by the driller as required by the City. 11. An evaluation of the structural condition of the existing pavement shall be performed by a soils engineer on all access streets and the proposed truck routes prior to commencing any site preparation or construction and prior to the issuance of any necessary permits. The evaluation shall include as a minimum: a) the number, type, size and weight of trucks for export of materials or product, b) the number, type, size and weight of truck deliveries of building supplies, drilling supplies etc., c) the number, type, size and weight of equipment transported to the site, d) other associated transportation items, e) other anticipated loading. The evaluation shall contain recommendations as to the actions required to maintain said streets and routes in their current condition throughout the planned development phase, planned production phase, and in the close out phase. 12. The operator shall perform the actions on the existing pavement as recommended by the soils or highway engineer, the operator will hire a licensed contractor and provide street profiles, drawings, and engineering to the satisfaction of the Public Works Department prior to work commencing. 13. The City Council may restrict the use of certain street, alleys, or roadways in connection with the permittee’s operation. In the event any street, alley or roadway is Exhibit D-1 damaged by the permittee’s operations, such damages shall be paid for by the permittee upon demand by the City, and the failure to pay such damages, being the reasonable cost of the repair of any such damaged portions, shall be grounds for the revocation of the permit and the collection of such damages. SECTION 7. SANITARY SEWER 1. Use of sanitary sewer is prohibited, except for the minimal use associated with the office and restroom facilities. Any water from oil production shall be disposed in the four disposal wells. SECTION 8. NOISE /VIBRATION 1. Tripping will be restricted to daylight hours only. 2. Loudspeaker paging systems shall be prohibited. 3. Well workover rigs or any other rig that is used shall be operated only between the hours of 8:00 A.M. and 6:00 P.M. during daytime weekday hours only, excluding holidays, except in an emergency, as defined herein and reported to the City in accordance with the notification requirement. The exhaust and intake of the diesel engine (if used on the workover rig) shall be muffled to reduce noise to an acceptable limit. The operator shall use whatever means necessary, including but not limited to, enclosing the diesel engine and rig in acoustic blankets or housing. 4. All oil maintenance equipment, vehicles and non-electrical motors shall be equipped with manufacturer approved mufflers or housed in a sound-proofing device. 5. Noise monitoring shall be conducted under the supervision of an independent certified acoustical engineer paid for by the permittee. Reports shall be submitted to the Planning Director within three working days after the completion of each phase of the monitoring. The monitoring shall include the following: a. Pre-drilling phase monitoring. Prior to the start of the drilling phase, noise measurements shall be obtained during the operation of the specific drilling rig which has been selected and the measurements shall be related to those Exhibit D-1 experienced at the nearest residential boundaries to the drilling site. In addition, the noise control measures which have been (or will be) applied to the rig as needed for compliance with the City of Hermosa Beach noise ordinances shall be identified. b. Start of Drilling. Noise measurements shall be obtained during the nighttime hours (10:00 P.M. to 7:00 A.M.) for at least six hours on each of the three nights within the five day period from the start of the drilling phase. Monitoring is to occur at the nearest residential boundary to the actual drilling operation. c. During the drilling phase. Noise monitoring shall occur during a six-hour period between the hours from 10:00 P.M. to 7:00 A.M. at least once each month during the drilling phase of the project. The noise level data obtained shall be compared to the City of Hermosa Beach Noise Ordinance standards by the Planning Department. Where an exceedence of the standards is identified, noise control measures shall be required. Production phase. Noise measurements shall be obtained during a six-hour period between the hours from 10:00 P.M. to 7:00 A.M. at least once each year during the production and completion phase.SECTION 9. LANDSCAPING 1. A Detailed Landscape Plan for Phases 2 (exploratory drilling and testing) and Phase 4, indicating the type, size and quantity of plant materials shall be submitted to the Planning Commission, and shall comply with Section 21A-2.9 of the Oil Code. 2. During Phase 2, test facility, landscaping consisting of 24” box, or larger size trees may be installed without permanent planting. 3. Minimum 24” boxed trees for Phases 2 and 4 shall be adequate in size to create a buffer effect to obscure visibility of oil production activity. Permanent trees planted around the perimeter of the site for Phase 4 shall be a minimum sixteen (16) feet high at planting. 4. Trees along the lot perimeter shall be provided to create a dense landscape buffer to the satisfaction and field review of the Planning Director. Exhibit D-1 5. The aesthetic impact of the exposed masonry walls on the west and northern sides shall be softened with the planting of climbing vines to the satisfaction and review of the Planning Director. 6. Landscaping shall be maintained in a neat and clean condition. 7. A complete automatic sprinkler system shall be provided prior to commencement of Phases 2 and 4. SECTION 10. AESTHETICS 1. The tanks, acoustical wrap and wall, and production facility shall be painted a neutral color to blend in with in with the surroundings; color shall be reviewed and approved the Planning Commission. 2. The use of architectural lighting beyond safety and security requirements shall be prohibited. 3. The site for drilling equipment and the storage facilities shall be depressed in combination with walls so that the visual impact is minimized. 4. All outdoor lighting shall be shielded and directed inward of the site. 5. Lighting shall be limited solely to the amount and intensities necessary for safety and security purposes. 6. Certain activities which might involve unshielded lighting (i.e., site preparation and restoration) activities shall be limited to daylight hours and thus not require nighttime lighting. 7. A wall maintained graffiti free of a minimum of 12 feet in height shall be provided; wall materials shall be reviewed and approved by Planning Director. During test drilling minimum 6’high fencing shall be provided. See Mitigation Measures for Noise and Vibration in D-3 below for additional requirements for this wall. Exhibit D-1 8. Tanks shall be submerged 6 to 8 feet or more below grade and will be adjacent to the 35-foot high privacy wall. 9. If the drill derrick remains idle for more than one year, review and approval by the City Planning Commission or the City Council shall be required, or the derrick shall be dismantled at the expense of the operator. 10. All production equipment and structures shall be painted to blend with the surrounding environment with review and approval by the Planning Director. 11. On-site signs shall be limited to those needed for public health and safety. 12. All derricks masts hereafter erected for drilling, re-drilling or remedial operations or for use in production operations shall be removed within 45 days after completion of the work unless otherwise ordered by the Division of Oil, Gas & Geothermal Resources of the state. 13. The operator shall diligently and continuously pursue drilling operations until the all 30 oil wells and all four (4) water disposal wells are completed or abandoned to the satisfaction of the Division of Oil, Gas & Geothermal Resources of the state and upon completion or abandonment shall remove all drilling equipment from the drill site within 45 days following completion or abandonment of the well unless otherwise ordered by the Division of Oil, Gas & Geothermal Resources. SECTION 11. ODORS/VAPOR/AIR POLLUTION 1. A vapor recovery system shall be installed to recover 99% of hydrocarbon emission during storage and transfer of crude oil. 2. Raw gas shall not be allowed into the atmosphere. 3. Gas and vapor detection systems shall be installed at appropriate locations. 4. All project site activities shall be conducted such as to eliminate escape of gas in accordance with best available control technology and practices which shall be reviewed and approved by the City. Exhibit D-1 5. All requirements of AQMD shall be met at all times. 6. A state-of-the-art scrubber shall be employed for the exploratory phase to eliminate odors from waste gases, and any flame shall be enclosed. 7. Tanks shall be designed and located so that no odors or fumes can be detected from the adjacent areas outside the exterior walls of the project. 8. Operators shall not blow lines to the atmosphere, except in an emergency, as defined below in Section 14. and reported to the City in accordance with the notification requirement. 9. Construction equipment and vehicles shall be maintained in proper tune. 10. Odorless drilling muds shall be used. 11. Well tubing and rods shall not remain out of the well during workover operation less than 8-hours. The tubing will be surface washed with a detergent solution to remove odor bearing residual hydrocarbons if exposed longer than 8-hours. 12. Odor control will be further enforced by the SCAQMD under Rules 402, 466.1 of their regulations, and the commercial recovery system shall be employed for the permanent facility. 13. There shall be no open flames allowed. 14. The permittee shall monitor drilling mud during drilling on the site for odorous substances and take such measures to eliminate any odor which would be perceptible outside the drill site. 15. The permittee shall undertake no refining process or any process for the extraction of products from natural gas, except for such minor processeds as necessary to make natural gas acceptable to the City gas mains for domestic use. [correction of typo] 16. Well cellars shall be maintained in a clean and efficient manner to prevent waste accumulation and shall be frequently steam cleaned. Exhibit D-1 SECTION 12. GRADING/STORM WATER/SITE RUNOFF 1. Grading shall not be performed when wind speeds exceed 20 mph. The contractor shall maintain a wind speed monitoring device on site during grading operations. The contractor shall continually keep the soil moist during grading operations. At no time shall any dust be allowed to leave the work site. 2. Normal wetting procedures shall be employed during grading. Review and approval of procedure shall be by Public Works Director. 3. Graded surfaces shall be paved or landscaped per approved plan. 4. Project site shall be graded so that all contaminated runoff is collected and treated on-site and disposed of according to all laws. 5. Site shall be graded in a manner so that all hazards or contaminated fluids and runoff are directed toward a cellar and approved pit and disposed of properly. 6. No water from the site shall be allowed to enter the storm drainage system or any public area. 7. No water from the site shall be allowed to surface flow across the public beach. SECTION 13. PIPELINE CONSTRUCTION 1. The pipeline operators shall adhere to all applicable federal, state, regional, and local statutes governing design, construction, operation, and maintenance of the pipelines and related equipment. 2. A detailed pipeline survey shall be conducted in order to locate existing pipelines prior to excavation for pipeline construction. 3. A responsible agent paid for by the applicant shall be present during excavations. 4. Areas of construction and maintenance activities shall be delineated by signs, Exhibit D-1 flagmen, pavement markings, barricades, and lights, as determined by permit requirements of all local agencies. 5. Where pedestrian activities are affected during construction, appropriate warning signs shall be installed and pedestrians will be diverted. Pedestrian access to businesses and residences will be maintained during construction. Special facilities, such as handrails, fences, and walkways shall be provided, if necessary, for the safety of pedestrians. 6. Obstruction of emergency vehicle operations will be partially mitigated by ensuring that providers of emergency services are kept informed of the location, nature, and duration of construction activities so alternate routes can be chosen. It is essential that fire department access is maintained to all buildings adjacent to construction activities. For this reason, a minimum of at least one lane for streets undergoing construction will be kept open at all times, and fire hydrants in construction areas will remain accessible. 7. If public transit stops along pipeline routes need to be temporarily relocated during construction, the applicant shall provide signs directing riders to the temporary stop location. 8. When hauling excavated and waste materials from construction sites, substandard roadways will be avoided and local jurisdiction regulation governing hauling vehicles will be adhered to. 9. Pipeline construction and operation of earth moving equipment shall be limited to daylight hours between 8:00 AM and 3:00 PM and shall not be permitted during weekend periods. Additionally, construction-related trucks should not be operated during peak traffic hours of 7 to 9 AM and 3 to 7 PM. Pipeline construction at major intersections shall be limited to daylight hours between 9:00 AM and 3:00 PM to avoid peak traffic periods. 10. Equipment deliveries shall be made only during daytime hours between 8 AM and 3 PM. 11. In order to reduce visual impacts and possible safety hazards, storage of pipes and Exhibit D-1 other materials, as well as construction equipment, shall not be permitted on any street during non-construction hours. 12. Area residents within 300’ shall be notified about the pipeline construction operation prior to commencement of construction. 13. Detour signs on pipeline construction routes shall be placed at appropriate locations. 14. Steel plates covering pipeline excavation trenches shall be placed to permit traffic movement during non-construction hours. 15. Pipelines shall be designed with ample safety factors, pressure-tested prior to being placed in operation, and monitored for corrosion once in operation. 16. Safety shut-down devices that respond to drops in pipeline pressure shall be incorporated into the project in order to stop the flow of the pipeline contents in case of a pipeline rupture. 17. Groundwater level and land subsidence shall be monitored to insure that pipeline damage does not occur as a result of geologic and hydrologic phenomena. The annual subsidence survey shall include a report to the City on monitoring efforts to insure pipelining damage has not occurred. 18. Pipeline construction along Valley Drive shall be approved by the Director of Public Works prior to issuance of a permit. 19. Pipeline construction shall not occur in the area known as the Hermosa Valley Greenbelt except that the permittee may connect to West Basin Municipal Water District’s existing reclaimed water line for the purposes and as described in Exhibit B to this Agreement. 20. Storage of materials shall not be allowed on the Hermosa Valley Greenbelt. The storage or dumping upon the greenbelt of any materials, construction equipment, debris, oil drilling equipment, drilling rigs, piping, etc., and any and all equipment and vehicles necessary for the construction and maintenance of the pipeline and oil development site shall be prohibited. The use of the greenbelt as a staging area for Exhibit D-1 construction of the oil facility or pipeline shall be prohibited. There shall be no parking or standing of any vehicles on the greenbelt for any time period. 21. Trenches shall be covered during non-working hours to minimize traffic circulation problems. SECTION 14 Definition and notification requirements for emergency situations: I. For purposes of these conditions, “Emergency” is defined as follows: A threat to the health and safety of persons in the surrounding area to the drill site and the following conditions which require immediate action: A. Conditions which could lead to potential spill or well blowout: 1. Entry of oil and gas into the wellbore while drilling, tripping or out of the hole which may be indicated by one or more of the following: a. Pit volume gain b. Well flowing with pumps off c. Flow rate increases with circulation d. Improper hole fill-up on trips e. Sudden increase in drilling rate f. Pump pressure decreases and pump rate increases g. Decrease in returning mud rate h. Sloughing shale i. Changes in mud salinity and/or mud flow properties 2. Lost circulation or loss of ability to circulate 3. Casing or wellhead failure while drilling 4. Stuck pipe and/or equipment during any of the following operations: Exhibit D-1 a. Drilling b. Tripping drill pipe and tools c. Wireline logging d. Drill stem testing e. Running casing f. Perforating and stimulating completion interval 5. Loss of rig power or equipment failure while drilling or tripping. B. Injuries to personnel at the Drill Site C. Conditions which could reduce the stability and safety of the rig and production equipment: 1. Natural events: a. Excessive winds, rain and lightning b. Floods c. Subsidence d. Earthquakes 2. Other events a. Riots/Demonstrations b. Fire II. Notification Required: In the case of an emergency, as defined above, the permittee shall give immediate notice to the City of the occurrence of the emergency event. The City will provide the permittee with a list of phone numbers of City personnel to call for notification purposes. A written notice, including a detailed description of the emergency condition, and the actions take and/or proposed to be taken to correct the situation, shall be provided within 24 hours of the occurrence of the emergency event. SECTION 15 Exhibit D-1 1. Each of the above conditions is separately enforced, and if any of the conditions of approval is found to be invalid by a court of law, all the other conditions shall remain valid and enforceable. 2. The subject property shall be developed, maintained and operated in full compliance with the conditions of this grant and any law, statute, ordinance or other regulation applicable to any development or activity on the subject property. Failure of the permittee to cease any development or activity not in full compliance shall be a violation of these conditions. Exhibit D-2 Exhibit D-2 ADDITIONAL PROJECT CONDITIONS A. GENERAL E&B (herein “Operator”) is the owner and Operator of this project, responsible for implementing and complying with all applicable conditions. A-1 Project Description This Development Agreement, and associated conditions, is based upon and limited to the project described in Exhibit B to the Development Agreement. A-2 Acceptance of Conditions Execution of this agreement shall be deemed as acceptance of all conditions herein and waiver of any objections thereto. A-3 Costs of Implementing and Enforcing Conditions The Operator shall be fully responsible for all reasonable costs and expenses incurred by the City or any City contractors, consultants, or employees, in implementing, monitoring, or enforcing this approval, including but not limited to, costs for permitting, permit conditions implementation, mitigation monitoring, compliance monitoring, reviewing and verifying information contained in reports, undertaking studies, research and inspections, administrative support, and including the fully burdened cost of time spent by City employees on such matters. Draw-Down Account. The Operator shall maintain a draw-down account with the City, from which actual costs will be billed and deducted for the purpose of defraying the expenses involved in the City’s review and verification of the information contained in any required reports or plans and any other activities of the City, including but not limited to: enforcement, permitting, inspection, coordination of compliance monitoring, administrative support, technical studies, and the hiring of independent consultants. The initial amount to be deposited by the Operator shall be $500,000. In the first year, if withdrawals from the Exhibit D-2 account have reduced its balance to less than 50 percent of the amount of the initial deposit ($250,000), the Operator shall deposit $50,000 in supplemental funds within 30 business days of notification. After the first year, if the balance in the draw-down account is reduced at any time to $50,000 or less, the Operator shall deposit $50,000 in supplemental funds on each occasion that the account is reduced to $50,000 or less within 30 business days of notification. There is no limit to the number of supplemental deposits that may be required. At the discretion of the Operator, the amount of an initial or supplemental deposit may exceed the minimum amounts specified in this subsection. The City Manager or Designee may, from time to time, increase the minimum $50,000 figure to account for inflation or the City’s experience in obtaining funds from the account. Operator shall be entitled to reasonably review during normal business hours the expenditures from the deposit to ensure the expenditures are related to the Project. Should Operator object to an expenditure, Operator shall submit a request in writing to the City Manager for a detailed written explanation of the expenditure. Following receipt of the written explanation from the City and should Operator continue to object to payment of the expenditure, it shall file such objection in writing with the City Council explaining why such expenditure is not appropriate from the draw down account or why the amount of the expenditure is not appropriate for the work. Following City Council consideration of the matter and decision, the Council’s determination on the expenditure shall be final and binding on the parties. A-4 Substantial Conformity The Project shall be designed, constructed, and operated in substantial conformity with the Project Description in Exhibit B and all conditions of approval set forth in this Exhibit D. A-5 Conflicts Between Conditions In the event that any condition or mitigation measure contained in this development agreement is determined to be in conflict with any other condition contained herein, then where principles of law do not provide to the contrary, the condition most protective of natural environmental resources and public health and safety shall prevail to the extent feasible. A-6 Facility Throughput and Source Limits All facilities constructed under this approval shall be limited to the following maximum Exhibit D-2 production volumes: Phase 2 shall be limited to 800 barrels of oil and up to 250,000 standard cubic feet per day of gas. Phase 4 shall be limited to 8,000 barrels of oil per day and 2.5 million standard cubic feet of gas per day. A-7 Alternative Mitigation if Condition Invalidated If any condition of this project is invalidated by a court of law in a final adjudication, this approval shall be suspended pending imposition of a substitute condition or mitigation measure that will achieve equivalent results or reduction of impacts. A substitute condition or mitigation measure shall be incorporated into the Development Agreement in accordance with Section 4.2 of the Agreement- Changes and Amendments to Project before the suspension shall be lifted and the project is allowed to proceed. A-8 Applicability of Conditions to Construction and Operations These conditions are intended to apply to the E&B Project during both the construction and the operation of the permitted facilities. The term "operations" shall be understood to encompass both construction and operation phases unless such an interpretation would be inappropriate. A-9 Compliance Plans to have Same Force and Effect as Conditions All elements of the plans and programs required under this Exhibit D shall have the force and effect of a project condition. The remedies available to the City upon Operators failure to comply with such plans and programs includes but is not limited to those remedies which are available to the City upon Operator’s failure to comply with a project condition. A-10 Performance Security The Operator shall be subject to the following provisions: a. Performance Bond. Prior to issuance of the first drilling permit, the Operator shall provide to the City Manager or Designee, a faithful performance bond or financial instrument in a commercially reasonable amount to be determined by the City Manager taking into account existing bonds to the extent they overlap, payable to the City and executed by a corporate surety acceptable Exhibit D-2 to the City and licensed to transact business as a surety in the State of California to cover certain activities in the exploratory phase of the Project as follows: well abandonment, site restoration and environmental cleanup, and financing spill response connected with exploration. Should the Project proceed to the oil production phases of the Project, the Operator shall provide to the City Manager or Designee, a faithful performance bond or financial instrument in the sum to be determined by the City Manager, payable to the City and executed by a corporate surety acceptable to the City and licensed to transact business as a surety in the State of California Such bond shall be conditioned upon the faithful performance by Operator of duties related to well abandonment, site restoration and environmental cleanup, financing spill response and shall be in a format and include terms approved by the City Manager connected with the production phases of the project. These bonds shall be in addition to any other bond required by law (including without limitation Public Resources Code Sections 3202, 3204, 3205, 3205.2 and 3206 and 14 C.C.R. § 1722.8. These bonds shall satisfy the bond requirement in Section 23 of the Lease, and in the City Manager’s discretion, may satisfy the bond requirement in Condition E-1 below. b. Change of Operator. The performance bond(s) required above shall continue in force for one (1) year following any sale, transfer, assignment, or other change of Operator of the Project Site, or of the current Operator’s termination of activities at the Project Site. The City may release said bond prior to the end of the one (1) year period upon satisfaction by said Operator of all its obligations. Notwithstanding the foregoing, the performance bond shall not be terminated or released upon the sale, transfer, assignment, or other change of Operator until the new Operator has delivered a replacement bond complying with the provisions of this section. c. Funding Options. At its sole option, the City may accept Certificates of Deposit, Cash Deposits, or U.S. Government Securities in lieu of commercial bonds to meet the above bonding requirements on terms approved by the City Manager. B. PROJECT REVIEW B-1 Review by Community Development Director Prior to commencement of construction or operation for Phase 1, 2, 3 and 4, and for subsequent modifications, Operator shall submit to Community Development Department relevant construction plans, engineering drawings and supporting text demonstrating Exhibit D-2 compliance with the relevant conditions of this approval. Construction or operation may not commence until City has reviewed and approved the appropriate submittal, consistent with applicable conditions. The City agrees to make a good faith attempt to review the submittal for completeness as expeditiously as possible, which may involve retaining consultants with the appropriate technical expertise to review the submittal, and to provide a list of deficiencies. When the submittal is deemed complete, the City agrees to provide written notice of approval of construction plans as expeditiously as possible, or indicate in writing the conditions which have not been met, or notify the permittee that the Community Development Director review shall be completed within a period of time specified by the City, based on sound engineering practices. When such conditions have been met and city confirms in writing, construction or operation may be commenced. The City may require post-construction inspections or review of as-built drawings, as necessary to confirm consistency with the approved submittal. B-2 Condition Scheduling Conflicts In the event that scheduling requirements among or between conditions in this approval (or with this approval and conditions imposed by other agencies) conflict with respect to timing, Community Development Department (in consultation with other departments, agencies, and Operator as appropriate) shall resolve such conflict. B-3 Authority to Begin Construction Operator shall not commence construction without written confirmation from Community Development Director, or designee, that all conditions which require approval prior to construction of Phase 1, Phase 2, and Phase 3, as specified by this approval, have been satisfied. B-4 Authority to Begin Operations After construction and prior to start-up, Operator shall not commence operations without written confirmation from Community Development Director, or designee, that all conditions which require approval prior to start-up, as specified by this approval, have been satisfied. Start-up, for purposes of this condition, is defined as the introduction of hydrocarbons into the facility production equipment for both Phase 2/4. Exhibit D-2 C. MANAGEMENT AND MONITORING C-1 Environmental Quality Assurance Program (EQAP) Under EM-1 below in Exhibit D-3, Operator is required to provide funding for implementation and administration of an environmental monitoring program, including an environmental monitor (“Monitor”), to ensure compliance with the environmental conditions of approval. The Monitor shall assist in condition compliance and mitigation monitoring for all applicable construction and operational stages of the project. The monitor shall be under contract with the City and funded by the Operator. 1. In accordance with EM-1, the Monitor will create a monitoring program for the project that includes a post-construction component to monitor measures that extend beyond the construction period and the operational phase of the project. 2. The Monitor will prepare a working monitoring plan that reflects the approved environmental mitigation measures and conditions of approval. The monitor’s plan will include: a. Goals, responsibilities, authorities, and procedures for verifying compliance with environmental mitigations; b. Lines of communication and reporting methods; c. Daily and weekly reporting of compliance; d. Construction crew training regarding environmental sensitivities; e. Authority to stop work; and f. Action to be taken in the event of non‐compliance. 3. Under EM-1 and other conditions, Operator is also responsible for funding work required by permit conditions requiring use of individuals with special expertise (e.g., geologist, noise engineer, etc.). The Monitor will coordinate the monitoring efforts of the specialists, including communication with the City and responsible Agencies, reporting and availability (at appropriate times: prior to issuance of construction permits, or during construction, as required by applicable permit conditions). To assist the Monitor in creating and implementing its working monitoring plan, Operator shall prepare and obtain Community Development Department approval of an Environmental Quality Assurance Program (EQAP) prior to commencement of Phase 1 construction activities, and obtain Community Development Department approval of a revised EQAP prior to commencement of Phase 2, Phase 3, construction activities and Phase 4, Operations. Exhibit D-2 The approved EQAP and all approved revisions to the EQAP shall be submitted to the Monitor prior to commencement of each Project phase. This EQAP shall encompass both construction and operations phases of the E&B Project, and shall describe the steps Operator will take to assure compliance with the conditions contained in the approval for this project. The EQAP is intended to provide a monitoring and reporting framework for compliance with all conditions, programs and plans specified by these conditions and the mitigation measures. As such, it will become a comprehensive reference document for the City, the Monitor, other agencies, and the public regarding the E&B Project. The EQAP shall include, without limitation: a. All plans, as required by these conditions and mitigation measures, relevant to construction and operation of the permitted facilities (including the Risk Management Program, SIMQAP, Emergency Response Plan, Hazardous Material and Waste Management Plan, Site Security Plan, and Fire Protection Plan). To the extent there is any overlap or redundancy between plans required under Exhibits D-2 and D-3, upon E&B request the Monitor may in its discretion authorize E&B to combine required plans into one submittal; b. Provisions for regularly communicating with and reporting to the Monitor; c. Provisions for ensuring knowledge of and compliance with these conditions; d. Provisions for the submittal to Community Development Department and the Monitor of monthly compliance reports throughout construction and annual summary reports during operations unless more frequent reporting is deemed necessary by Community Development or the Monitor. Upon receipt of compliance reports, Community Development Department or the Monitor shall advise Operator of what additional compliance items require reporting prior to the next report. These compliance reports shall describe: 1. Project status, including but not necessarily limited to: i. the extent to which construction has been completed on various project phases ii. the background and experience of the construction labor force iii. the rate of production/throughput during operation, Exhibit D-2 iv. environmental planning and implementation efforts, and v. any revised time schedules or timetables of construction and/or operation that will occur in the next one-year period. 2. Condition compliance, including but not necessarily limited to the results of the specific mitigation requirements identified in these conditions and any compliance plans. 3. Results and analyses of all data collection efforts being conducted by Operator pursuant to these permit conditions. d. Copies of all local, state, and federal permits relative to the E&B Project, and any amendments thereto. The EQAP shall be updated regularly to include all up-to-date compliance plans required under these conditions of approval. C-2 24-Hour Emergency Contact Prior to issuance of the Permit for Phase 1, Operator shall provide to the Community Development Department and the City Fire Department the current name and position, title, address, and 24-hour telephone numbers of the person in charge of the facility, person in charge of construction, and other representatives who shall receive all orders and notices, as well as all communications regarding matters of condition and permit compliance at the site and who shall have authority to implement a facility shutdown pursuant to this agreement or other City ordinances. There shall always be such a contact person(s) designated by the Operator. One contact person shall be available 24 hours a day in order to respond to inquiries received from the City, or from anyone in case of an emergency. If the address or telephone number of Operator’s agent should change, or the responsibility be assigned to another person or position, Operator shall provide to Community Development Department the new information within 24 hours of the effective date of such change. C-3 Operator to Provide Copies of Permits to Community Development Department Exhibit D-2 Operator shall furnish to Community Development Department and Monitor copies of all local, state, and federal permits relative to the E&B Project within 30 days of receipt by Operator. C-4 Pipeline Construction Confined to Right-of-Way All pipeline construction activities, including work areas and staging and storage areas of pipe, shall be confined to the area defined in the encroachment permit. C-5 Capacity and Throughput Reports Operator shall report to Community Development Department and Monitor the volumes and rates of: (1) inlet volumes; (2) transferred for sales into the Southern California Gas Company transmission line; and (3) Oil volumes transported to Pipeline. Reports shall be made on at least a monthly and annual basis and supporting documentation will be provided upon request from Community Development Department or Monitor. Upon approval from the Community Development Director and the Monitor, these reports may be combined with and submitted at the same time as Royalty Statements under Section 4 of the Lease. C-6 Risk Mitigation Program A Risk Management Program to substantially reduce the risks of project-related accidents which may result in loss of life and/or injury, and damage to property and/or the natural environment shall be submitted for approval to the Hermosa Beach City Community Development, Fire and Public Works Departments. Other City departments, as deemed necessary, may be consulted. All reasonable costs associated with this City review shall be borne by Operator. Operator shall be entitled to participate fully in the review process. The Program shall include all appropriate construction plans, Process Hazards Analyses (PHA), and Hazard and Operability Studies (HAZOPs) for the proposed facility and ancillary equipment to the City who may employ a third-party technical review in order to evaluate project design and help identify possible design hazards prior to issuance of ministerial permits. The HAZOPs shall be reviewed and approved by the City prior to construction for each Phase of the project. This review shall also evaluate all mitigation identified in the EIR. The City may require as-built inspections and the submittal of as-built drawings for approval Exhibit D-2 prior to the operation of any plant modifications. C-7 Safety Inspection, Maintenance And Quality Assurance Program Operator shall submit a detailed Safety Inspection, Maintenance and Quality Assurance Program (SIMQAP) for all facilities and pipelines which shall be implemented during construction and operations. Separate SIMQAP plans may be submitted for Phase 1 and Phase 2/3/4 activities. The SIMQAP shall be reviewed and approved by the City, including the Hermosa Beach City Community Development Department, Hermosa Beach Fire Department and the Monitor. Other City departments, as deemed necessary, may be consulted. The SIMQAP for construction shall be approved prior to construction, and the SIMQAP for operation shall be approved prior to operation for each Phase of the project. The plan is a dynamic document and, as such, updates including new procedures, safety and maintenance technologies and processes, shall be reviewed jointly by Operator and the City. The SIMQAP shall be revised as appropriate. The SIMQAP shall include, but not be limited to, evaluation of staffing levels for safe operation of the plant in emergency situations, establishing procedures for review of safety inspection records, regular maintenance and safety inspections, periodic safety audits, development of safety system testing protocols, training and experience standards for personnel and use of simulation techniques in training programs, inspections of all trucks carrying hazardous and/or flammable material prior to loading, monitoring of critical safety devices and systems, and review of the routing of all trucks carrying hazardous material. Operator shall implement the approved plan and shall provide for involvement of the Monitor, City staff, or its consultants in all inspections as appropriate. Prior to construction and operations, Operator shall demonstrate that employees (and subcontractors) are trained in the safety, inspection, maintenance and operations requirements of the project. All costs associated with this review process shall be borne by Operator. C-8 Emergency Response Plan Operator shall submit to the applicable City Departments and the City Fire Department an Emergency Response Plan (ERP) that addresses response procedures to be implemented by Operator for accidental events that pose significant threats to public health and safety, property, or the environment. The ERP shall be reviewed and approved by the City Fire, Community Development and Exhibit D-2 Public Works Departments prior to commencement of drilling operations. Separate ERPs may be required for Phase 1 and Phase 2/3/4 activities. The ERP shall include specific measures to avoid impacts on cultural resources, sensitive habitats, and sensitive biological resources identified in the project EIR whenever possible without affecting emergency response. Operator shall demonstrate the effectiveness of its ERP by responding effectively as determined by Fire to one emergency response drill prior to Phase 1 and prior to approval of the Plan by Fire. The ERP shall be submitted sufficiently prior to Operator’s projected start-up date so as to allow reasonable time for review and the planning of a drill required prior to ERP approval. The ERP shall be a dynamic document and, as such, shall be jointly reviewed by the City and Operator, and revised when warranted to incorporate new planning strategies or procedural changes, new technologies, and the acquisition of more effective, feasible response equipment as it becomes available. Any changes shall be submitted to the City Fire, Community Development and Public Works Departments for their review and approval, prior to implementation. Operator shall demonstrate the ongoing effectiveness of the ERP by responding to no more than two surprise drills each year which may be called by the City. If critical operations are underway, Operator need not respond to the drill at that time but shall explain the nature of the critical operations and why response is not possible. The City may then call for an additional surprise drill in the same year. Operator shall implement all reasonable changes based on review of drill performance, which will further enhance overall emergency response planning and capabilities. Upon E&B’s request and written approval from the Monitor, this plan may be combined with the emergency response plan required under FP-1d and FP-1e below. C-9 Hazardous Material and Waste Management Plan Prior to start-up, Operator shall submit a Hazardous Material and Waste Management Plan (HMWMP) to the City Fire Department and Community Development Department for all facilities. The HMWMP shall be reviewed and approved by Fire and Community Development prior to start-up. The Plan shall demonstrate compliance with the provisions of the Uniform Fire Code as adopted in Chapter 15 of the Hermosa Beach Municipal Code and the provisions of the Health and Safety Code §25500 et seq, Chapter 6.95 Business Plan Requirements, with the exception of emergency response procedures which are complied with above. Exhibit D-2 The Hazardous Material and Waste Management Plan shall include but not be limited to the following: a. Locations and methods for storing hazardous materials and wastes, both within the facility and along the OIL pipeline right-of-way. b. Treatment procedures, or justification where none are used, to reduce the hazardous nature of the materials before they are permitted to leave the site. c. Specific routes for transportation of hazardous waste materials to Class I disposal sites consistent with City policy. d. Letter of commitment that the materials are transferred by a carrier licensed in hazardous material transport. e. Letter of commitment ensuring complete accounting of intake, processing, and exit of hazardous material and wastes. f. Detailed description of a monitoring system to be installed, capable of detecting hazardous material and wastes that may escape from primary storage devices. g. A revised Hazardous Materials Business Plan which accurately reflects the revised chemical inventory of the project site to Environmental Health Services for review and approval, in accordance with the California Health & Safety Code, Chapter 6.95, Section 25,500 et seq. The HMWMP shall be a dynamic document and, as such, shall be jointly reviewed by the City and Operator, and revised when parties mutually agree it is warranted to incorporate new planning strategies, changes in procedures, new technologies, or changes in materials, or when required by law. Any changes requested by Operator or City shall be submitted to Fire and Community Development for their review and approval, prior to implementation. C-10 Site Security Plan Prior to issuance of a Permit for Phase 1, Operator shall submit to the Community Exhibit D-2 Development and the Hermosa Beach City Police Department for review and approval a site security plan. The plan shall describe the procedures to be implemented by Operator which will prevent intentional damage to the drilling and production facilities which may result in environmental damage or public safety hazards. The plan shall include placement of security cameras to the satisfaction of the Community Development and Police Departments, and employment of security personnel at all times during drilling stages (24 hours) (see condition 3.2 in D-1) and employment of security personnel from dusk until dawn at all other times. The plan shall be reviewed and revised as warranted to require incorporation of new planning strategies, new technologies or changes in plant operation, and changes in notification procedures. C-11 Fire Protection Plan All E&B Project facilities shall have fire protection features installed in accordance with the provisions of an E&B Project Fire Protection Plan (FPP), and as such features may be required under this Exhibit D. All facilities, construction activities, process equipment, and fire protection equipment shall comply with the standards of the National Fire Protection Association (NFPA), American Petroleum Institute, Uniform Fire Code as adopted in Chapter 15, Building and Construction of the Hermosa Beach Municipal Code, and the Hermosa Beach City Fire Department. In the event of a conflict between these standards, the Fire Marshal, in consultation with the Operator, shall make a cost/benefit decision regarding which standards apply. Prior to construction, Operator shall receive Fire Department approval of an FPP which addresses both construction and operation of the E&B Project. Operator shall distribute copies of the approved contingency plans to applicable City Departments and the City Fire Department. All plan recipients are to be notified of contingency plan changes via formal contingency plan updates. Separate FPPs may be submitted for Phase 1 and Phase 2/3/4 activities. The FPP shall include, but may not be limited to, discussions of the following: Onsite firefighting equipment and systems Fire and detection Access Vegetation management Employee training and safe practices Process control and monitoring analysis Exhibit D-2 Drainage and containment Safety, inspection (including City inspectors) and maintenance practices Upon E&B’s request and written approval from the Monitor, this plan may be combined with the emergency response plan required under FP-1d and FP-1e below. C-12 Prevention of Internal Pipeline Corrosion Operator shall implement techniques to prevent internal corrosion in accordance with the requirements of the California State Fire Marshal (Title 5 §51010-5-019 of the California Government Code), 49 CFR 192 Parts 150, 475 and 477, and 49 CFR 195.418 as part of the Oil and pipeline maintenance procedures. The internal inspection records shall be submitted to and reviewed by the appropriate governmental agencies. Such activities shall include routinely scheduled pigging of the pipeline to remove pockets of accumulated fluids that contribute to internal corrosion (such as hydrogen sulfide, carbon dioxide, and water), the use of corrosion inhibitors and corrosion coupons, and periodic testing by a state-of-the-art "smart pig" to identify areas where corrosion, pipewall thinning, dents, cracks and other defects have occurred. Specific measures are discussed below: a) Whenever any section of the pipelines are removed for any reason, they shall be inspected for possible internal corrosion and records retained for inspection by the State Fire Marshal. b) The pipeline shall be tested with a state-of-the-art "smart pig" to identify areas where corrosion, pipewall thinning, dents cracks and other defects have occurred. State-of- the-art pigging will be capable of defining wall-thickness contours around any area of reduced wall thickness. The smart pigging will be done prior to operation of the Oil and natural gas pipelines and at a subsequent interval to be determined by the California State Fire Marshal. A program of maintenance shall be developed to ensure that permits to perform the work are obtained as soon as possible and that pipeline defects are rectified within one month of securing the necessary permits for severe defects, and within six months for moderate defects. This procedure shall be noted in the SIMQAP and receive approval by the SSRRC prior to operations of either the OIL or natural gas pipelines. C-13 Prevention of External Pipeline Corrosion Exhibit D-2 Operator shall undertake the following provisions to avoid external pipeline corrosion: a) The Oil and natural gas pipelines shall be coated to reduce the potential for external corrosion. Final selection of pipeline coating will be demonstrated, to the satisfaction of the California State Fire Marshal, that the selected coating would provide the maximum level of protection of available coatings for all expected operating conditions; and b) A baseline pipe-to-soil cathodic profile and reading shall be obtained after the pipeline has been installed, but before any cathodic protection facilities are connected. Other utilities shall disconnect their bonds as well. This measure shall be included on the construction plans which shall be reviewed by the City. C-14 Pipeline Hydrotesting The oil and natural gas pipelines shall be hydrotested prior to operation, and every five years thereafter or sooner if warranted by major ground movement that has the potential to undermine the structural integrity of the pipeline. This procedure shall be noted in the SIMQAP which shall be reviewed and approved prior to operations. C-15 Structural Support for Underground Utilities Operator shall provide structural support for underground utilities in and near the construction area during work in the trench and backfilling operations to prevent damage to such facilities during construction activities. C-16 Underground Utility Damage Operator shall halt work in the immediate vicinity in the event of inadvertent damage to an underground utility, until the owner of the utility has been contacted and repairs have been effected. C-17 Underground Pipeline Warning Marker A plastic ribbon or other suitable material shall be buried 12 to 18 inches above the oil and natural gas pipelines and shall cover the length of the pipeline. The material shall be brightly Exhibit D-2 colored and be labeled with a warning that this area contains a hazardous liquid pipeline trench. This measure shall be noted on the design and construction plans to be reviewed and approved by the City. C-18 Pipeline Route Warning Signs The entire pipeline route shall be marked with pipeline warning signs a minimum of every 500 feet. Spacing of markers may be greater in agricultural areas provided markers are clearly within sight of each other. Bright colored markers shall be installed above new pipelines that extend offsite of the proposed facility. This type of measure helps reduce the likelihood of external mechanical interference, of which third party damage associated with excavation near the pipelines is the most common cause of pipeline failures. C-19 Underground Service Alert Notification Operator shall notify owners through the office of Underground Service Alert of any underground facilities (including electrical, water, petroleum pipelines, fiber-optics and agricultural water delivery and drainage pipelines) 48 hours in advance of excavation in the vicinity of these facilities. Operator shall have an electrical contractor on-call at all times during construction near the potentially affected facility to repair any circuits if required by the owner in the event they are damaged during construction. The appropriate response to hazards associated with damage to natural gas pipelines will be determined in consultation with Southern California Gas Company. The City Fire Department shall be notified of the schedule for construction activities in the vicinity of natural gas and other oil pipelines. C-20 Finished Pipeline Route Maps Upon completion of pipeline construction, Operator shall provide all jurisdictional agencies with at least two copies of maps showing the finished pipeline route and shall include locations accessible by fire department emergency response vehicles. Said maps shall be 7 1/2 minute quadrate scale, (one inch equals 24,000 inches), and shall represent topographical features. C-21 Supervisory Control and Data Acquisition and Emergency Shutdown Systems The pipeline supervisory control and data acquisition (SCADA) and Emergency Shutdown Exhibit D-2 (ESD) systems, including inspection, maintenance and quality assurance procedures for the SCADA and ESD systems, shall be reviewed and approved by the Fire Department and the Building Department and Public Works Department prior to operations of either the oil or natural gas pipelines, and as appropriate thereafter. The SCADA and ESD systems shall comply with the provisions of Fire Department Development Standard No. 7 and the National Electrical Code Article 760. Operator shall conduct a comprehensive safety and reliability analysis of the SCADA system as well as the processing facility and oil and natural gas pipelines control room prior to commencement of pipeline operations, and as appropriate thereafter. The analysis shall meet or exceed the guidelines developed by the Institute of Electronic and Electrical Engineers. Any improvements identified in the study shall be included in the suggested hardware and software. Results of the study shall be provided to the Community Development Department. Company shall design the project such that the entire project will integrate the supervisory control and data acquisition (SCADA) or other monitoring system for all the components of this project in a manner so as to provide timely and efficient detection, shutdown, notification and response to an emergency involving any of the project components. Any break, rupture, and/or damage to the facilities shall result in the orderly shutdown of the pumping operations, and will activate the shut off valves in a manner which will minimize environmental damage. C-22 Update of Operational Risk Assessment Upon City request, Operator shall fund the updating of the operational risk assessment subject to ministerial permitting, as needed, so that any surrounding land use proposals are aware of existing risk, if any. D. FACILITY DESIGN D-1 Submittal of As Built Drawings Within one year after initial start-up of the E&B Project (Phase 1), and again within one year of commencement of Phase 2 operations, Operator shall submit as-built drawings of the entire facility(s) to City. Any facility modifications required for Phase 3 operations shall Exhibit D-2 also be documented on facility as-built drawings within one year of their construction. Operator shall submit as many sets of drawings (up to ten sets) as requested by the Community Development Department. D-2 Solid Waste Disposal Solid waste generated on the site shall be collected by the City’s franchised commercial trash hauler. Construction waste shall be transported by E&B’s own efforts to a facility authorized to accept construction waste in accordance with the provisions of the Hermosa Beach Municipal Code. Hazardous waste shall be transported by E&B’s own efforts to a facility authorized to accept hazardous waste in accordance with all local, state and federal laws. D-3 Water Conservation Measures The design of all new and/or modified onsite facilities shall incorporate the use of cost- effective water-conserving fixtures, including by way of example indoor and outdoor plumbing fixtures and irrigation. D-4 Energy Conservation Measures Throughout the project life, as equipment is added or replaced, cost-effective energy conservation techniques shall be incorporated into project design, including by way of example indoor and outdoor lighting, HVAC, drill equipment, vehicles, and microturbines. E. ABANDONMENT E-1 Abandonment Procedures In implementing Section 26 of the Lease and Article VII of the Hermosa Beach Municipal Code - Oil Code Chapter 21A, Operator shall secure all necessary permits and proceed in accordance with a City Council approved abandonment and restoration plan within one year of permanent shut down. The abandonment plan shall be processed with environmental review of the plan. Operator shall post a performance bond, or other security device acceptable to City Council, prior to commencement of Phase 1 construction for estimated Exhibit D-2 costs of abandoning Phase 1 facilities. Operator shall also post a performance bond, or other security device acceptable to City Council, prior to commencement of Phase 2 for estimated costs of abandoning Phase 2 facilities. E-2. Abandonment Costs All costs associated with abandonment or removal shall be borne by Operator. E-3. Wellsites Prior to permanent shutdown or termination of this agreement or the lease, any well drilled by Operator shall be plugged and abandoned within three months from the date it is determined that such well is no longer capable of production, subject to weather and rig availability, and capped, in accordance with the rules and regulations of the State Division of Oil, Gas & Geothermal Resources. Thereafter, the wellsite shall be restored as near as practicable to its original condition. F. Miscellaneous Conditions F-1. Hydraulic Fracturing Prohibited The use of hydraulic fracturing as a well stimulation technique for enhanced hydrocarbon production shall be prohibited on the project site. F-2. Pipelines All pipelines installed for the Project shall not go below the depth authorized by the State Division of Oil, Gas & Geothermal Resources. After completion of the construction of any such pipelines, Operator shall restore the surface of the area impacted by the construction of such pipeline as nearly as practicable to its condition immediately prior to such construction. F-4. Fire Marshal Position Operator shall fund a full-time dedicated Fire Marshal position for the Hermosa Beach Fire Department for the full Term of the Development Agreement. Exhibit D-2 F-5. Training Operator shall pay for annual training for Hermosa Beach Fire Department personnel and fire personnel from the City’s automatic aide partners on fighting oil fires. F-6. Odor (from HIA) In the event of frequent reports of odor emanating from the site, Operator shall pay for additional studies and/or periodic air monitoring. If the studies or monitoring indicate that additional control measures should be implemented to reduce the frequency of noticeable odors, Operator shall include those measures as project conditions. F-7. Notice (from HIA) During Phase 3 pipeline construction, Operator shall provide written notification of impending construction activities, including the dates and times of activities that may produce excessive noise, to all residents within 100 feet of the construction activities. Notice shall be provided no less than 72 hours before construction begins. F-8. Light impact reduction (from HIA) Operator shall pay for or provide black-out blinds or curtains for bedrooms with direct line- of-sight to the exposed side of the electric drill rig that will be lit at night. The amount of payment or the brand of blinds/curtains shall be pre-approved by the City Manager, and may be provided through a direct mail program. F-9. Community Relations (from HIA) As recommended in Intrinsik’s Health Impact Assessment for the project, and at the City Council’s discretion, the Operator may be required to pay for the costs associated with (1) organizing a Community Liaison Committee; (2) a follow-up Community Health Assessment; and/or (3) a quality of life health survey. Exhibit D-2 [Continue to following page for Mitigation Measures] Exhibit D-3 EXHIBIT “D-3” Mitigation Measures/Mitigation Monitoring Plan from Section 8.0 of FEIR (as revised at Hermosa Beach City Council certification hearing on July 8, 2014 per Resolution 14-6908). 8.0 Summary of Mitigation Measures and Mitigation Monitoring Plan 8.1 Mitigation Monitoring Program As the Lead Agency under the California Environmental Quality Act (CEQA), the City of Hermosa Beach (City) is required to adopt a program for reporting or monitoring regarding the implementation of mitigation measures for this Project, if it is approved, to ensure that the adopted mitigation measures are implemented as defined in this Environmental Impact Report (EIR). This Lead Agency responsibility originates in Public Resources Code Section 21081.6(a) (Findings) and the CEQA Guidelines Sections 15091(d) (Findings) and 15097 (Mitigation Monitoring or Reporting). 8.2 Monitoring Authority and Enforcement Responsibility The purpose of a Mitigation Monitoring, Compliance, and Reporting Program (MMCRP) is to ensure that measures adopted to mitigate or avoid significant impacts are implemented. A MMCRP can be a working guide to facilitate not only the implementation of mitigation measures by the Project proponent, but also the monitoring, compliance, and reporting activities of the City and any monitors it may designate. The City may delegate duties and responsibilities for monitoring to other environmental monitors or consultants as deemed necessary, and some monitoring responsibilities may be assumed by responsible agencies, such as affected jurisdictions and cities. The number of monitors assigned to the Project will depend on the number of concurrent activities and their locations. The City or its designee(s), however, will ensure that each person delegated any duties or responsibilities is qualified to monitor compliance. Any mitigation measure study or plan that requires the approval of the City must allow at least 60 days for adequate review time. When a mitigation measure requires that a mitigation program Exhibit D-3 be developed during the design phase of the Project, the Applicant must submit the final program to City for review and approval for at least 60 days before any activity begins. Other agencies and jurisdictions may require additional review time. It is the responsibility of the environmental monitor assigned to the Project to ensure that appropriate agency reviews and approvals are obtained. The City or its designee will also ensure that any deviation from the procedures identified under the monitoring program is approved by the City. Any deviation and its correction shall be reported immediately to the City or its designee by the environmental monitor assigned to the Project. The City is responsible for enforcing the procedures adopted for monitoring through the environ- mental monitor assigned to the Project. Any assigned environmental monitor shall note problems with monitoring, notify appropriate agencies or individuals about any problems, and report the problems to the City or its designee. 8.3 Mitigation Compliance Responsibility The Applicant is responsible for successfully implementing all the mitigation measures in the MMCRP, and is responsible for assuring that these requirements are met by all of its contractors and field personnel. Standards for successful mitigation also are implicit in many mitigation measures that include such requirements as obtaining permits or avoiding a specific impact entirely. Other mitigation measures include detailed success criteria. Additional mitigation success thresholds will be established by applicable agencies with jurisdiction through the permit process and through the review and approval of specific plans for the implementation of mitigation measures. 8.4 General Monitoring Procedures Environmental Monitors. The City and the environmental monitor(s) are responsible for integrating the mitigation monitoring procedures into the construction or operation process in coordination with the Applicant. To oversee the monitoring procedures and to ensure success, the environmental monitor assigned to the Project must be on site during that portion of the construction or operation that has the potential to create a significant environmental impact or other impact for which mitigation is required. The environmental monitor is responsible for ensuring that all procedures specified in the monitoring program are followed. Exhibit D-3 Construction and Operations Personnel. A key feature contributing to the success of mitigation monitoring will be obtaining the full cooperation of construction and operations personnel and supervisors. Many of the mitigation measures require action on the part of the supervisors or crews for successful implementation. To ensure success, the following actions, detailed in specific mitigation measures, will be taken: Procedures to be followed by construction or operations companies hired to do the work will be written into contracts between the Applicant and any contractors. Procedures to be followed by construction and operations crews will be written into a separate document that all personnel will be asked to sign, denoting agreement. One or more meetings will be held to inform all and train personnel about the requirements of the monitoring program. A written summary of mitigation monitoring procedures will be provided to supervisors for all mitigation measures requiring their attention. General Reporting Procedures. Site visits and specified monitoring procedures performed by other individuals will be reported to the environmental monitor. A monitoring record form will be submitted to the environmental monitor by the individual conducting the visit or procedure so that details of the visit can be recorded and progress tracked by the environmental monitor. A checklist will be developed and maintained by the environmental monitor to track all procedures required for each mitigation measure and to ensure that the timing specified for the procedures is adhered to. The environmental monitor will note any problems that may occur and take appropriate action to rectify the problems. Public Access to Records. The public is allowed access to records and reports used to track the monitoring program. Monitoring records and reports will be made available for public inspection by the City or its designee on request. 8.5 Mitigation Monitoring Table The Tables below present a summary of monitoring and reporting plan requirements for the mitigation measures identified in Chapter 4 of the EIR as applicable to the Proposed Project. The Table provides the following information, by column: Mitigation Measure (description of the mitigation measure identified in Chapter 4); Monitoring/Plan Requirements (monitoring or plan requirements necessary to verify compliance with the mitigation measure); Exhibit D-3 Method of Verification (this is how the responsible agency can determine if the mitigation measure has been implemented); Timing (this identifies when action needs to be taken on mitigation measure); and Responsible Agency (this is the agency that is responsible for assuring compliance with the mitigation measure). Table 8-1 Aesthetics and Visual Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party EM-1 Prior to issuance of the first grading and/or construction permits, the Applicant shall enter into agreements with the City to provide funding for the implementation and administration of an environmental monitoring program, including an environmental monitor, to ensure compliance with each Agency’s environmental Conditions of Approval. The monitor shall assist the Agencies in condition compliance and mitigation monitoring for all applicable construction and operational stages of the Oil Project, as specified in a scope of work, as approved by the Agencies. The monitoring program shall include a post‐construction program to monitor measures that extend beyond the construction period (e.g., success of landscaping, etc.), as well as monitor certain mitigation measures required during the operational phase. The monitor will prepare a working monitoring plan that reflects the Agencies ‐ approved environmental mitigation measures/conditions of approval. This plan will include: 1. Goals, responsibilities, authorities, and procedures for verifying compliance with environmental mitigations; Conditions included within the Development Agreement, including administrative measures to ensure bonding, payment methods and insurance Before the start of Phase 1 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party 2. Lines of communication and reporting methods; 3. Daily and weekly reporting of compliance; 4. Construction crew training regarding environmental sensitivities; 5. Authority to stop work; and 6. Action to be taken in the event of non‐compliance. The environmental monitor shall be under contract to the Agencies. Costs of the monitor, monitoring program, and any Agency administrative fees, shall be paid by the Applicant. The Applicant shall also be responsible for funding work required by permit conditions requiring use of individuals with special expertise (e.g., geologist, noise engineer, etc.). The Agencies’ environmental monitor will coordinate the monitoring efforts of the specialist, including communication with the Agencies, reporting and availability (at appropriate times: prior to issuance of construction permits, or during construction, as required by applicable permit conditions). AE-1a Material choice of electrical drill rig acoustical shroud shall be of neutral sky color which is selected for its ability to reduce visual impact, in coordination with and approval by the City Community Development Director. Approval of Construction Documents and Specifications and field- Prior to issuance of permits City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party demonstration AE-1b The sound attenuation wall shall be replaced by a permanent wall with design features installed at the end of Phase 3. The intent is to provide stability of views and opportunities for positive visual elements that partially mitigate the visual presence of the walls from the Hermosa Greenbelt and other sensitive views in the immediate Project vicinity. The permanent wall shall be allowed to be provided in lieu of the 16-foot block wall. Landscape design shall be allowed to be adjusted to respond to façade articulations, though quantities and densities shall be maintained. The permanent wall shall be designed with architectural features in coordination with and approval of the City Community Development Director. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2a Design of the sound attenuation wall exterior façade shall be required to include design articulations that are complementary to the character, scale, and quality of the surrounding environment. The intent is to mitigate the visual impact of the wall from the Hermosa Greenbelt and other sensitive views in the immediate project vicinity. The following measures of success shall be met: 1) Articulations of façade decrease scale and proportion of mass into smaller increments that more closely resemble those of adjacent buildings; and 2) Colors, detailing and material use are varied to a level consistent with existing Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party visual environment. AE-2b Planting area growth medium shall be capable of supporting the long term health and growth of the landscape design. Requirements shall be: 1) Demonstrated free of debris and construction waste (asphalt, concrete, etc) to a minimum depth of 3 feet within all planted areas. Wall footings shall be designed to limit encroachment into planted areas; 2) Soils analysis report shall be conducted by a certified soil scientist. Report shall include recommendations to meet the intent of this mitigation measure; and 3) If soils are determined to be unsuitable to support plant growth, they shall be amended or removed/replaced to meet requirements of soils analysis for plant pallette selected. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2c Vine plantings where used shall meet the following conditions: 1) be self- attaching or structure supported; 2) have demonstrated success in the City; 3) be planted at a density to achieve full coverage at maturity; 4) be planted at a minimum 5 gallon size; and 5) be required on the visible portion of the west wall at the temporary parking facility. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2d All trees shall be required to be a minimum of 20’ in height at installation and meet the American Standard for Nursery Stock (ANSI Z60.1-2004). If a tree species alternate is proposed, it shall be required to be an equal to the species Approval of Construction Documents and Prior to issuance of permits and City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party proposed in the Project Application in the following characteristics: 1) Dense evergreen with similar form and habit; 2) Probability of achieving a minimum of 35-40 feet at maturity; and 3) Comply with Municipal Code Chapter 8.60 and 8.56. Specifications and Inspection during construction AE-3a Pipeline alignments and valve box locations shall be designed to avoid the removal or modification of trees, hedgerows, and/or large shrubs to the extent feasible. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Hermosa Beach, Redondo Beach, and Torrance AE-3b If landscaped areas, streetscapes, plazas and/or parklands are required to be temporarily disturbed, they shall be restored to their previous condition following completion of construction. Avoidance of disturbance shall be the preferred option, especially where landscape elements act to screen views (hedges, large shrubs, etc) or where they act as community gateways (Redondo Beach at Hwy-1). Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Hermosa Beach, Redondo Beach and Torrance AE-3c Block color/s selection and pattern (if applicable) shall be complementary to adjacent buildings. A buffer of shrubs and vines shall be planted to match the existing character and quality of the adjacent properties. Approval of Construction Documents and Prior to issuance of permits and Cities of Hermosa Beach, Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Specifications and Inspection during construction Redondo Beach and Torrance AE-4a Final acoustical cover material selection shall be required to be fully opaque. Fully opaque shall be defined as completely blocking all light from passing through its surface. The exterior finish shall be low reflectivity and not capable of producing glare. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-4b Colors and finishes of equipment and surfaces within the soundwall (including the interior face of the soundwall, the interior face of the drill rig acoustical cover, and the physical structure of the drill rig within the acoustical shield) shall have a reflectivity rating of 0.3 or lower. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-4c All proposed site lighting fixtures associated with the drilling activities shall demonstrate compliance with the mandatory B-U-G ratings for area lighting as required by CalGreen mandatory measures in the 7/1/2012 supplement. The Lighting Zone used to demonstrate compliance shall be LZ-2. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party AE-5a Colors and finishes of surfaces within the facility, including the interior face of the soundwall, ground materials (darker or asphalt), wall paints and equipment paints to the extent feasible shall have a low reflectivity rating of 0.3 or lower to reduce the potential for glow. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5b Final sound wall material/s selection/s (including gates) shall be fully opaque. Fully opaque shall be defined as completely blocking all light from passing through its surface. The exterior finish shall be low reflectivity and not capable of producing glare. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5c All proposed site lighting, including fixtures outside the wall, shall be fully shielded. Fully shielded shall be defined as: A luminaire constructed and installed in such a manner that all light emitted by the luminaire, either directly from the lamp or a diffusing element, or indirectly by reflection or refraction from any part of the luminaire, is projected below the horizontal plane through the luminaire’s lowest light-emitting part (IES/IDA, 2011) Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5d The LZ-2 parameters of the Model Lighting Ordinance (IES/IDA, 2011) shall be used to demonstrate that maximum vertical illuminance for the site are not exceeded. For site lighting inside the wall, Table B allowances shall be used. Approval of Construction Documents and Prior to issuance of permits and City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Lighting outside the wall at site entrances shall not exceed that of existing street lighting, which produces a maximum of 1 footcandle. For the purposes of measuring vertical illumination, the plane of the property line shall be extended to an elevation equal to the height of the electric drilling rig. Specifications and Inspection during construction AE-5e All proposed site lighting fixtures shall demonstrate compliance with the mandatory B-U-G ratings for area lighting as required by CalGreen mandatory measures in the 7/1/2012 supplement. The Lighting Zone used to demonstrate compliance shall be LZ-2. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-6a Any proposed metering station site lighting shall be fully shielded and shall incorporate permanent features (shields, hoods, etc.) shall incorporate permanent features which prevent light spillage beyond the property line. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Redondo Beach AE-6b Light levels and quantities of fixtures shall not exceed that which is needed for security and safety. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Redondo Beach and Torrance Table 8-2 Air Quality and GHG’s Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party AQ-1a The Applicant shall submit and implement a Fugitive Dust Control Plan that includes SCAQMD mitigations for fugitive dust mitigation, according to Rule 403, and SCAQMD CEQA Guidelines. Fugitive dust mitigation measures in the plan shall include the following (this mitigation is applicable to both the Proposed Oil Project and the Proposed City Maintenance Yard Project): - Apply water every 3 hours to disturbed areas and unpaved roads within a construction site (61 percent reduction). - Require minimum soil moisture of 12 percent for earthmoving, by using a moveable sprinkler system or water truck. Moisture content can be verified by lab sample or moisture probe (69 percent reduction). - Limit onsite vehicle speeds on unpaved roads to 15 mph and posting of speed limits. - All trucks hauling dirt, sand, soil, or other loose materials are to be tarped with a fabric cover and maintain a freeboard height of 12 inches (91 percent reduction). - Install gravel bed trackout apron (3 inches deep, 25 feet long, 12 feet Plan review, site inspections Before and during construction Both Oil Project and City Yard SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party wide per lane, and edged by rock berm or row of stakes) to reduce mud and dirt trackout from unpaved truck exit routes (46 to 80 percent reduction). - Water storage piles by hand or apply cover when wind events are declared, according to SCAQMD Rule 403 when instantaneous wind speeds exceed 25 miles per hour (90 percent reduction). - Appoint a construction relations officer to act as a community liaison concerning onsite construction issues, such as dust generation. AQ-1b The Applicant shall implement a NOx reduction program including the following, or equivalent, measures to the satisfaction of the SCAQMD (this mitigation is applicable to both the Proposed Oil Project and the Proposed City Maintenance Yard Project): - All off-road construction equipment shall be tuned and maintained according to manufacturers’ specifications. - Any temporary electric power shall be obtained from the electrical grid, rather than portable diesel or gasoline generators. - All off-road diesel construction equipment with greater than 100- horsepower engines shall meet Tier 3 NOx requirements. - Limit onsite truck idling to less than 5 minutes. - A copy of the certified tier specification, best available control Plan review, site inspections Before and during construction SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party technology documentation, or the CARB or SCAQMD operating permit for each piece of equipment shall be kept onsite during all operations. AQ-3a The Applicant shall limit flaring during Phase 4 to a total of 5 hours per day at the full flaring capacity (or to an equivalent volume of flared gas) during all emergency or routine flaring events in order to ensure that NOx emissions are reduced below the thresholds. Lower NOx emission combustors or other equivalent measures can also be used to satisfy the requirement. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-3b The Applicant shall implement methods to reduce the off-gassing of muds by at least 90 percent through the installation of fully enclosed mud pit areas with vapor control (either through carbon canisters or vapor recovery) and/or the use of mud degassing units routed to vapor control systems. The Applicant shall monitor the muds vapor immediately above the muds exit point from the wellbore and at other areas above the mud pits where muds may be exposed to the atmosphere in order to ensure that hydrocarbon vapors are captured at the minimum rate of 90 percent. Plan review, site inspections Before Phase 2 and Phase 4 drilling SCAQMD City of Hermosa Beach AQ-4 The Applicant shall limit the microturbine PM emissions to 0.0035 lbs/mmbtu, or an equivalent reduction in the number and/or size of the microturbines, in order to reduce emissions to below the localized thresholds. The City shall be responsible for ensuring that the applicant will be subject to permit conditions Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party that limit emissions from the set of microturbines, not just individual permit units. AQ-5a The Applicant shall at all times have a gas buster and SCAQMD-approved portable flare at the site and connected for immediate use to circulate out and combust any gas encountered during drilling. The flare shall be capable of recording the volume of gas that is flared. The operator shall report any flared gas from drilling to the Hermosa Beach Fire Chief and the SCAQMD. Plan review, site inspections Before Phase 2 drilling SCAQMD City of Hermosa Beach AQ-5b The Applicant shall install a compressor seal vent collection system. In the event of a seal leak, vapors shall be collected and sent to the vapor recovery system or flare for destruction. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-5c The Applicant shall develop and implement an Odor Minimization Plan, submitted to and approved by the City and the SCAQMD. The Odor Minimization Plan shall address reducing the frequency from potential sources of odors from all site equipment, including wells and drilling operations, temporary operations such as truck loading, and measures to reduce or eliminate these odors (e.g., containment, design modifications, carbon canisters). The Plan shall address issues such as facility information, buffer zones, signs with contact information, logs of odor complaints, the protocol for handling odor complaints and odor release investigations and methods Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party instituted to prevent a re-occurrence. The Plan shall require that all odor complaints and issues be immediately communicated to the City and that the City shall have the authority to implement and enforce contingency measures to ensure that any nuisance odors from the facility are eliminated. AQ-5d The Applicant shall develop and implement an Air Monitoring Plan. The Plan shall provide for the monitoring of total hydrocarbon vapors and hydrogen sulfide and total hydrocarbon vapors at all perimeter locations of the facility as well as at strategic locations near processing equipment. At all times during operations, drilling, redrilling and workover operations, the Operator shall maintain monitoring equipment that shall monitor and digitally record the levels of hydrogen sulfide and total hydrocarbon vapors. Such monitors shall provide automatic alarms that are audible and visible to the Operator of the drilling equipment, and gas plant, and shall be triggered by the detection of hydrogen sulfide or total hydrocarbon vapors. Alarm points shall be set at a maximum of 1 5 and 5 10 ppm H2S and 500 and 1,000 ppm hydrocarbons, with the higher level requiring shut-down of drilling or plant operations and the lower level requiring notification to appropriate agencies, including the Hermosa Beach Fire Department and SCAQMD. A meteorological station to monitor wind speed and direction under the guidance and specification of the SCAQMD shall be Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party installed at the site. The Air Monitoring Plan shall be reviewed and approved by the City and the SCAQMD. AQ-5e The Applicant shall use an odor suppressant spray system on the mud shaker tables, and shall install carbon capture canisters on all tanks (permanent and portable) that are not equipped with vapor recovery, containing potentially odiferous materials (for example; the mud baker-type tanks) for all drilling operations so that no odor can be detected at the closest receptor. Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach AQ-5f The fugitive component leak detection program under Rule 1173 shall utilize a Leak Detection and Reporting (LDAR) level of monthly detections with an action level of 100ppm, the installation of bellows valves where applicable (valves 2 inches or smaller) and the use of IR cameras or equivalent during monthly detections to ensure that leaking components are minimized at the facility. Plan review, site inspections Before Phase 2 operations SCAQMD City of Hermosa Beach AQ-6 The Applicant shall provide credits for all GHG emissions generated above the threshold of 10,000 MTCO2e per year. A GHG Reporting and Reduction Plan shall be submitted to the SCAQMD and the City detailing the measures to be implemented to achieve the required reductions, updated annually, and shall include specifications on the protocol, vintage, and registry for any offsite mitigation. The following mitigation credits shall not require prior City or SCAQMD approval: Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party 1. Credits generated within Los Angeles County per an approved SCAQMD protocol; 2. Credits generated within the State of California per an approved SCAQMD protocol; 3. Credits that are generated and verified under the CAPCOA GHG Rx program; 4. Credits that are generated and verified under the voluntary SCAQMD Regulation XXVII; 5. Verified credits registered with the Climate Action Reserve or the American Carbon Registry. In addition, independently verified GHG credits available through other carbon registries that follow specific protocols may be eligible for offsite mitigation, subject to review and prior approval by the City and the SCAQMD. The general criteria for acceptable credits include: • Real: emission reduction must have actually occurred, as the result of a project yielding quantifiable and verifiable reductions or removals. • Additional/Surplus: an emission reduction cannot be required by a law, rule, or other requirement. • Quantifiable: reductions must be quantifiable through tools or tests that Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party are reliable, based on applicable methodologies, and recorded with adequate documentation. • Verifiable: The action taken to produce credits can be audited and there is sufficient evidence to show that the reduction occurred and was quantified correctly. • Enforceable: An enforcement mechanism must exist to ensure that the reduction project is implemented correctly. • Permanent: Emission reductions or removals must continue to occur for the expected life of the reduction project. Operational/drilling GHG emissions from stationary and mobile sources shall be quantified and reported to the City and to the SCAQMD annually. Emissions reporting will follow the same reporting format and procedures as required by the Mandatory Reporting Rule. AQ-7a All diesel equipment used at the site shall meet EPA Tier 3 emission requirements and be equipped with a CARB Level 3 diesel particulate filter to reduce Diesel PM emissions. Workover rigs operated at the project site shall have cumulative total DPM emissions below 1.5 lbs/year or shall utilize electric drive/sources . Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-7b Vapor recovery on crude oil tanks shall achieve a minimum of 99 percent Plan review, Before Phase SCAQMD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party recovery of fugitive emissions. site inspections 4 operations City of Hermosa Beach Table 8-3 Biological Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party BIO-1 To minimize potential impacts to nesting native bird species, and in compliance with the federal Migratory Bird Treaty Act and Sections 3503, 3503.5, or 3513 of the California Fish and Wildlife Code, initial vegetation removal/trimming shall be done outside the breeding season (breeding season is defined herein as January 15 through August 31 for raptors and February 15 through August 31 for all non- raptor species). If vegetation removal/trimming must be completed during this period, then surveys for nesting birds must be conducted by a qualified, City-approved Biologist, within 3 days prior to vegetation removal or other construction-related disturbances. If nesting birds are observed within the Plan review, site inspections Before and during construction City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party project area, then a minimum 100-foot buffer from any non-raptor species and 500 foot buffer from any raptor nest would be established and maintained for the duration of vegetation removal/trimming activities or until nestlings fledge from the nest. BIO-2 The Applicant shall submit for City approval and shall implement an Emergency Response Plan that would, in compliance with the California State Oil Spill Contingency Plan (CDFW, OSPR 2014),address protection of biological resources and possible revegetation of any areas disturbed during an oil spill or cleanup activities. The Emergency Response Plan shall, at a minimum, include specific measures to avoid impacts to native vegetation and wildlife habitats, plant and animal species, and environmentally sensitive habitat areas during response and cleanup operations. The Emergency Response Plan shall include provisions for containment and cleanup measures and responsibilities. The plan shall contain: • Definition of the authorities, responsibilities, and duties of all entities involved in oil removal operations, and methods of emergency action agency coordination during and after an oil spill; • Agreements and statements from all resource agencies involved in an oil response and removal operation; Plan review Before construction City of Hermosa Beach OSPR Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party • Procedures and frequencies for regular monitoring and inspections of pipelines and facilities; • Procedures for early detection and timely notification of an oil discharge; • A description of the necessary onsite equipment and details on the placement of the material required to quickly control, contain, and remove any discharged oil; • Assurance that full resource capability is known and can be committed following a discharge; • A description of sensitive biological resources in the SMB that should be prioritized for clean-up activities in the case of an oil spill into the marine environment; • Actions for after discovery and notification of a discharge; • Procedures to facilitate recovery of damages and enforcement measures. The Emergency Response Plan shall be approved by the California Department of Fish and Wildlife (CDFW) Office of Spill Prevention and Response (OSPR). When habitat disturbance cannot be avoided, the Emergency Response Action Plan shall provide stipulations for development and Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party implementation of site-specific habitat restoration plans and other site-specific and species-specific measures appropriate for mitigating impacts to local populations of special-status wildlife species and to restore native plant and animal communities to pre-spill conditions. Access and egress points, staging areas, and material stockpile areas that avoid specific habitat areas shall be identified. The Emergency Response Action Plan shall include species- and site-specific procedures for collection, transportation and treatment of oiled wildlife. The Emergency Response Plan shall be approved by the City prior to commencing any construction activities. ____________________________________________________________________________________________________________ _________ Table 8-4 Cultural Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party CR-1 Prior to beginning demolition of the existing City Maintenance Yard Building, Development During Project Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party guidelines shall be developed for the careful exposure of extant elements of the historic brick and mortar furnace. Once exposed, detailed documentation of the furnace shall be undertaken. Documentation shall be guided by the Historic American Engineering Record (HAER) standards. This documentation shall include production of high quality 35-mm photographs and plan drawings of building elements exposed, including but not limited to, a floor plan, any character-defining building features, and elevation drawings. All work carried out pursuant to the recordation of the furnace building shall be conducted by, or under the direct supervision of a person or persons meeting, at a minimum, the Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994) as an architectural historian. A written report detailing the HAER-like documentation shall be provided to the City upon completion the work. This report shall be produced on archivally stable materials and filed with the Hermosa Beach Historical Society. and implementation of a monitoring and documentation plan by a qualified archaeologist. building demolition within areas of recorded historical resources. Proponent and Construction Contractor CR-2a The design of the New City Maintenance Yard Building shall be compatible in design, styling, material, and massing of the adjacent City Hall complex. The building design should not attempt to replicate the New Formalist style, but it shall not conflict or contrast with the existing building style. The buildings constructed in the New City Maintenance Yard shall be no more than two Design of the New City Maintenance Building and landscape Design Phase Project Proponent and City Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party stories high. They shall not overpower or overshadow the existing building complex. CR-2b The landscaping associated with the proposed New City Maintenance Yard shall replicate the planting types surrounding the City Civic buildings, to the extent possible, in order to blend the new construction into the existing Complex. The final design of both the new building and landscape should be developed in consultation with an historic architect or architectural historian who meets Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994). Design of the New City Maintenance Building and landscape Design Phase Project Proponent and City CR-3a Prior to any ground-disturbing activities or building removal within the Proposed Project sites, an Archaeological Monitoring Plan shall be developed by a qualified archaeologist with provision for review and input by concerned Native Americans and approval by the City. The Plan will also address worker safety during building demolition and ground disturbing activities and during the implementation of the Remedial Action Plan. The Plan is to include provisions for archaeological and Native American monitoring, detailed documentation of all early twentieth-century artifact-bearing deposits exposed during ground- disturbing site work, and development of a clear collection policy for both prehistoric and historic artifacts, subsequent artifact analysis, reporting of Development and implementation of a monitoring plan by a qualified archaeologist in consultation with concerned Native The monitoring plan shall be submitted for review by the City of Hermosa Beach and approval prior to beginning Project Proponent and Construction Contractor Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party findings, and disposition and/or curation of any significant artifacts recovered. All reports of findings shall be filed with to SCCIC. American tribes. development. Plan shall be implemented prior to and during construction. CR-3b Any significant archaeological deposits remaining in the area of the previous City of Hermosa Beach Dump following over-excavation at the Proposed Oil Development Project site must be protected in place. Stabilization and covering of these archaeological deposits shall be monitored by a qualified historical archaeologist meeting the Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994). Following construction any remaining archaeological deposits must be stabilized and covered for protection. Following over- excavation Project Proponent and Construction Contractor CR-4 Should Project-related excavations be designed to exceed 45 feet in depth at the City Dump, or depths greater than 15 feet along the pipelines, or otherwise be shown to have the potential to impact intact San Pedro Sand deposits as described above, a Paleontological Resources Monitoring and Mitigation Plan (PRMMP) shall be developed by a qualified paleontologist in consultation with A paleontological resource monitoring and mitigation The monitoring plan shall be submitted for review by the Project Proponent and Construction Contractor Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party the City and implemented prior to or during Project-related ground disturbing activities. The Plan will also address worker safety during building demolition and ground disturbing activities and during the implementation of the Remedial Action Plan. program (PRMMP) for treatment of the paleontological resources will be developed and implemented. City of Hermosa Beach and approval prior to beginning development. Plan shall be implemented prior to and/or during construction. CR-5 Ground-disturbing activities in the area of the discovery shall immediately be halted or redirected. A temporary construction exclusion zone shall be established surrounding the site to allow for further examination and treatment of the find. A City representative shall immediately notify the Los Angeles County Coroner’s office by telephone. By law, the Coroner will determine within two working days of being notified if the remains are subject to his or her authority. If the Coroner recognizes the remains to be Native American, he or she shall contact the Native American Heritage Commission who will appoint The Native American Heritage Commission (NAHC) must be contacted by the Los Angeles Upon discovery of human remains. Project Proponent and Construction Contractor Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party the Most Likely Descendent (MLD). Additionally, if the remains are determined to be Native American, a plan will be developed regarding the treatment of human remains and associated burial objects and the plan will be implemented under the direction of the MLD. County Coroner, and a Most Likely Descendant must be designated. Any further treatment of the remains will occur in consultation with the MLD, the NAHC, and a qualified archaeologist. __________________________________________________________________________________________________________ Table 8-5 Fire Protection and Emergency Response Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party FP-1a The Applicant shall ensure adequate (3,000-5,000 gpm) water supplies are available from the existing water lines and hydrant system, by extending the 8 inch water main or some other source for water supplies that provides sufficient water supply rates, pressure and duration to comply with codes, standards and requirements of the LACFD and the HBFD. Installation of a fire pump, or installation of a piping connection to area water mains that can supply the flows, may be required to ensure the appropriate water flow and pressure requirements. The Applicant shall ensure that all area hydrants and water supplies are tested annually as to the NFPA standards for water flows and pressures, and shall ensure that the results are reported to the City of Hermosa Beach and the Hermosa Beach Fire Department. Review of water flow calcs and tests, annual reviews Before Phase 2 City of Hermosa Beach HBFD FP-1b The Applicant shall coordinate with the HBFD to integrate a community alert notification system for the proposed project into the City's existing alert system to automatically notify area residences and businesses in the event of an emergency at the project site that would require residents to take shelter or take other protective actions. The Applicant shall implement programs to ensure that all immediate neighbors are provide ample opportunity to participate in the notification system. Review and testing of system Before Phase 2 City of Hermosa Beach HBFD FP-1c The Applicant shall fund an additional FTE position at the HBFD, or equivalent, Training and Before Phase City of Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party for personnel with specific capabilities in inspection and code compliance associated with oil and gas production facilities. This arrangement shall be to the satisfaction of the HBFD. hiring completed at HBFD 2 Hermosa Beach HBFD FP-1d The Applicant shall develop emergency response plans addressing the facility's fire-fighting capabilities pursuant to the most recent NFPA requirements, Los Angeles County Fire Code, LACFD, California Code of Regulation, and API requirements, in coordination with and to the satisfaction of the LACFD and the City of Hermosa Beach Fire Department. These plans shall include, but not be limited to, fire monitor placement, water capabilities, fire detection capabilities, fire foam requirements, facility condition relating to fire-fighting ease and prevention, and measures to reduce impacts to sensitive resources. The plan should also address coordination with local emergency responders and area schools and daycare facilities. Review and approval of plans Before Phase 2 City of Hermosa Beach HBFD FP-1e The Applicant shall ensure that the emergency response planning includes development of evacuation plans of neighbors for an emergency scenario at the facility,. The plan shall be reviewed by the LACFD, HBFD and the City annually and updated as needed. The relevant portions of the plan shall be distributed to the public utilizing a method determined by the reviewing Agencies. Review of plan revision Before Phase 2 and Phase 4 City of Hermosa Beach HBFD FP-1f The Applicant shall ensure and make funding available to 1) upgrade the Review of Before Phase City of Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party dispatch system and procedures within Hermosa/Torrance/Redondo to implement a CAD-to-CAD system to improve dispatch times; and 2) extend the mutual aid agreements to become automatic aid agreements between the Hermosa Beach Fire Department, Redondo Beach Fire Department and the Torrance Fire Department and to include the Torrance HAZMAT unit, or provide for funding to provide additional equipment and to train a sufficient number of Hermosa Beach, Redondo Beach and/or Manhattan Beach Emergency Response personnel to provide first response HAZMAT capabilities. Mutual Aid agreement revision 2 and Phase 4 Hermosa Beach HBFD FP-1g The Applicant shall ensure, during Phase 2 and Phase 4, that the site shall have sufficient water containment capabilities, as per guidance and approval of the Fire Department. Area storm drains along 6th Street and Cypress Avenue shall be equipped with flapper-type valves to enable the closure of the storm drain system in the event of potential overflow. Review of plan and onsite inspections Before Phase 2 and Phase 4 City of Hermosa Beach HBFD FP-2a The Applicant shall ensure that design and construction comply with applicable codes and standards for equipment spacing, particularly those related to flare location and distances to public areas and distances from well drilling equipment to buildings. If this cannot be achieved, additional requirements shall include the construction of thermal radiation barriers or insulation on the crude oil tanks, installation of thermal barriers/walls around the flare stack, Third party audit report review Before Phase 2 and Phase 4 City of Hermosa Beach HBFD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party increasing the height of the flare stack during drilling, relocation of the flare stack, providing thermal radiation modeling to estimate the impacts of equipment on the crude tanks and process piping and public areas and the design and construction of blast walls as per API 752. Fire rated barriers shall be established, as per LACFD requirements, to ensure that all buildings within 100 feet of well drilling would be protected from thermal radiation. Thermal assessments shall be completed to ensure that the thermal radiation from the flare is within acceptable levels (as per API RP 521) and does notproduce damage to other equipment or nearby walls/soundwalls. The design and construction compliance status shall be verified by third-party audits under the direction of the City. FP-2b Fire protection measures specific to the crude oil containment system shall be provided, including the installation of manual fire foam systems with automatic detection and notification (to both the operators and the HBFD) capable of foaming in the perimeter of the crude oil containment system, wellhead area and the area immediately adjacent to combustion or spark producing equipment within or immediately adjacent to the crude oil containment area. The system shall be capable of being remotely activated from a safe location in the event of a crude oil fire. The highest level electrical classification achievable shall be Review of design documents Before Phase 2 and Phase 4 City of Hermosa Beach HBFD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party designated for all equipment located within the crude oil containment and wellhead area. ____________________________________________________________________________________________________________ _________ Table 8-6 Geological Resources/Soils Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party GEO-1a In coordination with the Caltech Seismological Laboratory, the Applicant shall install an accelerometer at the Project Site to determine site-specific ground accelerations as a result of any seismic event in the region (Los Angeles/Orange County and offshore waters of the Santa Monica Bay and San Pedro Channel). The drilling operator shall cease operations and inspect all onsite oil field-related pipelines, storage tanks, and other infrastructure following any seismic event that exceeds a ground acceleration at the Project Site of 13 percent of gravity (0.13 g). The drilling operator shall not reinstitute operations at the Project Site and associated pipelines until it can be determined that all oil Inspection by a California Registered Civil Engineer Following any seismic event that results in substantial ground accelerations at the Project Site, as pre- determined by City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party field infrastructure is structurally sound. a California- licensed geotechnical engineer. GEO-1b All seismic related recommendations provided by NMG Geotechnical (2012) shall be incorporated into the Proposed Oil Project design. These measures shall include, but not be limited to the following: - Drilled-in-place piles or cast-in-drilled-hole piles shall be constructed for foundations in the landfill area, i.e., northeast Project Site, to reduce seismically induced settlement. - Ground improvement techniques, including high pressure grout injection, i.e., compaction grouting, shall be used in the landfill area to reduce seismically induced settlement and allow construction of conventional shallow foundations. - Seismic design criteria for horizontal and vertical accelerations, identified in Tables 10 and 11 of the geotechnical report, shall be used during Proposed Project design (including incorporation of updated seismic design criteria from the 2013 California Building Code). - During Phase 1, the upper 2 to 4 feet of soil in the vicinity of the proposed well cellars shall be excavated and replaced with compacted fill. In addition, the Review and approval of geotechnical report. Approve geotechnical report prior to issuance of grading permit. City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party basement under the maintenance building shall be removed and filled in with compacted fill. In addition, the basement under the maintenance building shall be removed and filled in with compacted fill. - During Phase 3, the eastern portion of the site shall be excavated approximately 7 feet deeper than the majority of the proposed building pad, with a minimum of 3 feet of overexcavation below design grades, and recompacted to provide a uniform fill blanket below proposed tanks, compressors, and other equipment. - Asphalt pavement and underlying subgrade soils shall be designed to accommodate the proposed drill rig. Positive surface drainage shall be provided to direct runoff away from slopes and structures and toward suitable drainage devices. Ponding of water on structural pads shall not be allowed. GEO-2a Injection pressures associated wastewater injection shall not exceed reservoir fracture pressures as specified in California Code of Regulations Title 14, Division 2, Section 1724.10, and as approved by the California Division of Oil, Gas, and Geothermal Resources.. Comparing pressure measurements on each injection well to formation During waste water injection operations California Division of Oil and Gas and Geothermal Resources (DOGGR) Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party fracture pressure and Hermosa Beach Public Works Department GEO-2b In coordination with the Caltech Seismological Laboratory, the Applicant shall install an accelerometer at the Project Site to determine site-specific ground accelerations as a result of any seismic event in the region (Los Angeles/Orange County and offshore waters of the Santa Monica Bay and San Pedro Channel). Readings from the accelerometer shall be recorded at the Oil Field and transmitted in real-time to the Caltech Seismological Laboratory. The drilling operator shall cease operations and inspect all onsite oil field-related pipelines, storage tanks, and other infrastructure following any seismic event that exceeds ground acceleration at the Project Site of 13 percent of gravity (0.13 g). The drilling operator shall not reinstitute operations at the Project Site and associated pipelines until it can be determined that all oil field infrastructure is structurally sound. Monthly City of Hermosa Beach GEO-2c In the event that monitoring indicates that Proposed Oil Project-induced seismicity is occurring, wastewater injection operations shall be adjusted to alleviate such seismicity. The drilling operator shall first receive approval from Seismicity monitoring Following monthly monitoring, as City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party the California Division of Oil, Gas, and Geothermal Resources prior to any change (increase) in the injection operations. necessary GEO-3 All slope stability related recommendations provided by NMG Geotechnical (2012) shall be incorporated into the Proposed Oil Project design. Temporary excavations shall be stabilized per the latest edition of Cal/OSHA requirements for loose sands, including shoring or laying back of trench walls. Shoring along the northern perimeter of the Project Site shall be designed by an experienced structural engineer due to the proximity to existing buildings that must be protected from potential settlement and lateral movements. Submit temporary shoring plans and calculations. Prior to permit issuance City of Hermosa Beach GEO-4a Prior to approval of the first Phase 4 drilling permit, the Applicant shall have submitted and the City of Hermosa Beach and the California Coastal Commission shall have approved a Subsidence Monitoring and Avoidance Program, for both onshore and offshore areas. The onshore monitoring plan shall be completed throughout the life of this project, in accordance with Appendix A, Subsidence Monitoring Program, of the Subsidence and Induced Seismicity Technical Report, E&B Oil Development Project (Geosyntec Consultants 2012), included as Appendix _F of this EIR. The offshore monitoring plan shall be completed throughout the life of this project in accordance with the Offshore Subsidence Monitoring Program and Possible Monitor subsidence with GPS technology. Prior to Phase 4 Annually Hermosa Beach Public Works Department Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Mitigation Measures, Hermosa Beach, California (Coastal Environments 1998), included as Appendix _F of this EIR. The latter shall be updated, as applicable, to reflect advances in science since 1998. In addition, Section 7.6, Mitigation of Onshore Subsidence, of the latter report, shall not be applied to this mitigation measure, as the onshore monitoring program would be completed in accordance with the Geosyntec Consultants (2012) report. GEO-4b The Subsidence Monitoring Program shall include: Ground elevation survey methodologies with high vertical resolution; including onshore surface elevations and offshore bathymetric elevations; Prior to Phase 4 II drilling, establishment of a network of onshore and offshore survey or subsidence monitoring locations, including continuous GPS stations, GPS benchmarks, and tautly anchored offshore monitoring points, positioned within the City, outside the City, and in offshore areas, that are sufficiently spaced to draw conclusions about subsidence within the zone of influence of the Project; Because subsidence can occur for a variety of reasons, establishment of control points outside the zone of influence to allow differentiation of possible subsidence effects related to other activities; Monitor subsidence with GPS technology. Prior to Phase 4 Annually Hermosa Beach Public Works Department Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Use of InSAR imagery technology to evaluate regional subsidence patterns both within and beyond the proposed oil field; Sufficient monitoring frequency to establish trends in subsidence in order to distinguish background ground movement from any subsidence caused by proposed oil field operations; Reservoir monitoring, including documentation of produced fluid volume (oil, gas and water) and reservoir pressures at similar frequency to ground elevation measurements; Reporting requirements; and Action levels, as specified in the onshore and offshore subsidence monitoring reports. Surveying for both vertical and horizontal ground movement shall be completed along the perimeter and throughout the interior of the oil field, including both onshore and offshore areas, utilizing Global Positioning System technology in combination with a network of ground stations. The onshore continuous monitoring GPS stations shall include: Hermosa Beach Pier. The pier will serve as the furthest offshore point in the onshore monitoring program. Longfellow Outfall. This Outfall is larger and more structurally stable than some Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party of the other outfalls along the City’s coast. King Harbor Jetty. This location was selected to achieve a distribution of continuous monitoring points along the coast of Hermosa Beach. This will help provide a limited regional picture of the subsidence between survey events. GEO-4c An onshore and offshore baseline subsidence report shall be completed and made available to the City of Hermosa Beach and the California Coastal Commission at least two months and no more than six months prior to planned commencement of Phase 4 II drilling operations. Subsidence monitoring reports shall be completed annually and the results shall be forwarded to the California Coastal Commission and the City of Hermosa Beach for review, no more than one month following the end of each annual monitoring cycle. In addition, results shall be forwarded to the adjoining City of Redondo Beach and City of Manhattan Beach. Coordinate with Hermosa Beach Public Works Department At least two months prior to Phase 4 2 drilling operations Hermosa Beach Public Works Department GEO-4d In the event that the Global Position System monitoring indicates that significant subsidence, as defined by the onshore and offshore subsidence monitoring reports described in GEO-4a, is occurring in and/or around the Proposed Project area, wastewater or water reinjection operations shall be increased to alleviate such subsidence. The Applicant shall coordinate with the California Division of Oil, Gas and Geothermal Resources, which will approve increased Coordinate with California Division of Oil and Gas and Geothermal Resources Following monitoring results indicating subsidence California Division of Oil and Gas and Geothermal Resources (DOGGR) Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party levels of wastewater or water reinjection operations in accordance with the approved Subsidence Monitoring Program. The Applicant will also coordinate with the City of Hermosa Beach, Public Works Department, to verify that subsidence has been mitigated sufficiently. The Applicant will also coordinate with the City of Hermosa Beach, Public Works Department, to verify that subsidence has been mitigated sufficiently. (DOGGR) and Hermosa Beach Public Works Department GEO-4e In the unlikely event that subsidence related mitigation induces seismicity, corrective actions related to subsidence shall proceed until baseline surface elevations have been achieved, as subsidence related damage would likely be more pronounced in comparison to damage associated with Project related micro-seismicity. Upon reestablishment of baseline elevations, drilling operations shall cease until a balance between subsidence avoidance and induced seismicity avoidance can be established, as agreed upon by the California Division of Oil, Gas and Geothermal Resources, the California Coastal Commission, and the City of Hermosa Beach. Coordinate with California Division of Oil and Gas and Geothermal Resources (DOGGR) Following monitoring results indicating subsidence California Division of Oil and Gas and Geothermal Resources (DOGGR) and Hermosa Beach Public Works Department GEO-6 A Registered Civil Engineer shall analyze surficial and near-surface soils at the Project Site subsequent to grading and prior to on-site construction, to determine whether expansive soils are present. Similarly, soils at the Proposed Soil auger and analytical laboratory Prior to final design City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party City Maintenance Yard Project Site and along the proposed pipeline route shall be analyzed for soil expansion potential. In the event that clay-rich, expansive soils are present, foundations shall be designed to accommodate expansive soils and pipelines shall be placed within a blanket of non-expansive soils to prevent structural damage and/or failure. Foundation and pipeline design shall be reviewed and approved by a Registered Civil Engineer. GEO-7a Proposed Oil Project design must conform to the recommendations of HDR Schiff (2012), included within Appendix C in NMG Geotechnical (2012), or as per the City Engineer, and should occur prior to completion of the final Project design. Design for protection against corrosion Prior to final design City of Hermosa Beach GEO-7b All buried metal pipelines shall be coated and placed under impressed cathodic protection. To monitor for internal corrosion, corrosion coupons or equivalent measures can be utilized. Under impressed cathodic protection Prior to final design City of Hermosa Beach GEO-7c External pipe inspections shall be conducted for the exposed pipeline sections to ensure atmospheric coatings are in good conditions. All external inspections shall be documented and reviewed by the operations management and repairs documented, when necessary. Visual inspections Monthly City of Hermosa Beach GEO-7d In accordance with California Division of Oil, Gas, and Geothermal Resources Prepare under Prior to final California Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party pipeline regulations (Public Resources Code Sections 3013 and 3782), a pipeline management plan shall be implemented for the Project Site. Similarly, in accordance with United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration regulations, a pipeline management plan shall be implemented for proposed pipelines located beyond the perimeter of the Project Site. These plans shall include, but not be limited to mechanical testing, including ultrasonic and hydrostatic testing. guidance of California Department of Conservation Division of Oil, Gas, and Geothermal Resources and United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration design Division of Oil and Gas and Geothermal Resources (DOGGR), United States Department of Transporta- tion, Pipeline and Hazardous Materials Safety Administra- tion, and Cities of Hermosa Beach, Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Redondo Beach, and Torrance GEO-7e All concrete in contact with the high sulfate or corrosive soils shall be Type V concrete in accordance with the 2010 California Building Code. Pour proper concrete adjacent to corrosive soils During construction City of Hermosa Beach ___________________________________________________________________________________________________________ Table 8-7 Safety, Risk of Upset and Hazards Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1a The Applicant shall cause to be prepared an independent third-party audit, under the direction and supervision of the City, of the gas and crude oil plants and pipelines, once constructed, including the well pads, to ensure compliance with Fire Code, applicable API and NFPA codes, EPA RMP, OSHA PSM, DOGGR and SPCC and emergency response plans requirements. All audit items shall be implemented in a timely fashion, and the audit shall be updated annually, as directed by the City and the Los Angeles County Fire Departments. The final installation of the facilities shall include a seismic assessment, including walkthroughs, of equipment to withstand earthquakes prepared by a registered Structural Engineer in compliance with Local Emergency Planning Committee Region 1 CalARP guidance and the seismic assessment shall be updated, with walkthrough inspections, annually to ensure compliance with the codes and standards at the time of installation. Review of audit reports Before Phase 4 operations and annually thereafter LACFD HBFD Cities of Redondo Beach and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1b The Applicant shall ensure that the crude oil spill containment areas shall be designed as Class I Division I areas according to NFPA and NEC, or that spark producing equipment (such as the flare) would be isolated from the containment area, in order to reduce the potential for crude oil fires. The refrigeration system shall utilize non-flammable refrigerant. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-1c The Applicant shall ensure that all crude-oil truck haulers and a sufficient number of onsite personnel (at least two per shift) are trained in HAZMAT (to the HAZWOPER technician level at least) spill response and that each truck carries a spill response kit. Site inspections, review of contracts Before Phase 2 drilling City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1d The Applicant shall install automatic valves on the gas pipeline that will automatically shut down under a low pressure scenario at the Processing Facility Area for all pipelines leaving the processing plant, and shall install a backflow prevention device at the main gas pipeline tie-in location, to prevent the release of gas from the main transmission pipeline in the event of a rupture in the gas pipeline. The second, return pipeline shall remain isolated from the main gas pipeline during normal operations. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-1e The Applicant shall ensure that warning tape is installed above the pipelines within the pipeline trench to warn third parties that pipelines are located below the warning tape and that the pipelines are capable of utilizing a smartpig. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1f The odorant system shall have its own, smaller containment area around it limiting the spilled pool size to the minimum size attainable, in order to prevent any offsite impacts. Transfer of odorant shall utilize carbon canisters and a canister change-out/maintenance program to ensure that filling of odorant tanks do not cause offsite impacts. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD SR-1g The comingled produced gas shall be continuously monitored for hydrogen sulfide. If H2S levels in the produced gas from any individual well exceeds 100 ppm, then that well shall be shut in and abandoned as per DOGGR requirements. Wells shall be tested when fluids first flow, when the well is placed into production and periodically thereafter in order to ensure that all wells operate below 100 ppm H2S. Review of design documents and in-field inspections Before Phase 2 drilling City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-2 The Applicant shall sample soil during Phase 1 grading to ensure that soil lead contamination levels are below 9,500 mg/kg and that soil contaminated with TPH are below the regulatory guidelines. If soils are encountered above these levels, then those soils shall be removed from the site and transported to a disposal site. This may necessitate implementing the RAP during Phase 1 if substantial amounts of contamination are encountered. Review of design documents and in-field inspections Phase 1 City of Hermosa Beach ____________________________________________________________________________________________________________ _________ Table 8-8 Hydrology and Water Quality Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2a The Applicant shall properly maintain the associated crude oil pipelines, storage tanks, and processing facilities within and outside the Project Site, including smart-pigging according to State of California Office of the State Fire Marshal requirements and the standards outlined by the Department of Oil, Gas and Geothermal Resources, and the Los Angeles Regional Water Quality Control Board. The Applicant shall visually inspect onsite storage tank and processing equipment at least daily and provide a visual inspection of the crude oil pipeline right-of-way inspections on a weekly basis. Review of maintenance reports Before Phase 4 operations Annually Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2b The Applicant shall install a leak detection system for crude pipelines to the Exxon Mobil Refinery transfer of custody location. The system shall include pressure and flow meters, flow balancing, supervisor control and data acquisition system, and a computer alarm system in the event of a suspected leak. Temperature, pressure, and flow shall be monitored at each pipeline entry and exit. If any variable deviates by more than 10 percent of the normal operating range, the system shall trigger both audible and visual alarms. Flow balancing shall be conducted every 5 minutes, 1 hour, 24 hours, and 48 hours with the accuracy defined once the system is established and tested. Review of system design and testing results Before Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2c Personnel at the site shall be trained in equipment use and containment and cleanup of an oil spill. Dry cleanup methods, such as absorbents, shall be used on paved and impermeable surfaces and shall be included in a spill trailer maintained onsite. Spills in dirt areas shall be immediately contained with an earthen dike and the contaminated soil shall be dug up and discarded in accordance with local and state regulations. Review of training and equipment Before Phase 2 and Phase 4 operations and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2d Oil spills shall be contained and cleaned according to measures outlined in the then-current California Stormwater Quality Association Best Management Practice Handbook. Review of training and incident reports Before Phase 2 and Phase 4 operations, and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2e A United States Environmental Protection Agency, Spill Prevention, Control, and Countermeasure Plan, approved by the City of Hermosa Beach Fire Department, shall be implemented in the event of a spill. The Plan, which shall include a spill response trailer, equipment, and personnel training shall be completed prior to Phase 2 and Phase 4, and in compliance with the California State Oil Spill Contingency Plan (California Department of Fish and Game, Office of Spill Prevention and Response 2010) and the Los Angeles/Long Beach Oil Spill Contingency Plan (California Department of Fish and Wildlife 2011). Spill cleanup shall be completed under the oversight of the lead regulatory agency, with respect to oil spills, as identified in the Spill Prevention, Control, and Countermeasure Plan. Review of reports Before Phase 2 and Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2f The well cellar shall be lined with an impermeable membrane to prevent oil- based substances from seeping into groundwater supplies. All drilling muds storage shall be contained within Baker-type enclosed tanks, which shall be sized to accommodate high intensity rainfall events without overtopping. Review of design documents, field inspection Before Phase 2 and Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2g The Applicant shall install a check valve in the crude oil pipeline at the Herondo and Valley drive where the crude oil pipeline turns eastward and starts uphill. Review of design documents, field inspection Before Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2h The Applicant shall fund and install, under the direction of the Hermosa Beach Public Works Department, an oil/grit separators or oil/water separator located along Herondo Street downstream of Valley Drive, in order to capture small to medium sized spills before they reach the ocean. Installation and maintenance costs shall be provided by the Applicant and the devices shall be inspected by the Applicant to ensure that the "trap" is operational before any storm events. Review of design documents, field inspection Before Phase 4 operations, and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2i The Applicant shall utilize a smaller 6" ERW pipe and a heat and impact resistant coating at a minimum comparable to a 3-layer fusion bonded epoxy (such as BrederoShaw 3LPP) and weld coverings equivalent to sleeves with epoxy primer. Specification of the pipe and coating shall approved by the City. Review of design documents, field inspection Before Phase 4 operations City of Hermosa Beach, CSFM Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2j The Applicant shall install a 3 sack slurry starting 6 inches above the pipe to the base of the pavement or ground surface and lay strips of warning tape over the top to prevent third-party damage. Review of design documents, field inspection Before Phase 4 operations City of Hermosa Beach Table 8-9 Noise and Vibration Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-1a Increase the height of the noise barrier on all sides of the site to 24-feet (24-feet is the maximum feasible height for a noise barrier during Phase 1). Minimum sound insulation performance of the barrier shall remain at STC-25. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach NV-1b The gates on the east and south sides of the site shall be 24-feet high, consistent with the height of the acoustical barrier around the perimeter of the site. The gates shall have no holes or gaps in them and shall be designed to deliver a minimum sound insulation performance of STC-25. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach NV-1c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2a Increase the height of the noise barriers on all sides of the site from 32-feet to 35-feet (35-feet is the maximum height allowed). Minimum sound insulation performance of the barrier material should be STC-32. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2d Install pads on the V-door and other appropriate areas, timbers and pads on the drill deck, pads between drill and casing pipe while in storage and pad and timbers at the boards on the mast to reduce metal-on-metal noise. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2e Provide full acoustical enclosures around the mud pumps. The enclosures shall be factory-assembled by a manufacturer with a proven track-record of building noise-reducing enclosures for industrial applications. The total sound power level radiated by the enclosure shall not exceed 77 dBA, including noise contributions from: the access door(s), observation windows, ventilation openings and ventilation fans (if required). Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2f Provide enhanced inlet and outlet silencers for the Hydraulic Power Unit enclosure and upgrade the walls, roof and floor of the enclosure as necessary to limit the total sound power level radiated by the enclosure to 77 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2g The acoustical shroud around the drilling mast shall be comprised of acoustical blankets material with a minimum STC rating of 25. The acoustical blankets material shall provide continuous coverage of three sides of the mast and shall cover the uppermost 26-feet of the fourth side. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2h Provide acoustical treatment within the combustor fan housing and/or at the ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2i Eliminate use of the combustor during drilling in Phase 2 or prior to the initiation of production occurring concurrent with drilling in Phase 2, acoustical treatment shall be provided: within the combustor fan housing and/or ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA; and to the combustor stack to limit the power level radiated by the stack to 80 dBA.. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2j During the drilling portion of Phase 2, implement a “Super-Quiet Mode” of operation between the hours of 2AM and 5AM, during which time drilling would essentially be suspended to minimize noise. Super-Quiet Mode would impose the following additional measures and limitations: no pipe-handling of any kind anywhere on the project site, shakers switched off, top drive and rig floor completely enclosed on four sides by acoustical blankets material with a minimum STC rating of 25, operation of the top drive limited to “exercising” the pipe string only, top drive travel limited to the bottom half of the drilling rig mast. Super-Quiet Mode shall be implemented from the outset of drilling work during Phase 2; however, if monitoring shows consistently that noise emissions for normal drilling operations (with mitigation measures NV2a through NV2i in place) would result in less-than-significant impact during all or part of the period between 2AM and 5AM, the Applicant may, at the discretion of the City, be permitted to reduce the hours Super-Quiet Mode operations, or eliminate Super-Quiet Mode altogether. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-3a Increase the height of the noise barriers on all sides of the site from 32-feet to 35-feet (35-feet is the maximum height allowed). Minimum sound insulation performance of the barrier material should be STC-32. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-3b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-3c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-3d Provide acoustical treatment within the combuster fan housing and/or at the ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-4a Increase the height of the noise barrier on all sides of the site to 24-feet (24-feet is the maximum feasible height for a noise barrier during Phase 3). Minimum sound insulation performance of the barrier shall remain at STC-25. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach NV-4b The gates on the east and south sides of the site shall be 25-feet high, consistent with the height of the acoustical barrier around the perimeter of the site. The gates shall have no holes or gaps in them and shall be designed to deliver a minimum sound insulation performance of STC-25. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-4c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach NV-6a Increase the height of the noise barriers on all sides of the site from 32-feet to35-feet (35-feet is the maximum height allowed by zoning code). Minimum sound insulation performance of the barrier material shall be STC-32. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-6c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. In the event that a permanent 35-foot wall is built, the interior surfaces of the wall (i.e. those facing inwards towards the drilling and production operations) shall be treated with exterior grade acoustical panels offering equivalent sound absorption performance to that specified in this Measure above a height of 10-feet from the ground. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6d Install pads on the V-door and other appropriate areas, timbers and pads on the drill deck, pads between drill and casing pipe while in storage and pad and timbers at the boards on the mast to reduce metal-on-metal noise. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6e Provide full acoustical enclosures around the mud pumps. The enclosures shall be factory-assembled by a manufacturer with a proven track-record of building noise-reducing enclosures for industrial applications. The total sound power level radiated by the enclosure shall not exceed 77 dBA, including noise contributions from: the access door(s), observation windows, ventilation openings and ventilation fans (if required). Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-6f Provide enhanced inlet and outlet silencers for the Hydraulic Power Unit enclosure and upgrade the walls, roof and floor of the enclosure as necessary to limit the total sound power level radiated by the enclosure to 77 dBA. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6g The acoustical shroud around the drilling rig mast shall be comprised of acoustical blankets material with a minimum STC rating of 25. The acoustical blankets material shall provide continuous coverage of three sides of the mast and shall cover the uppermost 26-feet of the fourth side. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-6h During the drilling portion of Phase 4, implement a “Super-Quiet Mode” of operation between the hours of 2AM and 5AM, during which time drilling would essentially be suspended to minimize noise. Super-Quiet Mode would impose the following additional measures and limitations: no pipe-handling of any kind anywhere on the project site, shakers switched off, top drive and rig floor completely enclosed on four sides by acoustical blankets material with a minimum STC rating of 25, operation of the top drive limited to “exercising” the pipe string only, top drive travel limited to the bottom half of the drilling rig mast. Super-Quiet Mode shall be implemented from the outset of drilling work during Phase 4; however, if monitoring shows consistently that noise emissions for normal drilling operations (with mitigation measures NV6a through NV6g in place) would result in less-than-significant impact during all or part of the period between 2AM and 5AM, the Applicant may, at the discretion of the City, be permitted to reduce the hours of Super-Quiet Mode operations, or eliminate Super-Quiet Mode altogether. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-7a Increase the height of the masonry walls on the north and west sides of the site to a minimum of 27-feet. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-7b Apply outdoor acoustical panels to all available surfaces of the north and west walls that face the production operations above a height of 10-feet above the ground. The purpose of the acoustical panels is to control reflection of production noise in the direction of the sensitive uses to the east and south. The acoustical panels shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.28, 0.68, 0.95, 0.86, 0.89, 0.72. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-7c Well workover rigs shall be powered by electric drive/sources or “ultra-quiet” generators or engines - either diesel or natural gas-powered - that are capable of operating below the noise significance thresholds for daytime operation. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Table 8-10 Transportation and Circulation Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-1a For Phases 1-3, the Applicant shall fund, through and in consultation with the School District and Safe Routes to School, an afternoon crossing guard to be stationed at the Project Site area to ensure pedestrians passing nearby the Project Site have assistance in crossing the streets and the entrances/exit of the Project Site. Alternately, the Applicant shall ensure that trucks do not travel to and from the Project Site unless school is in session (i.e. truck travel prohibited on Valley Drive after 2:48 p.m., on Wednesdays after 1:45 p.m. or on school minimum days after 12:45 p.m.). The Applicant shall consult with the School District to ensure timing is current. Review of contracts and site inspections Prior to construction activities City of Hermosa Beach TR-1b For Phases 1-3, the Applicant shall install, subject to the approval of the City Public Works Department, warning signs and blinking yellow lights one block north and south (if applicable with possible one-way on Valley Drive) of the Project Site warning vehicle traffic that trucks may be entering and exiting the roadway. Blinking lights shall only operate when trucks are utilizing the roadway (not 24 hours per day). Review of design documents and site inspections Prior to construction activities City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-1c The Applicant shall ensure that all trucks accessing the Project Site and utilizing the Pier Avenue/Valley Drive intersection are less than 65 feet long to prevent safety hazards at the double intersection on Pier Avenue between Valley Drive and Ardmore Avenue. If trucks longer than 65 feet are required, then flagger shall be used at the Pier Avenue and Valley/Ardmore intersection. Review of contracts and site inspections Phase 1-4 Prior to construction activities City of Hermosa Beach TR-1d For Phases 1-3, the Applicant shall, with the approval and coordination of the City Public Works Department, either 1) restripe Valley Drive south of Pier Avenue to be a southerly directed one-way street. No on-street parking shall be allowed on Valley Drive between 6th Street and 8th Street to allow for sufficient line of sight for trucks entering and exiting the Project Site; or 2) restripe the section of Valley Drive between 2nd Street and Herondo Street to make it two- way and direct all truck traffic along Herondo Street to approach the project site from the south. Review of design documents and site inspections Prior to pipeline construction activities City of Hermosa Beach TR-2a Pipeline construction activities within the Pipeline right-of-way shall be limited to weekday between the hours of 9:00 a.m. and 3:00 p.m., unless the applicable municipality approves a specific exception to the time limit for periods of limited duration, subject to measures required by the municipality to protect the public health and safety. The Applicant shall coordinate with adjacent jurisdictions throughout the design and construction phase. Review of design documents and site inspections Prior to pipeline construction activities Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-2b The applicant shall implement a Construction Traffic Management Plan (CTMP) during Pipeline construction that includes the following pursuant to the procedures and subject to approval of the applicable municipality: 1) Require the Pipeline contractor(s) to obtain and follow street construction permits in the affected areas (Cities of Hermosa Beach, Redondo Beach, and Torrance, and Caltrans facilities - PCH and Hawthorne Boulevard); 2) Develop detour and traffic management plans consistent with the affected City’s standard roadway plans (e.g., Torrance Street Standard T603), the California Manual of Uniform Traffic Control Devices (MUTCD), or the Work Area Traffic Control Handbook (WATCH); 3) Revise Pipeline construction schedules to minimize access impacts to adjacent residents and businesses; and 4) Ensure that all affected residences and business have adequate emergency access during all times and phases of construction. The Applicant shall coordinate with adjacent jurisdictions throughout the design and construction phase. Approval of CTMP Prior to pipeline construction activities Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-3a The applicant shall be prohibited from routing Proposed Oil Project-related heavy truck exceeding 20,000 pounds on 190th Street between Anza Avenue and PCH, except during Pipeline construction. The Applicant shall comply with all requirements of the applicable city. Use of alternative route Phases 1-4 Cities of Hermosa Beach, Redondo Beach, and Torrance TR-3b The applicant shall route inbound and outbound heavy (>20,000 pounds) truck traffic along PCH and Artesia Boulevard, which are designated truck routes. Use of alternative route Phases 1-4 Cities of Hermosa Beach, Redondo Beach, and Torrance TR-3c Applicant shall supply private parking sufficient to meet all parking demands and shall direct all employees and contractors to park within Applicant’s private parking areas, or to utilize an alternative parking program approved by the City. Review of Plans and onsite inspections Phase 1-4 City of Hermosa Beach TR-4a The City shall design the permanent Proposed City Maintenance Yard so that it does not enter/exit directly onto Valley Drive. Review of Plans Phase 3 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-4b If the permanent Proposed City Maintenance Yard Project affects the sidewalk, then the design shall incorporate a sidewalk design along Valley Drive which utilizes a landscape buffer to separate the pedestrians from the street. Review of Plans Phase 3 City of Hermosa Beach Table 8-11 Water Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party WR-1 Prior to approval of demolition and new construction, a Registered Civil Engineer in the State of California shall evaluate the capacity of the existing sewer line system, beginning at the proposed tie-ins on Valley Drive for the Proposed City Maintenance Yard Project and 6th Street for the Proposed Oil Project, and continuing downstream to the Sanitation Districts of Los Angeles County sewer system, prior to any connections. A 7-day capacity performance test shall be performed, based on Sanitation Districts of Los Angeles County average wastewater generation factors, to determine baseline and peak flows, and to ensure the sewer has adequate capacity in the downstream areas. The Area study of the proposed sewer line and a 7-day performance capacity test should be performed at select Prior to issuance of permit City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party capacity analysis shall be submitted to the City Public Works Department and the Districts for review and approval. In the event that existing sanitary sewer facilities are insufficient to accommodate increased flows from the Project Site, the Applicant shall provide mobile sanitary facilities (i.e., toilet, sink, and urinal) for onsite personnel, as necessary. downstream locations to verify the adequacy of the existing sewer. WR-2 Implement MM HWQ-2a through HWQ-2d. See HWQ-2a through HWQ- 2d See HWQ-2a through HWQ- 2d See HWQ-2a through HWQ-2d WR-3a The Applicant shall complete a site-specific Area of Review/Zone of Endangering Influence analysis, per Division of Oil, Gas, and Geothermal Resources requirements, to determine if oil and gas wells are present that might serve as conduits for injected liquids to migrate upward to underground sources of drinking water. In the event that such wells are present, those wells shall be plugged and abandoned such that underground sources of drinking water (i.e., less than 10,000 mg/L total dissolved solids) are protected. Plugging and abandonment of those wells shall include zonal isolation plugs outside all casings and shall be completed per current Division of Oil, Gas, and Geothermal Resources standards. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to initiation of injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party WR-3b The Applicant shall confine injected fluids into the intended zone of injection in order to adequately protect underground sources of drinking water. Injection well cement shall be placed at the base of all underground sources of drinking water, and not just at the base of fresh water, to protect water with total dissolved solids content ranging from 3,000 mg/L to 10,000 mg/L. Coordination with Division of Oil, Gas, and Geothermal Resources During injection well drilling and injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources WR-3c The Applicant shall complete step-rate tests, using bottom-hole and surface pressure gauges, such that maximum allowable surface injection pressures are set at a maximum of 95 percent of the fracture pressure of the formation being injected. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party WR-3d The Applicant shall ensure that the hydrostatic pressure in overlying West Coast Basin aquifers is not exceeded during injection over the active life of the disposal wells. To ensure that this does not occur, the static reservoir pressure shall be monitored on a periodic basis, per Division of Oil, Gas, and Geothermal Resources requirements, and injection into the receiving zone shall cease if and when the hydrostatic pressure is exceeded. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources WR-3e The Applicant shall meet with Division of Oil, Gas, and Geothermal Resources staff annually to review the status of the waste water injection wells. Any deficiencies identified by Division of Oil, Gas, and Geothermal Resources staff shall be immediately rectified by the Applicant. Coordination with Division of Oil, Gas, and Geothermal Resources Annually following initiation of Phase 2 City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources 1 Development Agreement between City of Hermosa Beach and E&B Natural Resources DEVELOPMENT AGREEMENT BY AND BETWEEN CITY OF HERMOSA BEACH AND E&B NATURAL RESOURCES MANAGEMENT CORPORATION THIS DEVELOPMENT AGREEMENT (“Development Agreement” or “Agreement”) is entered into as of the ____ day of ______________, _____, by and between the CITY OF HERMOSA BEACH, a California municipal corporation ("City"), and E&B NATURAL RESOURCES MANAGEMENT CORPORATION, a California corporation (“E&B”). RECITALS A. The City is the owner of that certain real property in the City of Hermosa Beach, County of Los Angeles, and State of California described in Section 2.4 of this Agreement (Exhibit A to this Agreement), and also known informally as the City Maintenance Yard (“Property” or “City Maintenance Yard”). B. On or about January 14, 1992, the City entered into Oil and Gas Lease No. 2 (“Lease”) with Macpherson Oil Company, a California corporation, for itself and for Windward Associates, a California limited partnership, of which it is the general partner (collectively “Macpherson”). The Lease was approved by the California State Lands Commission (“CSLC”). The Lease authorized Macpherson to perform oil and gas extraction activities in the tidelands granted to the City by the State of California, and also authorized Macpherson to utilize the Property for oil and gas drilling activities (“Macpherson Project”). C. During the 1990s, Macpherson sought and obtained approvals for the Macpherson Project from the City, the CSLC, the California Coastal Commission and the South Coast Air Quality Management District. In 1995, the voters of the City passed Proposition E, an initiative to ban oil drilling in the City. During this time, and subsequently, Macpherson, the City, the CSLC, and opponents to the Macpherson Project were parties to several lawsuits regarding the 2 Development Agreement between City of Hermosa Beach and E&B Natural Resources Macpherson Project, including an action by Macpherson against the City in which the court concluded that regarding whether Proposition E constituted a breach of the Lease (“Macpherson Lawsuit”). Macpherson’s Lawsuit addressing the issue of causation (i.e. whether the City’s termination of the project for health and safety reasons was justified) and seeking damages against the City was scheduled for trial in April 2012. The trial court in the Macpherson Lawsuit determined that the adoption of Proposition E constituted a breach of the Lease, subject to certain City defenses, and scheduled a trial in April 2012 to determine Macpherson’s damages. D. E&B, who had no prior relationship with Macpherson, investigated the Macpherson Project and approached the City and Macpherson with a proposal to settle the Macpherson Lawsuit and to provide E&B with a potential opportunity to proceed with “a state- of-the-art directional well oil drilling project conducted from an urban drill site located on the City’s maintenance yard” and “an opportunity to persuade the City’s electorate that a state-of- the-art directional well oil drilling project conducted from the City’s maintenance yard can be accomplished safely and with financial beneifits to all of the parties.” (Settlement Agreement, p. 2.) On March 2, 2012, the City, Macpherson and E&B entered into a Settlement Agreement and Release (“Settlement Agreement”). E. The Settlement Agreement, among other consideration, provided for the dismissal of the Macpherson Lawsuit, certain payments to Macpherson, and the assignment to E&B of Macpherson’s rights under the Lease and all other permits for the Macpherson Project which would allow E&B to proceed with a redesigned oil development project (“Project”) under certain conditions. Under the terms of the Settlement Agreement, the City is required to place on the ballot, in a manner that comports with all applicable law, a measure that asks the voters whether to approve, among other things, “a development agreement that would afford E&B a vested right to proceed with the Project . . . .” (Settlement Agreement, p. 7.) F. The California Elections Code sets forth the procedures for a local legislative body to submit a measure to the voters of the City. As contemplated in the Settlement Agreement, the City elected to undertake environmental review of the Project referenced in paragraph E above in accordance with the requirements of the California Environmental Quality Act (“CEQA”). On July 8, 2014, the City Council of City certified an Environmental Impact Report in compliance with 3 Development Agreement between City of Hermosa Beach and E&B Natural Resources CEQA by its adoption of Resolution No. 14-6908. G. The California Legislature enacted Section 65864 et seq. of the Government Code, which provides that cities and counties may enter into development agreements with persons having legal or equitable development interests in real property. Section 65867.5 of the Government Code states that a development agreement is a “legislative act” to be approved by ordinance, and the California Constitution establishes the right of voters to approve legislative acts. Elections Code section 9222 authorizes the City Council to submit any ordinance to the voters for their approval. Section 65869 of the Government Code mandates Coastal Commission approval for any development agreement in an area where a local coastal program has not been certified. H. The City has adopted rules and regulations for consideration of development agreements, pursuant to Government Code Section 65865, in Chapter 17.64 of the City’s Municipal Code. I. In compliance with the Settlement Agreement and all other applicable law, the City submitted the [insert title of Ballot Measure] (“Ballot Measure”) to the voters of the City on [insert date] in compliance with California Elections Code Section 9222. The Ballot Measure includes the following legislative approvals: 1) an amendment to the Land Use Plan of the Local Coastal Program (a component of the City’s General Plan) to modify the land use designation for the Property to allow for the implementation the Project and to provide energy policies in compliance with the California Coastal Act; 2) various amendments to the Municipal Code to allow the Project to proceed on the Property and to remove the restriction on the City’s use of project royalties; 3) a franchise for oil and gas pipelines; 4) amendments to the Oil Code; and 5) this Development Agreement, and in connection with these legislative approvals, CEQA findings including a statement that the project benefits outweigh its unavoidable environmental impacts (i.e. a statement of overriding considerations). These legislative approvals are referred to in this Agreement as “Ballot Measure Approvals.” J. By approving the Ballot Measure and this Agreement, the voters of the City have determined that the public interest is served by entering into this Agreement because the Project, described in Exhibit B to this Agreement, will provide for the remediation of the City Maintenance Yard, and is expected towill provide substantial economic benefits to the City and to the 4 Development Agreement between City of Hermosa Beach and E&B Natural Resources Community in the form of royalties as described in the Lease and as further set forth in Exhibit C to this Agreement. K. This Agreement will bind future City Councils to the terms and obligations specified in this Agreement and limit, to the degree specified in this Agreement, the future exercise of the City's ability to regulate development on the Property. L. Upon approval by the voters of the Ballot Measure Approvals, this Agreement and the Project will be consistent with, and will serve to implement the policies, objectives, and standards of the elements of the City of Hermosa Beach General Plan and will be consistent with the standards of the Hermosa Beach Municipal Code (including the Oil Code). M. This Agreement and the Project is consistent with, and will serve to implement, the provisions of Article 3 of the California Coastal Act. N. This Agreement will eliminate uncertainty in planning and provide for the orderly development of the Property and generally serve the public interest. AGREEMENT NOW THEREFORE, in consideration of the above recitals, the mutual covenants and conditions herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agrees as follows: 1 DEFINITIONS For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Agreement" means this Development Agreement by and between the City and E&B. "Approval Date" means the date on which the Ordinance approving this Development 5 Development Agreement between City of Hermosa Beach and E&B Natural Resources Agreement becomes effective under Elections Code Section 9217, specifically ten days after the date the vote is declared by the City Council [INSERT DATE]. “Ballot Measure” means the measure that was approved by the voters on the Election Date. “Ballot Measure Ordinance” or “Ordinance” means the ordinance that accomplishes the Ballot Measure Approvals. “Ballot Measure Approvals” means the: 1) an amendment to the Land Use Plan of the Local Coastal Program (a component of the City’s General Plan) to modify the land use designation for the Property to allow for the implementation the Project and to provide energy policies in compliance with the California Coastal Act; 2) various amendments to the Municipal Code to allow the Project to proceed on the Property and to remove the restriction on the City’s use of project royalties; 3) a franchise for oil and gas pipelines; 4) amendments to the Oil Code; and 5) this Development Agreement, and in connection with these legislative approvals, CEQA findings including a statement that the project benefits outweigh its unavoidable environmental impacts (i.e. a statement of overriding considerations). "CEQA" means the California Environmental Quality Act, Section 21000, et seq., of the California Public Resources Code. "City" means the City of Hermosa Beach, California. "City Council" means the City Council of the City of Hermosa Beach. "Code" or “HBMC” means the Municipal Code of the City of Hermosa Beach. "Commencement Date" means that date when the Commission approves the Development Agreement under Government Code Section 65869; provided, however, if litigation challenging the validity of this Agreement including any Project Approvals and/or environmental review pursuant to CEQA should be brought against the City or the Coastal Commission, the Commencement Date shall be the date such litigation is concluded in a manner that permits the commencement or continuation of the parties' rights and obligations under this Agreement. 6 Development Agreement between City of Hermosa Beach and E&B Natural Resources “Commission” means the California Coastal Commission. “Conditional Use Permit” means the Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93-5632, and the validity of which was confirmed by the Settlement Agreement, which is to be abandoned and superseded pursuant to the terms of this Agreement. "Current Land Use Regulations" means the ordinances, resolutions, rules, regulations, requirements and official policies of the City in force as of the date on which the City Council calls the election on the Ballot Measure, as amended by the Ballot Measure Approvals. "Development Agreement Act" means Section 65864 et seq., of the California Government Code. “E&B” means E & B NATURAL RESOURCES MANAGEMENT CORPORATION, a California corporation in the business of exploring for and producing oil and gas and each of its respective successors and assigns to all or any portion of its interests in the Property during such time as such portion is subject to this Agreement. “Election Date” means March 3, 2015. "Event of Default" is defined in Section 5.1.1. "Exactions" means any requirement imposed by the City in connection with or pursuant to any land use regulation or land use approval process for the dedication of land, construction or improvement of public improvements or amenities, payment of development fees, or other mitigation measures required to mitigate the impacts of the development including, without limitation, all development impact fees or linkage fees, utility capacity fees, service or connection fees, major facilities fees, park fees, flood control fees, environmental impact mitigation fees, affordable housing fees, arts fees, transportation fees, child care fees and any similar governmental fees, charges and exactions required for the development of projects or property. "Force Majeure Delay" is defined in Section 6.23. "Future Ministerial Permits" is defined in Section 3.2.1. 7 Development Agreement between City of Hermosa Beach and E&B Natural Resources "General Plan" means the General Plan of the City as of the Effective Date. “Off-site Project Components” or “Off-site Components” means the Project components in the City of Hermosa Beach outside of the Property as described in Exhibit B to this Agreement, including (1) oil and gas pipelines along Valley Drive, Hermosa Beach, California, (2) supply staging/storage at 601 Cypress Avenue, Hermosa Beach, California, (3) a parking lot at 636 Cypress Avenue, Hermosa Beach, California, and (4) various locations outside the jurisdiction of Hermosa Beach. The location of (2) is more particularly described in Exhibit A-2 and the location of (3) is more particularly described in Exhi`bit A-3. “Oil Code” means the Hermosa Beach Oil Code, Chapter 21A (Oil Production), approved by the City with Ordinance No. 85-803. "Processing Fees" means all routine and generally applicable City-wide fees required by the City for processing applications and permits including, but not limited to, fees for land use applications, project permits, building applications, building permits, grading permits, maps and certificates of occupancy in effect at the time paid. Expressly exempted from Processing Fees are all Exactions. "Project" means the proposed oil and gas drilling and production project as described in the Project Description contained in Exhibit B. "Project Approvals" means the approvals for the Project as set forth in Section 2.6 of this Agreement. "Public Benefits" means those improvements to be constructed, services to be provided and/or amounts to be paid by E&B to the City as consideration for this Agreement pursuant to Section 2.1 and Exhibit C. "Term" means the term of this Agreement, as provided in Section 6.1 of this Agreement. "Zoning Ordinance" means the comprehensive Zoning Ordinance of the City, found in Chapter 17 of the Code of the City of Hermosa Beach as it exists on the Effective Date. 8 Development Agreement between City of Hermosa Beach and E&B Natural Resources 2 THE DEVELOPMENT AGREEMENT PROCESS 2.1 Statement of Benefits and Consideration. The voters of the City have determined that the Project is a development for which a development agreement is appropriate. Development of the Project in accordance with a development agreement will provide for the orderly development of the Property in accordance with the objectives set forth in the General Plan, including the Land Use Plan of the Local Coastal Program, as amended. Moreover, a development agreement for the Project will eliminate uncertainty in planning for and securing orderly development of the Property, a, ensure attainment of the maximum efficient utilization of resources within the City at the least economic cost to its citizens, and achieve the provision of public services, public uses, urban infrastructure and other goals and purposes for which the Development Agreement Act was enacted as set forth in Government Code Section 65864, all in the promotion of the health, safety and general welfare of the City of Hermosa Beach and its residents. In exchange for these and other benefits to the City, E&B will receive the assurance that E&B may develop the Project during the Term of this Agreement, subject to the terms and conditions herein contained. By approving Ballot Measure ___, the voters of the City have found and determined that this Agreement is consistent with the General Plan, including the Land Use Plan of the Local Coastal Program, as amended, and have approved this Agreement. This Agreement does not (1) grant density or intensity in excess of that otherwise established in the Project Approvals, (2) supersede, nullify or amend any condition imposed in the Project Approvals, (3) guarantee to E&B any profits from the Project, or (4) prohibit or, if legally required, indicate E&B’s consent to, the Property's inclusion in any public financing district or assessment district. The City is expected to will receive substantial benefits as a result of the development of the Property in accordance with this Agreement, as set forth in Exhibit C, in recognition of and in exchange for this Agreement and the benefits provided to E&B pursuant to this Agreement. The voters of the City acknowledge the adequacy of the consideration provided by E&B to the City pursuant to this Agreement. In consideration of the benefits, commitments and consideration to be provided by E&B pursuant to this Agreement and in order to strengthen the public planning process and 9 Development Agreement between City of Hermosa Beach and E&B Natural Resources reduce the economic costs of development, the voters of the City hereby provide E&B assurance that it can proceed with the development of the Property for the Term of this Agreement pursuant to the land use, density and intensity specified in the Current Land Use Regulations, the Project Approvals and this Agreement. E&B would not enter into this Agreement or agree to provide the public benefits, commitments and consideration described in this Agreement if it were not for the certainty provided by this Agreement that the Property can be developed during the Term of this Agreement in accordance with the Current Land Use Regulations and the Project Approvals including the land use, density and intensity set forth in the Project Approvals. 2.2 Public Hearings. On June 23, 2014, the Planning Commission of the City, after providing notice as required by law, held public hearings on the legislative elements of the Project, including this Agreement and the amendments to the Hermosa Beach Municipal Code and Coastal Land Use Plan and the EIR. The City Council, after providing public notice as required by law, similarly held public hearings on the Project, including this Agreement on July 8, 2014 and October 14, 2014[insert dates and specific code provisions]. 2.3 City Council and Voter Findings. The City Council adopted findings that review of the environmental impacts of this Agreement and the Project Approvals has been conducted in accordance with the provisions of CEQA and the State and local guidelines adopted thereunder, and the City Council has given consideration to such environmental review prior to placing the Ballot Measure on the ballot and has undertaken all actions necessary to comply with CEQA. In approving the Ballot Measure and this Agreement, the voters of the City have determined and found that this Agreement is consistent with the General Plan, including the Land Use Plan of the Local Coastal Program, as amended, and all other applicable City plans, policies and regulations, and is consistent with the standards of the Hermosa Beach Municipal Code (including the Oil Code), all as amended by the Ballot Measure Approvals. 2.4 Property. The Property includes all real property that is subject to this Agreement. The Property as of the Election Date is commonly known as City Maintenance Yard, as more fully described in Exhibit A-1 incorporated herein by reference. 2.5 The Project. The Project consists of the development, construction and operations on the 10 Development Agreement between City of Hermosa Beach and E&B Natural Resources Property permitted under this Agreement and the Project Approvals. The description of the Project and its uses are more fully described in the Project Description set forth in Exhibit B which is incorporated herein by reference. The Project includes Off-site Components within the City of Hermosa Beach, and other elements located outside of the City. 2.6 Project Approvals. The Project includes, without limitation, all items described in the Project Description contained in Exhibit B and incorporated herein by reference and the following Project Approvals: (a) Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93- 5632 (as set forth in Section 2.7 below, to be abandoned per HBMC Section 17.70.030 and superseded pursuant to the terms of this Agreement); (b) Environmental Impact Report, dated June 2014, prepared pursuant to CEQA and certified by the City Council on July 8, 2014 (with revisions identified in City Council Resolution No. 14-6908); (c) Amendments to the Land Use Plan and Land Use Plan Map of the Local Coastal Program (a component of the City’s General Plan), approved by Ballot Measure __ on ________________, and by Commission [insert Commission action] on ______________________; (d) Amendment to the Municipal Code, approved by Ballot Measure __ on _________________; (e) Franchise for Oil and Gas Pipelines, approved by Ballot Measure __ on _______________; (f) Amendment to the Oil Code, approved by Ballot Measure __ on _______________; and (e) Development Agreement, approved by Ballot Measure __ on 11 Development Agreement between City of Hermosa Beach and E&B Natural Resources _________________, and by Commission [insert Commission action] on _________________. 2.7. Abandonment of Conditional Use Permit. With adoption of the Ballot Measure, oil drilling and production is permitted on the Property subject to a development agreement. The relevant conditions of approval from the 1993 Conditional Use Permit (CUP) for oil development at the Property (Resolution No. 93-5632) are incorporated into this Development Agreement as Exhibit D-1 herein, and E&B shall comply with said conditions as required herein. Thus, upon the Commencement Date, this agreement will supersede the 1993 CUP, which shall no longer serve a regulatory purpose. Hermosa Beach Municipal Code Section 17.70.030 allows for voluntary abandonment of a Conditional Use Permit. This Agreement at the Commencement Date shall serve as both a written request to abandon the CUP and the City’s declaration that the 1993 CUP is abandoned. 3 VESTED DEVELOPMENT RIGHTS 3.1 Vested Rights to Develop. Subject to the terms, conditions, and covenants of this Agreement, including the Reservations of Power in Section 3.4, and the conditions of approval and mitigation measures attached hereto and incorporated herein as Exhibit D, E&B shall, as of the Approval Date, have a vested right to develop the Property and Project, including Off-site Components, in accordance with, and to the extent of, the Project Approvals, and the Current Land Use Regulations. The approved use of the Property, the density and intensity of use, the maximum height, footprint, and square footage of proposed buildings and structures, and provisions for reservation and dedication of land or public purposes shall be those set forth in the Project Approvals and the attached Exhibits. Nothing in this Agreement shall be deemed to obligate E&B to initiate development of the Project or any portion thereof within any period of time or at all, subject to the terms of the Lease and the Settlement Agreement, including but not limited to E&B’s obligation to proceed with due diligence provided for in Section 12.3 of the Settlement Agreement. 3.1.1 Certain Changes Prohibited Without Consent of E&B. Except as otherwise provided in this Agreement, during the Term, the City shall not, as to the Property and the 12 Development Agreement between City of Hermosa Beach and E&B Natural Resources Project, including Off-site Components, without the prior written consent of E&B, which may be withheld in E&B’s sole and unfettered discretion: (a) change the Current Land Use Regulations, or Project Approvals as they apply to the Property or Project so as to prevent or adversely affect development or construction of the Project in accordance with this Agreement, the Current Land Use Regulations or Project Approvals; or (b) apply to the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that is inconsistent with the Current Land Use Regulations or Project Approvals, so as to prevent or adversely affect development or construction of the Project in accordance with this Agreement, the Current Land Use Regulations or Project Approvals, or prevent or adversely affect the operation of the Project as contemplated hereby in accordance with the Current Land Use Regulations or Project Approvals; or (c) apply to this Agreement, the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that requires additional discretionary review or approval not otherwise required for the Project by the Current Land Use Regulations or Project Approvals; or (d) apply to this Agreement, the Property or the Project any new or amended ordinance, resolution, rule, regulation, requirement or official policy that materially, adversely affects the timing or phasing of construction or development, or which limits the availability of utilities or other infrastructure for the Project. For the purposes of this Section 3.1, “prevent or adversely affect development or construction of the Project” shall include, without limitation, any changes which fundamentally affect the ability of any of the permitted uses to operate within the Project (e.g. prohibit any of the uses in the Project Approvals, change parking standards for any of the uses, etc.). 3.1.2 Rights are Vested. Unless amended or terminated in the manner specified in this Agreement (and subject to the provisions of this Agreement), E&B shall have the rights and benefits afforded by this Agreement and this Agreement shall be enforceable by E&B and the City notwithstanding any growth control measure, initiative, proposition or any development moratorium adopted after the Approval Date, or any change in the General Plan, zoning, or subdivision regulations adopted by the City which alter or amend the Current Land Use Regulations or Project Approvals or the adoption of any new or amended ordinance, resolution, rule, regulation, requirement or official policy that is inconsistent with the Current Land Use Regulations or Project Approvals and so as to prevent or adversely affect development or construction of the Project in accordance with the Current Land Use Regulations or Project Approvals. This Section shall be construed to prohibit the City from applying to the 13 Development Agreement between City of Hermosa Beach and E&B Natural Resources Property or the Project, including any Off-site Components, any development moratorium or growth control measure that is adopted specifically to prohibit the construction or operation of the Project, or as an interim measure pending contemplated General Plan, Specific Plan or zoning changes, or as a general growth control management measure except as provided for pursuant to Section 3.4. 3.1.3 Future Changes to Current Land Use Regulations. Following the Approval Date, if the City modifies the Current Land Use Regulations in a manner that E&B, in its sole discretion, determines is more beneficial than the Current Land Use Regulations, then E&B may choose in its sole discretion to be governed by the modified land use regulations rather than the Current Land Use Regulations, without E&B being deemed to have waived or limited any rights, remedies or privileges under this Agreement. 3.2 Other Rights. 3.2.1 Future Ministerial Permits. E&B will seek additional ministerial permits as required by the City, including, without limitation, excavation only permits, grading permits, demolition permits, building permits, well permits, drilling permits and public works permits, as needed to implement the Project Approvals and to construct and operate the Project. Collectively, these ministerial permit applications are called the "Future Ministerial Permits". The City agrees that it will not unreasonably withhold or unreasonably condition any of the Future Ministerial Permits which must be issued by the City in order for the Project to proceed, provided that E&B reasonably and satisfactorily complies with all preliminary procedures, actions, payment of Processing Fees and criteria generally required for processing such Future Ministerial Permits, and provided further that such Future Ministerial Permits comply with this Agreement, the Current Land Use Regulations and the Project Approvals and approvals of other governmental agencies with jurisdiction over the Project. The City further agrees that no discretionary permits, other than the Project Approvals, are required from the City to construct and operate the Project. 3.3 Reservations of Power. 3.3.1 Limitations, Reservations and Exceptions. Notwithstanding any other 14 Development Agreement between City of Hermosa Beach and E&B Natural Resources provision of this Agreement, the following subsequent land use regulations shall apply to the development of the Property: (a) Processing Fees (but not Exactions) imposed by the City to cover the estimated actual costs to the City of processing applications for Project Approvals, fees for monitoring compliance with any Project Approvals, inspection fees, or fees for monitoring compliance with environmental mitigation measures. (b) Procedural regulations applied on a City-wide, nondiscriminatory basis relating to City entities required to review petitions or applications, forms of petitions and applications, notice requirements, information requested with petitions or applications, conduct of hearings, form of staff reports, nature and type of recommendations by City entities, appeal procedures and any other similar matters of procedure. (c) Regulations governing building codes and similar construction standards and specifications including, but not limited to, the California and International Codes, as they may be changed from time to time. (d) Regulations that are necessary to protect the public health and safety, including without limitation, development moratorium or limitation on the delivery of City-provided utility services, which meet each of the following requirements: (a) are based on genuine health, safety and general welfare concerns (other than general growth management issues); (b) which arise out of a documented emergency situation, as declared by the President of the United States, Governor of California, or the Mayor or City Council of the City of Hermosa Beach; and (c) are based upon its terms or its effect as applied, does not apply exclusively or primarily to the Property or the Project. To the extent possible, any such regulations shall be applied and construed so as to provide E&B with the rights and assurances provided under this Agreement. This subsection governs generally applicable emergencies in the area not specifically related to or caused by the Project. (e) Regulations that are not in conflict with the Project Approvals, Current Land Use Regulations or this Agreement. Any regulation, whether adopted by initiative or otherwise, limiting the rate, timing, phasing or sequencing of development of the Property shall be deemed to conflict with the Project and shall therefore not be applicable to the 15 Development Agreement between City of Hermosa Beach and E&B Natural Resources development of the Property. Any regulation limiting the permitted uses of the Property, limiting the density or intensity of use of the Property, or limiting the size, height or location of improvements on the Property shall be deemed to conflict with the Project Approvals and shall therefore not be applicable to the development of the Property. (f) Regulations that are in conflict with the Project, but as to which the E&B has given its prior written consent for such regulations to be applied to the Property or to the development of the Property. (g) Regulations applied on a City-wide, non-discriminatory basis that do not prevent or adversely affect development or construction of the Project. 3.3.2 Modification or Suspension by State or Federal Law. In the event that state or federal laws or regulations, or those of any regional authority having jurisdiction over the Project or Property, enacted after the Approval Date of this Agreement, prevent or preclude compliance with one or more of the provisions of this Agreement or the Project conditions, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such state, federal, or regional authority laws or regulations and to effectuate to the extent possible the terms of this Agreement. 3.3.3 Police Power. The parties acknowledge and agree that City is restricted in its authority to limit its police power by development agreement and that the foregoing limitations, reservations and exceptions are intended to reserve to City all of its police power which cannot be so limited. This Agreement shall be construed to reserve to City all such power and authority which cannot be restricted by development agreement. 3.3.4 Taxes, Assessments and Fees. Anything herein to the contrary notwithstanding, City may impose on the Project any new non-discriminatory, City-wide taxes, assessments and fees, including but not limited to business license taxes or franchise fees, but not including any Exaction or other fee designated to mitigate the impact of development of the Project. 3.4 Regulation by Other Public Agencies. It is acknowledged by the parties that other public agencies not within the control of the City may possess authority to regulate aspects of the development of the Property separately from or jointly with City, and this Agreement does 16 Development Agreement between City of Hermosa Beach and E&B Natural Resources not limit the authority of such other public agencies. Changes to the project mandated by such regulatory agencies shall be automatically included into this Development Agreement as authorized in Section 110.F of the Ballot Measure and shall supersede any inconsistent provisions herein. 3.5 Agreement and Assurances on the Part of E&B. Without in any way limiting E&B’s rights under Section 5.2.2 not to proceed with development of the Project and, in such an event, to terminate this Agreement in its sole and subjective business judgment, if E&B proceeds with the Project, E&B agrees that it will use commercially reasonable efforts, in accordance with its own business judgment and taking into account market conditions and economic considerations, to develop the Project, in accordance with the terms and conditions of this Agreement, the Current Land Use Regulations, the Lease and the Project Approvals. 3.6 Public Benefits. 3.6.1 The parties acknowledge and agree that development of the Project will result in public benefits as set forth in Exhibit C. The voters of the City acknowledge the adequacy of the consideration, including the Public Benefits, provided by E&B pursuant to this Agreement. 3.6.2 Exactions and Processing Fees. 3.6.2.1 Exactions. No Exaction may be imposed on this Project except as specifically articulated in this Agreement, and except as required by the conditions of approval and the Mitigation Monitoring and Reporting Program contained in Exhibit D. 3.6.2.2 Processing Fees. E&B shall pay to the City all applicable Processing Fees regularly charged by the City and the amount of such Processing Fees may be increased from time to time on a non-discriminatory City-wide basis. 3.7 Public Improvements and Utilities 3.7.1 Installation Obligations. The parties hereby agree that the obligations to install public improvements and utilities necessary for the development of the Property shall be 17 Development Agreement between City of Hermosa Beach and E&B Natural Resources as provided for in the Project Approvals. 3.7.2 City-Provided Utilities: Reservation of Sufficient Capacity. To the extent that it is within the control of the City, the City shall use its best efforts to ensure that there shall be sufficient capacity, facilities and services with respect to City-provided utilities to complete construction of the Project, provided that E&B bear all costs incurred by the City in doing so. The City agrees that if limitations in the provision of utilities become necessary due to the existence of an emergency situation, they shall be applied only to the extent necessary to respond to such emergency, and shall not be applied against the Property or the Project in a discriminatory manner. 3.7.3 City-Provided Utilities: Nondiscriminatory Rates and Provision of Service. The City agrees that rates and charges for City-provided utilities for the Property and Project shall not be set or imposed in a discriminatory manner, but shall be those rates and charges that are or would be generally applicable to any user of a comparable quantity and quality of the utility use in the City (i.e., any other entity whose use or consumption of the utility is comparable to that of E&B), and that the City shall not discriminate against the Property or the Project in the provision of any City-provided utilities (such as potable and reclaimed water, sewer and drainage). 3.7.4 Dedications, Reservations and Conditions of Development. The portions of Property to be reserved or dedicated for public purposes pursuant to this Agreement, if any, shall be that property described in the Project Approvals. Unless otherwise indicated herein, the property described in the Project Approvals to be reserved or dedicated for public use shall be dedicated by E&B as provided in the Project Approvals. The City shall take such actions as may be necessary to vacate any prior dedications, offers to dedicate and grants of easements that are no longer necessary for the development of the Project in accordance with this Agreement. 3.8 Mitigation Measures and Conditions of Approval. E&B shall at its own expense timely perform all mitigation measures identified in the environmental documentation for the Project and conditions of approval identified in the Project Approvals as set forth in Exhibit D. E&B shall have no duty to complete the mitigation measures or conditions of 18 Development Agreement between City of Hermosa Beach and E&B Natural Resources approval, except as otherwise set forth in this Agreement, if the contemplated development fails to occur. 4 ASSIGNMENT, AMENDMENT AND REVIEW 4.1 Assignment 4.1.1 Right to Assign. E&B shall have the right to sell, transfer or assign its rights or interests in the Property in whole or in part (provided that no such partial transfer shall be permitted to cause a violation of the Subdivision Map Act, Government Code Section 66410 et seq.) to any person, partnership, joint venture, firm or corporation at any time during the Term, other than Macpherson or any of its related entities, subject to the City’s consent, as provided in Subsection 4.1.2. The conditions and covenants set forth in this Agreement and incorporated herein shall run with the land and the benefits and burdens shall bind and inure to the benefit of the parties. Any such sale, transfer or assignment shall include the assignment and assumption of the rights, duties and obligations arising under or from this Agreement with respect to the property transferred and shall be made in strict compliance with the following requirements: (a) Except as provided in Section 6.17 of this Agreement, no sale, transfer or assignment of any right or interest under this Agreement shall be made unless made together with the sale, transfer or assignment of all or a part of the Property and then, only in accordance herewith. (b) Concurrently with the closing of such sale, transfer or assignment, E&B shall provide the City with an executed agreement by the purchaser, transferee or assignee and providing therein that the purchaser, transferee or assignee expressly and unconditionally assumes the duties and obligations of E&B under this Agreement to the extent of such transfer or assignment, in a form satisfactory to the City Attorney. (c) The purchaser, transferee or assignee shall provide the City with security equivalent to any security previously provided by E&B to secure performance of its obligations hereunder, if any, or under any of the Project Approvals. 19 Development Agreement between City of Hermosa Beach and E&B Natural Resources Any sale, transfer or assignment under Section 4.1 of this Agreement not made in strict compliance with the foregoing conditions shall constitute a default by E&B under this Agreement and any such assignment shall be void and of no effect. Notwithstanding the failure of any purchaser, transferee or assignee to execute the agreement required by subparagraph (b) of this Subsection 4.1.1, the burdens of this Agreement shall be binding upon such purchaser, transferee or assignee, but the benefits of this Agreement shall not inure to such purchaser, transferee or assignee until and unless such agreement is executed. 4.1.2 City’s Reasonable Consent Required. E&B may sell, transfer or assign its rights or interests in the Property in whole or in part and this Agreement to any other person, partnership, joint venture, firm, corporation, trust or other lawful entity other than Macpherson or any of its related entities with the City’s consent, which consent shall not be unreasonably withheld or conditioned or delayed (“Transfer”). In the event E&B desires to make such Transfer, E&B shall submit to the City a request for approval at least forty-fiveninety (9045) days prior to such Transfer, which approval shall not be unreasonably withheld, conditioned or delayed by the City. The City may withhold, condition or delay its approval upon finding of any of the following: (a) The proposed purchaser, transferee or assignee lacks the financial ability to perform the obligations of this Agreement; (b) The proposed purchaser, transferee or assignee lacks the necessary qualifications, competence, experience or capability to implement the development plan contemplated by the Project Approvals with the skill, expertise and quality equivalent to that of E&B; provided, however, if the proposed purchaser, transferee or assignee is a nationally or regionally recognized, or regionally known in Southern California, as an owner or developer of oil and gas facilities, such proposed purchaser, transferee or assignee shall be deemed to have met this requirement; or (c) The proposed purchaser, transferee or assignee has a documented record of performance failures operating oil drilling and production projects at other locations that resulted in environmental damage, injuries to person or property or other conditions or circumstances detrimental to public health, safety and welfare; 20 Development Agreement between City of Hermosa Beach and E&B Natural Resources (d) An Event of Default by E&B as defined in Section 5.1.1 has occurred and is continuing under this Agreement. E&B’s request for approval of a Transfer shall be accompanied by all documentation reasonably calculated to allow the City to evaluate the qualifications of the proposed Transferee; notwithstanding, E&B shall provide to the City such additional information and documentation that the City reasonably requests in order for the City to make any determinations provided for by this Subsection 4.1.2. E&B agrees to provide such information on a timely basis sufficient to permit the City to make its determinations within the forty-fiveninety (9045) day time period. Should the necessary documentation not be provided timely, or should the information and documents provided reasonably require additional review, evaluation and consideration by the City or the City’s consultants that cannot be completed within the ninety (90) day time period, the City may in its reasonable discretion extend this period as necessary to complete its review of the proposed transfer for an additional thirty (30) days, or longer if the reason for the delay is E&B’s failure to provide the documentation in a timely manner. 4.1.3 Applicability. The provisions of Sections 4.1.1 and 4.1.2 shall not be applicable to a Transfer as a result of which E&B retains at least a fifty (50) percent interest in the Property. or as a result of which E&B retains at least twenty-five (25) percent interest in the Property and maintains effective management control of the Project. 4.2 Changes and Amendments to Project 4.2.1 In the event E&B reasonably finds that a change or amendment in the Project Approvals is reasonably necessary or appropriate, E&B shall apply for any required changes to the Project Approvals. Any such application that does not require an amendment to the Zoning Ordinance, or General Plan shall be processed in the normal manner for processing such matters in accordance with the Current Land Use Regulations, except as otherwise provided by this Agreement, including the Reservations of Power. Any application that requires an amendment to the Zoning Ordinance, or General Plan shall be processed in the normal manner for processing such matters in accordance with the land use regulations in effect at the time the application is filed. 4.2.2 Minor Changes to Project - No Amendment of Agreement 21 Development Agreement between City of Hermosa Beach and E&B Natural Resources The parties acknowledge that refinements or modifications of the Project may be required during the Term. The parties agree that refinements and modifications which constitute a "Minor Change” in the Project or Project Approvals shall not require an amendment to this Agreement or public notice and a hearing. For any such Minor Change, the City shall not impose as a condition to approval any Exaction, except as authorized in this Agreement. The City Manager, subject to the City Council’s approval, shall be authorized to make the determination on behalf of the City whether a requested refinement or modification may be effectuated pursuant to this Section 4.2.2 or whether the requested refinement or modification is of such a character to require an amendment hereof pursuant to Section 4.2.3. The City Manager, subject to the City Council’s approval, shall be authorized to approve any Minor Changes hereunder on behalf of the City. If and when the parties find that Minor Changes are necessary or appropriate, they shall, unless otherwise required by law, effectuate such changes or adjustments through a letter prepared by the City Manager and approved by the City Council, which, after execution, shall be attached hereto as addenda and become a part hereof. The City Manager may consult with technical experts in making the determination that a requested refinement or modification is a “Major” or “Minor Change.” The City Manager shall not unreasonably withhold or delay its determination that a requested refinement or modification is a “Minor Change” as that term is used herein. The changes described below shall not be deemed Minor Changes; however, the examples listed below are listed for reference only, and are not intended to provide a complete list of changes that may not be deemed as Minor Changes: (a) Alters the permitted uses of the Property as a whole; (b) Requires an amendment to the Zoning Ordinance, or General Plan, or other legislative acts not contemplated in this Agreement; (c) Increases the density or intensity of use of the Property as a whole; (d) Constitutes a project requiring a subsequent or supplemental environmental impact report pursuant to Public Resources Code Section 21166; (e) Creates a situation adverse to public health or safety. 4.2.3 Other Changes. Any change in the Project which does not qualify as a 22 Development Agreement between City of Hermosa Beach and E&B Natural Resources "Minor Change" as defined herein shall require an amendment to this Agreement as provided in Section 6.9, and compliance with CEQA as applicable. 4.3 Annual/Special Review. 4.3.1 Annual Review. The City shall, at least every twelve (12) months during the Term of this Agreement, review the extent of good faith substantial compliance by E&B with the terms of this Agreement. Subject to the notice and cure procedure set forth in Section 5.1.2, such a periodic review may result in amendment or termination of this Agreement, provided a default has been established under the terms of this Agreement. Pursuant to Government Code Section 65865.1, as amended, E&B shall have the duty to file an annual review request with the City, pay any applicable Processing Fees for such annual review and demonstrate its good faith compliance with the terms of this Agreement at such periodic review. Processing fees for such review are to include, but are not limited to, all costs incurred by the City in retaining the necessary professionals and experts to provide the City with the necessary input regarding the annual review, including but not limited to City Attorney, consultant and other third parties the City deems necessary to conduct the annual review. Upon request by the City, E&B shall provide such information as may be necessary or appropriate in order to ascertain compliance with this Agreement. 4.3.1.1 Any party may address any requirement of this Agreement during the review. However, ten (10) days’ written notice of any requirement to be addressed shall be made by the requesting party. If at the time of review an issue not previously identified in writing is required to be addressed, the review at the request of either party shall be continued to afford sufficient time for analysis and preparation. 4.3.2 Special Review. The City Council may order a special review of compliance with this Agreement at any time. The Director of Community Development or City Council, as determined from time to time by the City Council, shall conduct such special reviews. Any special review shall comply with the procedural provisions and Processing Fees of an annual review as provided by Section 4.3.1. 4.3.3 Opportunity to be Heard. Upon written request to the City by E&B, E&B shall be permitted an opportunity to be heard orally and/or in writing at a hearing before the City 23 Development Agreement between City of Hermosa Beach and E&B Natural Resources Council regarding its performance under this Agreement. E&B shall also be heard before the City Council at any required public hearing concerning a review of action on the Agreement. Such hearings requested by E&B shall be subject to the Processing Fees provision of Section 4.3.1. 4.3.4 Information to be Provided E&B. The City shall, to such an extent as is practical, deposit in the mail to E&B a copy of staff reports and related exhibits concerning contract performance a minimum of seven (7) business days prior to any such review or action upon this Agreement by the Planning Commission or the City Council. 5 DEFAULT, REMEDIES AND TERMINATION 5.1 Enforceability. 5.1.1 Default. Subject to Sections 5.1.2 and 5.1.3, failure by any party to perform any term or provision of this Agreement required to be performed by such party shall constitute an event of default ("Event of Default”). In the event that E&B files for reorganization or other relief under any Federal or State bankruptcy or insolvency law, whether voluntarily or by involuntary bankruptcy or insolvency action, all provisions of this Agreement shall remain in full force and effect unless E&B engages in an Event of Default. For purposes of this Agreement, a party claiming another party is in default shall be referred to as the "Complaining Party", and the party alleged to be in default shall be referred to as the "Party in Default". 5.1.2 Procedure Regarding Defaults. 5.1.2.1 Notice of Default. The Complaining Party shall give written notice of default to the Party in Default, specifying the default complained of by the Complaining Party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. The Party in Default shall diligently endeavor to cure, correct or remedy the matter complained of, provided the such cure, correction or remedy shall be completed within the applicable time period set forth herein after receipt of written notice (or such additional, time as may be deemed by the Complaining Party to be reasonably necessary to correct the matter). Any failures or delays by a Complaining Party in asserting any of its rights and remedies as to 24 Development Agreement between City of Hermosa Beach and E&B Natural Resources any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by a Complaining Party in asserting any of its rights and remedies shall not deprive the Complaining Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. If an Event of Default occurs, prior to exercising any remedies, the Complaining Party shall give the Party in Default written notice of such default. Without limitation, evidence of default may arise in the course of the regularly scheduled annual review or a special review described in Section 4.3. 5.1.2.2 Cure Periods. If the default is reasonably capable of being cured within thirty (30) days, the Party in Default shall have such period to effect a cure prior to exercise of remedies by the Complaining Party. If the nature of the alleged default is such that it cannot practicably be cured within such thirty (30) day period, the cure shall be deemed to have occurred within such thirty (30) day period if (i) the cure is commenced at the earliest practicable date following receipt of the notice; (ii) the cure is diligently prosecuted to completion at all times thereafter; (iii) at the earliest practicable date (in no event later than thirty (30) days after the curing party's receipt of the notice), the curing party provides written notice to the other party that the cure cannot practicably be completed within such thirty (30) day period; and (iv) the cure is completed at the earliest practicable date. In no event shall the Complaining Party be precluded from exercising remedies, subject to the preceding sentence if a default is not cured within sixty (60) days after the first notice of default is given. Subject to the foregoing, if a party fails to cure a default in accordance with the foregoing, the Complaining Party, at its option, may terminate this Agreement pursuant to this Agreement and California Government Code Section 65868, and/or institute legal proceedings pursuant to this Agreement. 5.1.2.3 Procedures Regarding City Termination. Notice of intent to terminate shall be by certified mail, return receipt requested. Upon delivery by the City of notice of intent to terminate, the matter shall be scheduled for consideration and review by the City Council within thirty (30) days in accordance with Government Code Sections 65867 and 65868. Upon consideration of the evidence presented in said review and a determination by the City Council based thereon, the City may give written notice of termination of this Agreement to E&B. Any determination of default (or any determination of failure to demonstrate good faith compliance as a part of annual review) made by the City against E&B, or any person who succeeds to E&B with respect to any portion of the Property, shall be based upon written 25 Development Agreement between City of Hermosa Beach and E&B Natural Resources findings supported by substantial evidence in the record. Any purported termination of this Agreement for alleged default shall be subject to review in the Superior Court of the County of Los Angeles pursuant to Code of Civil Procedure § 1094.5(c). 5.1.3 Institution of Legal Action. Subject to notice of default and opportunity to cure under Section 5.1.2, and subject further to the limitation on remedies set forth in Section 5.1.4, in addition to any other rights or remedies, any party to this Agreement may institute legal action to cure, correct or remedy any default, to enforce any covenants or agreements herein, to enjoin any threatened or attempted violation hereof, or to obtain any other remedies consistent with this Agreement. If a legal action or proceeding is brought by any party to this Agreement because of an Event of Default under this Agreement, or to enforce a provision hereof, the prevailing party shall be entitled to reimbursement of all costs and expenses, including reasonable attorneys’ fees, incurred in prosecuting such legal action or proceeding. This provision is separate and several and shall survive the merger of this Agreement into any judgment on this Agreement. Additionally, in the event of a court finding in an action brought by the City (1) a violation of this development agreement or the conditions of approval in Exhibit D to this Aagreement resulting in a condition detrimental to the public health, safety or welfare and following notice and an opportunity to cure, or (2) a violation of an order issued under Hermosa Beach Oil Code Section 21-A-10.1 (following disposition of an appeal if any filed under Section 21-A-10.2), a court may impose civil penalties up to $10,000/per day for each day in which E&B is determined to be non-compliant. 5.1.4 Remedies. 5.1.4.1 E&B’s Remedies. It is acknowledged by the parties that the City would not have entered into this Agreement if it were liable in damages under or with respect to this Agreement or the application thereof. In addition, the parties agree that monetary damages are not an adequate remedy for E&B if the City should be determined to be in default under this Agreement. The parties further agree that specific performance shall be E&B’s only remedy under this Agreement and E&B may not seek monetary damages in the event of a default by City under this Agreement. E&B covenants not to sue for or obtain monetary damages for the breach by City of any provision of this Agreement. 5.1.4.2 City's Remedies. The parties agree that the City shall have limited 26 Development Agreement between City of Hermosa Beach and E&B Natural Resources remedies for monetary damages and specific performance as specifically provided for in this Section 5.1.4.2. The City shall not have any right to compel specific performance with respect to the construction of the Project, or any obligation to construct the Project, including without limitation Section 3.7. Further, the City shall have no right to monetary damages as a result of E&B's failure to construct the Project or its failure to comply with Section 3.7. The City shall have the right to sue for monetary damages for failure by the E&B to pay any amounts owing under this Agreement including without limitation any amounts owing pursuant to Section 6.5.1. In no event shall the City be entitled to consequential damages or punitive damages for any breach of this Agreement. City also shall have the right to seek monetary damages for reimbursement of the actual cost to the City incurred by the City to construct, complete, demolish, remove or restore any physical infrastructure improvement in the public right of way which E&B commences construction of but fails to complete. If E&B’s failure or refusal to perform any provision of this Agreement causes an immediate and serious threat to life, health, property or natural resources, the City may pursue all remedies including but not limited to remedies available under the Hermosa Beach Oil Code Chapter 21-A (including the provisions of Article X, which allow for immediate cessation of operations) and Section 21 of the Lease. 5.1.4.3 Other Actions. Nothing in this Agreement shall be deemed to waive or limit any rights and remedies that the parties would otherwise have against the other relating to matters not covered by this Agreement. 5.2 Termination of Agreement. 5.2.1 As to the Property and all of the rights of E&B hereunder, and except as otherwise provided in this Agreement, this Agreement shall be deemed terminated and of no further effect upon the expiration of the Term of this Agreement unless earlier terminated pursuant to this Agreement. Subject to the notice and cure provisions set forth in Section 5.1.2, the City shall have the right to terminate this Agreement as to the Property and the rights of E&B hereunder, in the event E&B defaults and fails to cure such default within the respective cure period. Subject to the notice and cure provisions set forth in Section 5.1.2, E&B shall have the right to terminate this Agreement and the rights of the City hereunder in the event the City defaults and fails to cure such default within the respective cure period. Upon the termination of this Agreement, neither party shall have any further right or obligation with respect to the Property hereunder except with respect to any obligation to have been performed prior to such 27 Development Agreement between City of Hermosa Beach and E&B Natural Resources termination or with respect to any default in the performance of the provisions of this Agreement which has occurred prior to such termination (other than commencement of construction of either phase) or with respect to any obligations which are specifically set forth as surviving this Agreement. Termination of this Agreement pursuant to this Section 5.2 shall cause the rights and benefits afforded by this Agreement to no longer be vested (subject to planning and zoning law) and as a result, the City shall no longer be limited from taking any action which may adversely affect the Property or the Project. 5.2.2 Termination by E&B Prior to Development. E&B is free, in its sole and subjective business judgment, not to proceed with development of the Project and, in such an event, to terminate this Agreement. The City acknowledges that such a right is consistent with the intent, purpose and understanding of the parties to this Agreement. In the event E&B decides not to proceed with development of the Project and to terminate this Agreement, E&B shall provide written notice to the City of that decision and of the final, irrevocable termination of this Agreement. Immediately upon the giving of such written notice to the City, the parties’ rights and obligations under this Agreement shall cease, except with respect to any obligations which are specifically set forth as surviving this Agreement. In the event of such written notice to the City terminating this Agreement, all Project Approvals (but not the Lease, Settlement Agreement and those included in the City’s General Plan and/or the Municipal Code), shall terminate and be extinguished. Termination by E&B shall not affect any of E&B’s obligations to pay assessments, liens or taxes incurred prior to the effective date of termination. 6 GENERAL PROVISIONS 6.1 Term. 6.1.1 Term. The Term of this Agreement shall commence upon the Commencement Date and shall be coterminous with the term of the Lease, unless terminated, modified or extended pursuant to the provisions of this Agreement or by the voters of the City. The Term of this Agreement shall be tolled during any period of time in which a Force Majeure Delay exists. 6.1.2 Additional Rights. Expiration or termination of this Agreement shall not affect any right vested under law independent of this Agreement. 28 Development Agreement between City of Hermosa Beach and E&B Natural Resources 6.2 Approval, Execution and Recordation Procedure. The following procedure shall govern approval of this Agreement: (a) The voters shall have approved Ballot Measure __ approving this Agreement; (b) Following voter approval, the Hermosa Beach City Council shall declare the vote in accordance with Elections Code Section 9217 and execute the Development Agreement; (c) As provided in Section 65868.5 of the Development Agreement Act, following execution by the City, the City shall cause a copy of this Agreement to be recorded with the County Recorder within ten (10) days. Any recording costs shall be paid by E&B; and (d) Following execution and recordation, the Coastal Commission shall have approved this Agreement (which shall include any revisions to this Agreement authorized by Section 10.F of the Ballot Measure Ordinance); 6.3 Cooperation and Implementation. City represents that it will cooperate with E&B to the extent reasonable and feasible to implement this Agreement. Upon satisfactory completion by E&B of all of its preliminary actions and payments of appropriate fees, City shall promptly commence and proceed with reasonable diligence to complete all steps necessary for the implementation of this Agreement and the development of the Property in accordance with the terms of this Agreement, including, but not limited to, the processing and checking of any and all Project Approvals, agreements, covenants and related matters required under the conditions of this Agreement, building plans and specifications, and any other plans necessary for the development of the Property, requests for inspections and certificates of occupancy, filed by or on behalf of E&B. E&B shall, in a timely manner, provide City with all documents, plans and other information necessary for the City to carry out its obligations hereunder, and pay for all necessary fees, costs, and expenses incurred by the City to facilitate implementation of this agreement that are not identified as the City’s responsibility. 6.4 Legal Challenges. 29 Development Agreement between City of Hermosa Beach and E&B Natural Resources 6.4.1 Defense. If any legal action or other proceeding is instituted by a third party or parties, other governmental entity or official challenging the validity of any provision of the Project Approvals, of the EIR or of this Development Agreement, E&B and the City shall cooperate in defending any such action. The City shall notify E&B of any such legal action against City within ten (10) days after the City receives service of process, except for any petition for a Temporary Restraining Order, in which case the City shall notify E&B immediately upon receipt of notice thereof. 6.4.2 Continued Processing. The filing of any lawsuit(s) by a third party (not a party to this Agreement) after the Approval Date against the City and/or E&B relating to this Agreement or to other development issues affecting the Project shall not delay or stop the processing or issuance of any permit or authorization necessary for development of the Project, unless required by court order. 6.5 Indemnity. 6.5.1 E&B Indemnity. To the fullest extent permitted by law, and notwithstanding the indemnification provisions set forth in the Lease and notwithstanding the limits of the insurance policies required herein, E&B hereby agrees, at its sole cost and expense, to defend, protect, indemnify, and hold harmless the City and its elected officials, officers, attorneys, agents, employees, consultants, volunteers, successors, and assigns (collectively "Indemnitees") from and against any and all third party damages, costs, expenses, liabilities, claims, demands, causes of action, proceedings, expenses, judgments, penalties, liens, and losses of any nature whatsoever, including reasonable fees of accountants, attorneys, engineers, consultants or other professionals and all costs associated therewith, arising or claimed to arise, directly or indirectly, out of, in connection with, resulting from, or related to any act, failure to act, error, or omission of E&B or any of its officers, agents, servants, lessees, employees, contractors, subcontractors, materialmen, suppliers or their officers, agents, servants, lessees, or employees, or arising or claimed to arise, directly or indirectly, out of, in connection with, resulting from, or related to this Agreement or Project Approvals, or any approval subsequently granted by the City for the development of the Property, any construction permitted pursuant to this Agreement or Project Approvals, or any subsequent use of the Property, or any portion thereof, permitted by this Agreement or Project Approvals except for any actions resulting from the gross negligence or intentional acts of an Indemnitee. The City may elect to participate in the 30 Development Agreement between City of Hermosa Beach and E&B Natural Resources litigation, in which case E&B agrees to reimburse the City for its litigation costs and fees, including the retention of outside counsel to be selected by the City at the City’s sole discretion. Neither party shall settle any such lawsuit without the consent of the other party. 6.5.2 Survival of Indemnity. The indemnity provisions contained in Sections 6.4 and 6.5 shall survive the termination of the Agreement and are in addition to any other rights or remedies which Indemnitees may have under the law. Payment is not required as a condition precedent to an Indemnitee's right to recover under these indemnity provisions, and an entry of judgment against an Indemnitee shall be conclusive in favor of the Indemnitee's right to recover under these indemnity provisions. E&B shall pay Indemnitees for any reasonable attorneys’ fees and costs incurred in enforcing these indemnification provisions. 6.6 Notices. All notices or other communications required hereunder shall be in writing and shall be personally delivered (including by means of professional messenger service), or sent by registered or certified mail, postage prepaid, return receipt required, or by electronic mail (provided the email transmission is followed by delivery of a "hard" copy), and shall be deemed received on the date of receipt personally, by registered or certified mail or by facsimile. Unless otherwise indicated in writing, such notice shall be sent addressed as follows: If to the City: City Manager City of Hermosa Beach 1315 Valley Drive Hermosa Beach, CA 90254 With a copy to: Michael Jenkins, Esq. Jenkins & Hogin 1230 Rosecrans Avenue, Suite 110 31 Development Agreement between City of Hermosa Beach and E&B Natural Resources Manhattan Beach, CA 90266 Telephone: (310) 643-8448 Fax: (310) 643-8441 If to E&B: E & B Natural Resources Management Corporation 1600 Norris Road Bakersfield, CA 93308 Telephone: (661) 679-1797 Fax: With a copy to: [name] Telephone: Fax: 6.7 No Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the parties to this Agreement and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. 6.8 Time of Essence. Time is of the essence for each provision of this Agreement of which time is an element. 6.9 Modification, Amendment or Extension. Subject to any notice and hearing requirements imposed by law, this Agreement may be modified, amended and/or extended from time to time by mutual written consent of the City Council and E&B as set forth in Government Code Sections 65867, 65867.5 and 65868 and as authorized by Section 110.G of the Ballot 32 Development Agreement between City of Hermosa Beach and E&B Natural Resources Measure Ordinance and Chapter 19.66 of the Municipal Code. 6.10 Conflicts of Law. In the event that state, regional or federal laws or regulations enacted after the Approval Date or the action or inaction of any other affected governmental jurisdiction prevent or preclude compliance with one or more provisions of this Agreement or require changes in plans, maps or permits approved by the City, the parties shall (a) provide the other party with written notice of such state, regional or federal restriction, provide a copy of such regulation or policy and a statement of conflict with the provisions of this Agreement, and (b) E&B and the City staff shall, within thirty (30) days, meet and confer in good faith in a reasonable attempt to modify this Agreement, but only to the minimum extent necessary to comply with such federal, regional or state law or regulation. Thereafter, regardless of whether the parties reach an agreement on the effect of such federal, regional or state law or regulation upon this Agreement, the matter shall be scheduled for hearings before the Council. Ten (10) days’ written notice of such hearing shall be given, pursuant to Government Code Sections 65090 and 65867. The Council, at such hearing, shall determine the exact modification or suspension which shall be necessitated by such federal, regional or state law or regulation. E&B, at the hearing, shall have the right to offer oral and written testimony. Any modification or suspension shall be taken by the affirmative vote of not less than a majority of the authorized voting members of the Council. Any suspension or modification may be subject to judicial review. The City shall cooperate with E&B in the securing of any permits which may be required as a result of such modifications or suspensions, subject to the payment of costs by E&B as set forth in Condition A-3 of Exhibit D-2 (and any other reimbursement authorized under this agreement), and the indemnity provisions in Section 6.5 of this agreement. If E&B and the City do not agree on the modification or suspension, either party may elect to terminate this Agreement pursuant to the provisions of Section 5.2 of this Agreement. 6.11 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought and referring expressly to this Section. No waiver of any right or remedy in respect of any occurrence or event shall be deemed a waiver of any right or remedy in respect of any other occurrence or event 6.12 Successors and Assigns. Except as expressly provided to the contrary in this Agreement, 33 Development Agreement between City of Hermosa Beach and E&B Natural Resources the burdens and obligations of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, all successors in interest to the parties to this Agreement and all successors in interest to the Property or any portion thereof or any interest therein, and shall be covenants running with the land. 6.13 Governing State Law. This Agreement shall be construed in accordance with the laws of the State of California. 6.14 Constructive Notice and Acceptance. Every person who now or hereafter owns or acquires any right, title or interest in or to any portion of the Property is and shall be conclusively deemed to have consented and agreed to every provision contained herein, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Property. 6.15 Statement of Compliance. Within thirty (30) days following any written request, in accordance with the notice provisions of this Agreement, which either party may make from time to time, and upon payment of a fee to the City to reimburse the City for its reasonable expenses associated herewith, the other party shall execute and deliver to the requesting party a statement certifying that: (a) this Agreement is unmodified and in full force and effect or, if there have been modifications hereto, that this Agreement is in full force and effect, as modified, and stating the date and nature of such modifications; (b) that this Agreement is in full force and there are no current uncured defaults under this Agreement or specifying the dates and nature of any such defaults, and manner of cure; (c) any other information reasonably requested. The failure to deliver such statement within such time shall be conclusive upon the party which fails to deliver such statement that this Agreement is in full force and effect without modification except as may be represented by the requesting party and that there are no uncured defaults in the performance of the requesting party. Said statement(s) shall be in the form reasonably satisfactory to the City, E&B and to any purchaser, lender, title company, governmental agency, or other person reasonably requesting such statement(s) in connection with sale, use, development, construction, financing or marketing of the Property. The City and E&B, for their own respective uses, shall also be entitled to obtain a statement of compliance at any reasonable time. 34 Development Agreement between City of Hermosa Beach and E&B Natural Resources 6.16 Insurance. 6.16.1 E&B shall obtain and continuously maintain throughout the term of this Agreement, insurance required by this Section 6.16, which shall also serve to satisfy the insurance requirements of section 18(b) and Exhibit C to the Lease. All insurance required to be carried by E&B shall be with companies rated A:X or better, in the then most recent edition of Best's Insurance Guide, and licensed to provide the relevant insurance in the State of California. E&B’s indemnification and defense obligations under this Agreement are not limited to the type or amount of insurance coverage that E&B is required to provide hereunder. Certificates of Insurance required to be delivered by this Section 6.16 shall contain liability limits not less than those set forth in this Section 6.16. Commercial general liability and control of well insurance policies shall include the City and the California State Lands Commission and their elected and appointed officials, employees, agents, consultants and representatives as additional insureds. All endorsements or policy provisions adding insureds to required insurance policies shall contain no added limitations, conditions, restrictions or exceptions to coverage in addition to those that apply under the insurance policy generally. E&B shall deliver the required Certificates of Insurance and endorsements evidencing the insurance required by this Section 6.16 prior to the Commencement Date. Evidence for renewals of required policies shall be submitted to City not later than ten (10) business days prior to the expiration date of each insurance policy, or at such later date as E&B may request for City’s approval, but in no event later than one business day prior to the expiration date of such Insurance Policy. The general liability policy shall be endorsed to state that coverage cannot be canceled, voided, suspended, adversely modified, or reduced in coverage or in limits (including for non- payment of premium) except after thirty (30) days’ prior notice (or ten (10) days in the case of cancellation for non-payment of premium) has been given to City; provided that E&B may obtain as comparable an endorsement as possible, so long as such endorsement does not include any limitation of liability of the insurer for failure to provide such notice. E&B shall give the City an unqualified thirty (30) day notice of cancellation, non-renewal or material amendment thereof. 35 Development Agreement between City of Hermosa Beach and E&B Natural Resources In the event that an insurer providing any of the insurance policies becomes the subject of bankruptcy proceedings, becomes insolvent, or is the subject of an order or directive limiting its business activities given by any regulatory authority, including the State Department of Insurance, E&B shall exercise best efforts to promptly, and at its sole cost and expense, secure alternative coverage in compliance with the insurance requirements contained in this Section 6.16 so as to avoid any lapse in insurance coverage. Each insurance policy required herein shall provide that the coverage is primary and noncontributory coverage with respect to all insureds, except for coverage that by its nature cannot be written as primary. Any insurance or self-insurance beyond that specified in this Agreement that is maintained by the City or the California State Lands Commission shall be excess of such insurance and shall not contribute with it. Each insurance policy shall be written or endorsed so that (i) no acts or omissions of an insured shall impair or otherwise affect coverage of the other insureds and (ii) insurance shall apply separately to each insured against whom a claim is made or suit is brought, except with respect to the limits of the insurer’s liability. All insurance coverage maintained or procured pursuant to this Agreement shall be endorsed to delete the subrogation condition as to City, or shall specifically allow E&B or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. E&B waives all rights of recovery against City, California State Lands Commission, and their elected and appointed officials, employees, agents, consultants and representatives. E&B acknowledges and agrees that any actual or alleged failure on the part of City to inform E&B of non-compliance with any requirement imposes no additional obligations on City nor does it waive any rights hereunder. In the event any insurance (including the limits that are required to be obtained and maintained by E&B pursuant to this Section 6.16 and/or naming the City as an additional insured), other than insurance required to be obtained and maintained by applicable law, shall not 36 Development Agreement between City of Hermosa Beach and E&B Natural Resources be available and commercially feasible to obtain and maintain in the commercial insurance market, E&B shall provide written notice of that occurrence to the City. Said written notice shall be accompanied by a written report prepared by an independent insurance advisor of recognized national standing and reasonably acceptable to City, certifying that such insurance is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, or in the case where any required insurance amount is not so available, certifying as to the maximum amount that is so available, and in each case explaining in detail the basis for such conclusions. Should commercial unavailability or commercial infeasibility occur, E&B shall have the right to self-insure a portion of the risk in order to obtain additional policy limits and/or coverage (i.e., “excess” insurance), as long as the financial capability of E&B to retain a portion of the risk is sufficient to obtain limits of coverage that would be equivalent to that required by this Section 6.16. Should E&B be unable to satisfy this requirement for financial capability in order to self- insure a portion of the risk, E&B and the City shall negotiate in good faith and attempt to agree upon alternative adequate means of financial assurance to substitute for the insurance or the portion of the insurance that is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, taking into consideration the type and amount of insurance which has become unavailable and the potential magnitude of any loss not covered by insurance. Other than as provided in the preceding paragraph, no self-insured retentions are permitted with respect to any risk or occurrence required by this Agreement to be covered by insurance without the prior, written consent of City, exercised in its sole discretion. Subject to City’s written approval, E&B may self-insure a portion of the risk and/or provide other alternative adequate means of financial assurance to the City only for so long as and to the extent that any insurance required by this Section 6.16 is not then reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. Said differently, E&B will again be required to obtain and maintain all of the insurance required by this Section 6.16 once the same is reasonably available and commercially feasible to obtain and maintain in the 37 Development Agreement between City of Hermosa Beach and E&B Natural Resources commercial insurance market. E&B agrees to test the commercial insurance market through its insurance broker to confirm unavailability or commercial infeasibility of a required coverage no less often than quarterly during any period of commercial unavailability or commercial unfeasibility for any particular coverage. 6.16.2 Required Insurance. Subject to the provisions of Section 6.16.1, E&B shall procure, pay for and keep in full force and effect during the term of this Agreement each and all of the following insurance policies. 6.1.2.1 Commercial General Liability Insurance. Commercial General Liability, including: Bodily Injury; Property Damage; Personal Injury; Blanket Contractual Liability, or equivalent; Broad Form Property Damage; Premises and Operations; Fire Legal Liability; Sudden and Accidental Pollution Liability; Products and Completed Operations; Explosion, Collapse and Underground Hazard; and Advertising/Personal Injury Coverage, and pollution occurring from the same in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) in the aggregate. E&B shall provide the City with a copy of E&B's commercial general liability policy prior to the commencement of this Lease. 6.16.2.2 (Loss Of) Control Of Well And Pollution Liability Coverage. (Loss Of) Control of Well insurance and Operators Extra Expense Coverage with total of Forty Million Dollars ($40,000,000.00) limited liability for Sections 1A (Well Out Of Control Insurance), IB (Redrill/Extra Expense), and 1C (Seepage, Pollution, Cleanup and Contamination) and a total of Five Million Dollars ($5,000,000.00) limited liability for Section 2 (Care, Custody and Control) and coverage for bodily injury, property damage, including cleanup costs and defense costs resulting from a Well Out Of Control incident. Notwithstanding the foregoing, E&B shall be obligated to maintain the specified Control of Well coverages only during actual drilling of a well, which includes drilling, completing and/or testing of the well. E&B shall provide the City with a copy of E&B's Control of Well policy prior to commencing any actual drilling, along with the Certificate of Insurance, and such policy shall be maintained throughout the entire course of each actual drilling operation. 38 Development Agreement between City of Hermosa Beach and E&B Natural Resources 6.16.2.3 Worker's Compensation Insurance. Worker's Compensation insurance as required by law, together with Employer's Liability coverage with limits of not less than One Million Dollars ($1,000,000.00). Such coverage shall include a Waiver of Subrogation in favor of the City and an "alternate employer" endorsement. 6.16.2.4 Auto liability insurance (Symbol 1 – Any Auto) with limits of not less than One Million Dollars ($1,000,000.00) combined single limit. 6.16.2.5 Following Form Excess Or Umbrella Liability Insurance. Following Form Excess or Umbrella Liability insurance in an amount of not less than Twenty- Five Million Dollars ($25,000,000.00) per occurrence and aggregate per policy period to apply as excess coverage over coverage required by Subsections 6.16.2.1, 6.16.2.3 and 6.16.2.4. 6.16.2.6 Additional Insurance Required To Comply With Law. If the amounts of minimum insurance coverage as specified above in this Section 6.16.2 are insufficient or become insufficient to meet in any respect the minimum insurance coverage requirements set forth in or required by any applicable legal requirements of any governmental entity or regulatory body or agency by statute, case law, rules and/or regulations, then in such event E&B shall procure and maintain sufficient amounts of insurance coverage to satisfy any such minimum insurance coverage requirements in addition to the insurance required by Subsections 6.16.2.1, 6.16.2.2, 6.16.2.3, 6.16.2.4 and 6.16.2.5. 6.16.2.7 Review of Insurance Amounts During Term of Development Agreement. At each five-year anniversary of this Agreement, the parties will secure the advice of an independent insurance advisor of national standing to opine whether the insurance limits and requirements set forth in this Section 6.16 remain sufficient. The independent insurance advisor will consider the intervening changes in the consumer price index, industry standards, improvements in technology affecting the Project’s operations and any other relevant considerations. The parties will mutually agree to any modifications to the insurance requirements and limits as recommended by the advisor and as are prudent and commercially reasonable under the circumstances. Should the parties be unable to agree, they will mediate the matter before a 39 Development Agreement between City of Hermosa Beach and E&B Natural Resources neutral third party, each party to bear one-half the cost of the mediator. 6.16.3 Drilling or Other Contractors. Exhibit C to the Lease states: "Each drilling or other contractor performing work for the joint account shall be required to maintain in force, with respect to the work performed by such contractor, to the extent applicable and possible, the same insurance as specified above." E&B also agrees to require each contractor to include the City as an additional insured to any such insurance maintained by the contractor. 6.16.4 Requirements Not Limiting. The Parties acknowledge and agree that (i) requirements of specific coverage features or limits contained in this Section 6 are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance policy (ii) specific reference to a given coverage feature is not intended by to be all inclusive, or to the exclusion of other coverage, or a waiver of any type and (iii) all insurance coverage and limits provided by E&B, or by third parties pursuant to obligations of E&B hereunder, and, in each case, available or applicable to this Agreement are intended to apply to the full extent of the insurance policies, and nothing contained in this Agreement limits, or shall be deemed to limit, the application of such insurance coverage. 6.16.5 Remedies. Failure on the part of E&B to maintain the insurance as required hereunder shall constitute a material breach of this Agreement and the Lease, upon which the City may, after providing notice and an opportunity to cure as provided in Section 5.1.2 of this Agreement, if not timely cured by E&B, immediately terminate this Agreement and the Lease or suspend this Agreement and the Lease until E&B remedies the failure to maintain insurance. 6.16.1 E&B shall obtain and maintain insurance required by this Section 6.16, which shall also serve to satisfy the insurance requirements of section 18(b) and Exhibit C to the Lease. All insurance required to be carried by E&B shall be with companies rated A:X or better, in the then most recent edition of Best’s Insurance Guide, and licensed to provide the relevant insurance in the State of California. Certificates of Insurance required to be delivered by this Section 6.16 shall contain liability limits not less than those set forth in this Section 6.16, and shall list the City and the California State Lands Commission as an additional insured. E&B shall give the City an unqualified thirty (30) day notice of cancellation, non-renewal or material amendment thereof. E&B shall deliver the required Certificates of Insurance evidencing the insurance required by this Section 6.16 promptly upon obtaining the same. 40 Development Agreement between City of Hermosa Beach and E&B Natural Resources In the event any insurance (including the limits that are required to be obtained and maintained by E&B pursuant to this Section 6.16 and/or naming the City as an additional insured), other than insurance required to be obtained and maintained by applicable law, shall not be available and commercially feasible to obtain and maintain in the commercial insurance market, E&B shall provide written notice of that occurrence to the City. Said written notice shall be accompanied by a written report prepared by an independent insurance advisor of recognized national standing and reasonably acceptable to City, certifying that such insurance is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, or in the case where any required insurance amount is not so available, certifying as to the maximum amount that is so available, and in each case explaining in detail the basis for such conclusions. [UNDER DISCUSSION] Should this occur, E&B shall have the right to self-insure in order to obtain additional policy limits and/or coverage as long as the financial capability of E&B is sufficient to obtain self-insurance coverage that would be equivalent that required by this Section 6.16. Should E&B be unable to satisfy this requirement for financial capability in order to self-insure, E&B and the City shall negotiate in good faith and attempt to agree upon alternative adequate means of financial assurance to substitute for the insurance or the portion of the insurance that is not reasonably available and commercially feasible to obtain and maintain in the commercial insurance market, taking into consideration the type and amount of insurance which has become unavailable, the potential magnitude of any loss not covered by insurance. E&B may self-insure and/or provide other alternative adequate means of financial assurance to the City only for so long as and to the extent that any insurance required by this Section 6.16 is not then reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. Said differently, E&B will again be required to obtain and maintain all of the insurance required by this Section 6.16 once the same is reasonably available and commercially feasible to obtain and maintain in the commercial insurance market. 6.16.2 Required Insurance. LESSEE shall procure, pay for and keep in full force and effect during the term of this Agreement each and all of the following insurance. 6.16.2.1 Commercial General Liability Insurance. Commercial General Liability, including: Bodily Injury; Property Damage; Personal Injury; Blanket Contractual Liability, or equivalent; Broad Form Property Damage; Premises and Operations; Fire Legal Liability; Sudden and Accidental Pollution Liability; Products and Completed Operations; Explosion, Collapse and Underground Hazard; and Advertising/Personal Injury Coverage, and pollution occurring from the same in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) in the aggregate. 6.16.2.2 (Loss Of) Control Of Well And Pollution Liability Coverage. (Loss Of) Control of Well insurance and Operators Extra Expense Coverage with total of Forty Million Dollars ($40,000,000.00) limited liability for Sections 1A (Well Out Of Control Insurance), 1B (Redrill/Extra Expense), and 1C (Seepage, Pollution, Cleanup and Contamination) and a total of Five Million Dollars ($5,000,000.00) limited liability for Section 2 (Care, Custody and Control) and coverage for bodily injury, property damage, including cleanup costs and defense costs resulting from a Well Out Of Control incident. Notwithstanding the foregoing, E&B shall be Formatted: List Paragraph, Tab stops: 1.5",Left + 2", Left Formatted: Not Highlight Formatted: Indent: First line: 0", Tab stops: 1.5", Left + Not at 2.63" 41 Development Agreement between City of Hermosa Beach and E&B Natural Resources obligated to maintain the specified Control of Well coverages only during actual drilling of a well, which includes drilling, completing and/or testing of the well. E&B shall provide the City with a copy of E&B’s Control of Well policy prior to commencing any actual drilling, along with the Certificate of Insurance, and such policy shall be maintained throughout the entire course of each actual drilling operation. 6.16.2.3 Worker’s Compensation Insurance. Worker’s Compensation insurance as required by law, together with Employer’s Liability coverage with limits of not less than One Million Dollars ($1,000,000.00). Such coverage shall include a Waiver of Subrogation in favor of the City and an “alternate employer” endorsement. 6.16.2.4 Owned, Non-Owned Or Hired Auto Insurance. Owned, Non-Owned or Hired Auto insurance with limits of not less than One Million Dollars ($1,000,000.00) per occurrence or accident. 6.16.2.5 Following Form Excess Or Umbrella Liability Insurance. Following Form Excess or Umbrella Liability insurance in an amount of not less than Twenty-Five Million Dollars ($25,000,000.00) per occurrence and aggregate per policy period to apply as excess coverage over coverage required by Subsections 6.16.2.1, 6.16.2.3 and 6.16.2.4. 6.16.2.6 Additional Insurance Required To Comply With Law. If the amounts of minimum insurance coverage as specified above in this Section 6.16.2 are insufficient or become insufficient to meet in any respect the minimum insurance coverage requirements set forth in or required by any applicable legal requirements of any governmental entity or regulatory body or agency by statute, case law, rules and/or regulations, then in such event E&B shall procure and maintain sufficient amounts of insurance coverage to satisfy any such minimum insurance coverage requirements in addition to the insurance required by Subsections 6.16.2.1, 6.16.2.2, 6.16.2.3, 6.16.2.4 and 6.16.2.5. 6.16.2.7 [Review of Insurance Amounts During Term of Development Agreement] [UNDER DISCUSSION] 6.16.3 Drilling or Other Contractors. Exhibit C to the Lease states: “Each drilling or other contractor performing work for the joint account shall be required to maintain in force, with respect to the work performed by such contractor, to the extent applicable and possible, the same insurance as specified above.” E&B also agrees to require each contractor to include the City as an additional insured to any such insurance maintained by the contractor. 6.17 Mortgagee Protection. The parties hereto agree that this Agreement shall not prevent or limit the right of E&B at its sole discretion, to encumber its leasehold interest in the Property or any portion thereof or any improvement thereon by any mortgage or other security device (collectively "Mortgage") securing financing of the purchase, development or operation of the Formatted: Not Highlight Formatted: List Paragraph, Tab stops: 1.5",Left + Not at 2.63" Formatted: List Paragraph, Space After: 12pt, Tab stops: 1.5", Left + 2", Left 42 Development Agreement between City of Hermosa Beach and E&B Natural Resources Property or any portion thereof (including, without limitation, any combination of purchase financing, construction financing, bridge loans, take-out and permanent financing), as provided in this Agreement; provided, however, that any such Mortgage shall be subordinate to the rights and obligations under this Agreement. The City acknowledges that prospective lenders providing such financing may request certain acknowledgements, estoppels, interpretations and/or modifications of this Agreement, and agrees upon request, from time to time, and upon payment of a fee to the City to reimburse the City for its reasonable expenses associated herewith, to meet with E&B and representatives of such lenders to discuss in good faith any such request for acknowledgements, estoppels, interpretations and/or modifications. The City shall not unreasonably withhold its consent to and/or execution of any such requested acknowledgements, estoppels, interpretations and/or modifications which the City determines is consistent with the intent and purposes of this Agreement and reasonably protects the interests of the City under this Agreement. If the City timely receives a request from a Mortgagee requesting a copy of any notice of default given to E&B under the terms of this Agreement, the City shall provide a copy of that notice to the Mortgagee within ten (10) days of sending the notice of default to E&B, as the case may be. The Mortgagee shall have the right, but not the obligation, to cure the default during the remaining cure period allowed such party under this Agreement. Any Mortgagee who comes into possession of E&B’s interests in the Property, or any part thereof, pursuant to foreclosure of the mortgage, shall take the Property, or part thereof, subject to the terms of this Agreement; in no event shall any such Mortgagee or its successors or assigns be entitled to a building permit or occupancy certificate until all fees and other obligations due by E&B under this Agreement have been performed and/or paid to the City, all defaults have been cured, and all otherwise applicable conditions to such permit or certificate have been satisfied. 6.18 Covenant of Good Faith and Fair Dealing. No party shall do anything which shall have the effect of harming or injuring the right of the other parties to receive the benefits of this Agreement. 6.19 Covenant of Cooperation. E&B and the City shall cooperate with and assist each other in the performance of the provisions of this Agreement, including assistance in obtaining permits 43 Development Agreement between City of Hermosa Beach and E&B Natural Resources for the development of the Property or the Project which may be required from public agencies other than the City, subject to the payment of costs by E&B as set forth in Condition A-3 of Exhibit D-2 (and any other reimbursement authorized under this Agreement), and the indemnity provisions in Section 6.5 of this Agreement. E&B reserves the right to challenge any ordinance, measure, moratorium or other limitation in a court of law if it becomes necessary to protect the development rights vested in the Property pursuant to this Agreement. 6.20 Justifiable Reliance. The City acknowledges that, in investing money and planning effort in and to the Project and all public improvements and dedication offers required hereunder, and in undertaking commencement of the Project, E&B will be doing so in reliance upon the City's covenants contained in this Agreement and upon the enforceability of this Agreement, and the City agrees that it will be reasonable and justifiable for E&B to so rely. 6.21 Project Is Private Undertaking. It is specifically understood and agreed to by and between the parties hereto that: (1) the subject development is a private development; (2) except for the obligations of the City described herein, if any, the City has no responsibilities for or duty to third parties concerning any public improvement until such time and only until such time that the City accepts the same pursuant to the provisions of this Agreement; (3) E&B shall have full power over and exclusive control of the development of the Project herein described subject only to the limitations and obligations of E&B under this Agreement and the Project Approvals; and (4) the contractual relationship between the City and E&B is such that E&B is not an agent of the City nor is City an agent of E&B. Notwithstanding the foregoing, nothing contained in this Agreement shall be deemed to waive or modify any otherwise applicable obligations the City, acting in its governmental capacity and not as a party to this Agreement, may have to E&B or any other party, under and in accordance with all applicable laws. 6.22 Further Actions and Instruments. The parties to this Agreement shall cooperate with and provide reasonable assistance to the other parties to the extent contemplated in the performance of all obligations under this Agreement and the satisfaction of the conditions of this Agreement. Upon the request of any party, the other parties shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out 44 Development Agreement between City of Hermosa Beach and E&B Natural Resources the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement. 6.23 Section Headings. All Article and Section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement. 6.24 Enforced Delay (Force Majeure). (a) In addition to specific provisions of this Agreement, performance by any party hereunder, including making payments, shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes, walkouts, riots, floods, earthquakes, fires, casualties, acts of God, litigation not commenced by a Party to this Agreement claiming the enforced delay (including without limitation, third party legal challenges to the Project, the Project Approvals or the environmental clearance for the Project Approvals and the Project), unavailability of materials, unforeseeable events beyond the control of E&B, governmental restrictions including moratoria imposed or mandated by other governmental entities (as City is prohibited from imposing moratoria under Section 3.1.2) (but only as to delays or defaults on the part of E&B), enactment of conflicting state or federal laws or regulations (but only if the party claiming delay complies at all times with the provisions of this Agreement pertaining to such conflicting laws), delays caused by the delay or failure by any entity other than the party claiming such delay to provide financing for or construction of needed public facilities or infrastructure as contemplated or required by this Agreement, delays due to the enforcement of environmental regulations, litigation brought by third parties, or similar bases for excused performance. Any period of enforced delay provided for in this Section shall run concurrently with any period of enforced delay under the Lease. E&B shall only be required to provide one notice claiming such extension for enforced delay under both this Agreement and the Lease. (b) An extension of time for any such cause including an extension of the Term (a "Force Majeure Delay") shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other parties within thirty (30) days of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Delay unless and until the party claiming such 45 Development Agreement between City of Hermosa Beach and E&B Natural Resources delay and interference delivers to the other party written notice describing the event, its cause, when and how such party obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within thirty (30) days after it obtains actual knowledge of the event. The time for performance due to a Force Majeure Delay will be extended for such period of time as the cause of such delay exists (whether or not it extends beyond the Term or the Extended Term) but in no event for longer than for such period of time. (c) Notwithstanding the first sentence of paragraph (b), above, the following shall apply: (i) E&B shall be entitled to a Force Majeure Delay for a period longer than the period of enforced delay if the City Council determines that such longer period is reasonably required; and (ii) E&B shall be entitled to a Force Majeure Delay notwithstanding the fact that E&B may not have given timely notice to the City, if the City Council determines that such Force Majeure Delay is reasonably required. (d) A Force Majeure Delay shall not include the existence of any adverse or difficult market or economic conditions. 6.25 Emergency Circumstances. (a) If, as the result of specific facts, events or circumstances, the City believes that a severe and immediate emergency threat to the health or safety of the City or its residents, meeting the requirements of subparagraph (b), below, requires the modification, suspension or termination of this Agreement, the City will, after reasonable notice to E&B (in light of all the circumstances), hold a hearing on such facts, events or circumstances, at which E&B shall have the right to address the City Council. The City shall have the right to modify, suspend or terminate this Agreement, in whole or in part, if, following such hearing, the City Council determines that such modification, suspension or termination is required in order to protect the health and safety of the City and its residents. (b) This Section 6.25 governs generally applicable emergencies in the area not specifically related to or caused by the Project. For purposes of this Section 6.25, an emergency must meet each of the following criteria: (i) it must be based on genuine health, safety and general welfare concerns (other than general growth management 46 Development Agreement between City of Hermosa Beach and E&B Natural Resources issues); (ii) it must arise out of a documented emergency situation, as declared by the President of the United States, Governor of California, or the Mayor or City Council of the City of Hermosa Beach; and (iii) based upon its terms or its effect as applied, it does not apply exclusively or primarily to the Property or the Project. To the extent possible, any such action by the City shall be taken in a manner so as to provide E&B with the rights and assurances provided under this Agreement. 6.26 Reporting Adverse Information. Within 15 days of receipt, E&B shall notify the City Manager and City Attorney of any lawsuits, formal claims, notices of violation or notifications of administrative or governmental agency investigations concerning alleged or actual violations of any law or permit condition arising from or relating to E&B’s oil and gas drilling or production operations within the state of California. Together with the notification required by this Paragraph 6.26, E&B shall provide City with two (2) copies (one to City Manager, one to City Attorney) of all such the documents initiating such lawsuit, claim, notice of violation or notification of administrative or governmental agency investigation, if such documents are in E&B’s possession, custody or control; otherwise, copies of such documents shall be submitted to City within three (3) days of receipt by E&B. If requested by City Manager or City Attorney, Any additional documents pertaining to the matter, including specific documents filed by E&B in response to any such lawsuit, claim, notice of violation or notification of administrative or governmental agency investigation, as well as the final decision, determination, agency or administrative action of findings, shall be submitted to City upon requestsimultaneously with E&B’s filing or submission, or within three (3) days of receipt of such documents by E&B. E&B’s routine correspondence to said agencies need not be routinely submitted to City, but shall be made available to City promptly upon City’s written request. 6.266.27 Severability. Invalidation of any of the provisions contained in this Agreement, or of the application thereof to any person, by judgment or court order, shall in no way affect any of the other provisions hereof or the application thereof to any other person or circumstance, and the same shall remain in full force and effect, unless enforcement of this Agreement, as so invalidated, would be unreasonable or inequitable under all the circumstances or would frustrate the purposes of this Agreement and/or the rights and obligations of the parties hereto. 6.276.28 Interpretation. The language in all parts of this Agreement shall in all cases be construed simply, as a whole and in accordance with its fair meaning and not strictly for or Formatted: No underline 47 Development Agreement between City of Hermosa Beach and E&B Natural Resources against any party. The parties hereto acknowledge and agree that this Agreement has been prepared jointly by the parties and has been the subject of arm's length and careful negotiation over a considerable period of time, that each party has independently reviewed this Agreement with legal counsel, and that each party has the requisite experience and sophistication to understand, interpret and agree to the particular language of the provisions hereof. Accordingly, in the event of an ambiguity in or dispute regarding the interpretation of this Agreement, this Agreement shall not be interpreted or construed against the party preparing it, and instead other rules of interpretation and construction shall be utilized. 6.286.29 Counterparts. This Agreement may be executed in duplicate counterpart originals, each of which is deemed to be an original and all of which when taken together shall constitute one and the same instrument. 6.296.30 Entire Agreement. This Agreement consists of __ pages and ______________ exhibits (designated __ through __), which constitute the entire understanding and agreement of the parties, and, with the exception of (1) the Lease; (2) the Settlement Agreement; (3) the Agreement to Implement the Settlement Agreement dated July 23, 2014; and (4) the Reimbursement Agreement dated May 17, 2012 shall supersede any prior agreements, discussions, commitments, representations or agreements, written or oral, between the parties hereto with respect to this Agreement. IN WITNESS WHEREOF, the parties have each executed this Agreement on the date first written above. CITY OF HERMOSA BEACH E&B NATURAL RESOURCES MANAGEMENT CORPORATION By:____________________________ By:___________________________________ Mayor President 48 Development Agreement between City of Hermosa Beach and E&B Natural Resources ATTEST: By: _____________________________ City Clerk APPROVED AS TO FORM: By: ____________________________ By: _________________________________ City Attorney Attorneys for E&B Natural Resources Management Corporation Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-1” LEGAL DESCRIPTION 555 6TH STREET, HERMOSA BEACH, CALIFORNIA 90254 That portion of APN 4187-031-900 described as: That portion of Lot A lying south of a line commencing at the northeasterly corner of Lot 11, Block U, Tract 2002, as per Map recorded in Map Book 22, Pages 154 and 155, in the Office of the Recorder of the County of Los Angeles, and continuing along the easterly prolongation of the northerly line of said Lot 11, to the easterly line of Lot A; Lots 11 through 18, Block R, Tract 2002; Lots 11 through 18, Block U, Tract 2002; and the vacated portion of Bard Street adjoining said lots. Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-2” LEGAL DESCRIPTION 601 CYPRESS AVENUE , HERMOSA BEACH, CALIFORNIA 90254 APN 4187-030-037 Lots 11 Through 14, Block H, Tract 1686, M.B. 20- 188, City Of Hermosa Beach Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “A-3” LEGAL DESCRIPTION 636 CYPRESS AVENUE, HERMOSA BEACH, CALIFORNIA 90254 APN 4187-031-022 Lots 5 And Lot 6, Block I, Tract # 1686, M.B. 20- 188, City Of Hermosa Beach . Exhibit A Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources EXHIBIT “B” PROJECT DESCRIPTION (From Section 2.0 of FEIR) Revised with removal of City maintenance yard discussion The Proposed City Maintenance Yard Project described herein is a separate project that the City will undertake if the voters approve the Proposed Oil Project. This Development Agreement only applies to the Proposed Oil Project described below, and except for any obligations explicitly assigned to E&B herein and payments from E&B for the City Maintenance Yard Project, the Proposed City Maintenance Yard Project is not governed by this Agreement. To the extent feasible, references to the Proposed City Maintenance Yard have been removed from the Project Description. Project Description E&B Natural Resources Management Corporation (E&B), the Applicant, is proposing the E&B Oil Drilling & Development Project (Proposed Oil Project) on a 1.3-acre site located in the City of Hermosa Beach (City). The site for the Proposed Oil Project (Project Site), as shown in Figure 2.1, would be located at 555 6th Street, bounded on the east by Valley Drive and on the south by 6th Street, approximately seven blocks east of the beach and the Pacific Ocean. Oil and gas pipelines constructed and used by the Project would extend from the Project Site to one of four potential valve box locations for the oil line and to a Southern California Gas (SGE) metering station for the gas line. The Project Site is owned by the City and is currently used as the City (Public Works) Maintenance Yard. The Applicant has leased the Project Site from the City for the implementation of the Proposed Oil Project. The Proposed Project is composed of two parts: 1) the relocation of the City Maintenance Yard (called the Proposed City Maintenance Yard Project); and 2) the development of an oil and gas facility on the current City Maintenance Yard site (called the Proposed Oil Project). In order to clear the current City Maintenance Yard site (called the Project Site) for the construction of the Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Directional Drilling Drilling wells at multiple angles to better reach and produce oil and gas reserves. Directional drilling allows for multiple wells from the same drilling location. proposed oil and gas facility, the City Maintenance Yard would be temporarily relocated during Phase 1 of the Proposed Project. If it is determined that the production of oil and gas on the Project Site would be economically viable (Phase 2 of the Proposed Project), construction of the permanent City Maintenance Yard would be completed once Phase 3 of the Proposed Project begins. The permanent Proposed City Maintenance Yard Project has two options: a Parking Option, which would add a net 97 parking spaces with a below grade parking garage, and a No Added Parking Option, which would have the same amount of parking as is currently available. This Project Description reflects information contained in the Project Application submitted to the City of Hermosa Beach by the Applicant, along with supporting information provided in conjunction with the Project Application (E&B Natural Resources, Planning Application and Appendices, Volumes 1 – 3, November 14, 2012; Response to Planning Application Completeness Review, April 11, 2013; Response to Requested Clarifications, June 24, 2013; Quantitative Risk Analysis, July 3, 2013; Errata, July 22, 2013).1Information related to the relocation of the City Maintenance Yard and construction and operation of the Proposed City Maintenance Yard is derived from information provided by the City of Hermosa Beach Public Works Department. The description of the Proposed Project incorporates the essential elements of the Project as it is proposed, including all phases and major components as well as the locations of all proposed offsite activities (in addition to those occurring on the Project Site). More detailed information related to some aspects of the Proposed Project (including proposed operational parameters and design features) may be found within individual sections of the Final Environmental Impact Report (EIR), where considered relevant to the discussion of specific environmental issues and/or effects. In addition, a description of the environmental setting and current conditions related to the environmental issues is presented in the Environmental Setting subsection of the individual sections of the Final EIR. 1 Information submitted by the Project Applicant is available for public review at the City of Hermosa Beach Community Development Department. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources This section discusses the Project objectives, historical operations on the Proposed Project Sites, the four phases of the Proposed Oil Project, scheduling, vehicle trip and employee requirements, and necessary permitting associated with the Proposed Project. A number of technical drawings related to the Proposed Project design and layout are included in Appendix A to the Final EIR. 2.1 Project Overview The Applicant proposes the development of an onshore drilling and production facility site that would utilize directional drilling of 34 wells (30 oil wells, four wells for water disposal/injection) to access the oil and gas reserves in the tidelands (pursuant to a grant by the State of California to the City) and in an onshore area known as the uplands. Both of these areas are located within the Torrance Oil Field within the jurisdiction of the City. In addition, the Proposed Project would result in the installation of offsite underground pipelines for the transportation of the processed crude oil and gas from the Project Site to purchasers, extending through the Cities of Redondo Beach and Torrance. The Applicant proposes a laydown site for supply staging/storage within the basement level of the industrial building at 601 Cypress Avenue during the construction phases. The Applicant also proposes to construct a parking lot at 636 Cypress Avenue for use by some of its construction employees/contractors on weekdays and by the public at other times. The City Maintenance Yard is proposed to be relocated to a temporary facility to be established on the rear (westerly) portion of the City Hall site (1315 Valley Drive) prior to and during the initial phase of the Proposed Oil Project so that the maintenance operations could be moved when the existing City Maintenance Yard is demolished as part of Proposed Oil Project activities. The construction of the permanent City Maintenance Yard would be undertaken on the site now occupied by the Hermosa Self-Storage (552 11th Place) after the Applicant completes the testing phase of the Proposed Oil Project in Phase 2. As indicated below, the permanent City Maintenance Yard and the oil and gas facility on the Project Site would be constructed at the same time during Phase 3 of the Proposed Project. The timeframe from commencement of the Proposed Project until the permanent oil and gas facility would be operational is estimated to be approximately 3.25 years. The existing lease (Oil and Gas Lease No. 2) allowing drilling into the tidelands provides for a 35-year period. Table 2.1 summarizes events in the Proposed Project timeline. Specifics of each of the Proposed Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Project components are described in the following sections. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.1 Proposed Project Location Source: Project Application, Amendments and Appendices Hermosa Beach Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.1 Proposed Project Schedule Summary Phase Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Temporary City Yard Oil Project Phase 1 Oil Project Phase 2 Drill Test Permanent City Yard Oil Project Phase 3* Oil Project Phase 4* Drill Operate Continuously for 30+ years Re-drills Average 30 days/year, max 150 days/yr** Note: * If the test phase is determined to be successful, Phase 3 and 4 would occur. For construction only. Does not include permitting timeframe. ** These are the maximum proposed by the Applicant. The 150 days per year would occur once every 5 years. Most likely re-drill activity would be lower. 2.2 Proposed Project Objectives Pursuant to Section 15124(b) of the California Environmental Quality Act (CEQA) Guidelines, the description of the Proposed Project is to contain “a clearly written statement of objectives” that would aid the lead agency in developing a reasonable range of alternatives to evaluate in the EIR and would aid decision makers in preparing findings and, if necessary, a statement of overriding considerations. The City is the lead CEQA agency which prepared the EIR, considered the EIR for certification and is placing the Proposed Project on the ballot. Project approvals will be made by the electorate of the City of Hermosa Beach. As part of the Project Application, the Applicant provided its stated objectives for the Proposed Oil Project, which consist of the following: 1. Develop the Proposed Oil Project consistent with the 1993 Conditional Use Permit and the March 2, 2012 Settlement Agreement, with the utilization of directional drilling Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources techniques from the Project Site, which is the current City Maintenance Yard; 2. Maximize oil and gas production from the Torrance Oil Field within the City’s jurisdiction, thereby maximizing the economic benefits to the City; 3. Provide an oil and gas development project on the Project Site that utilizes the latest technology and operational advancements related to safety and production efficiency in order to provide a project that would be safe and would meet the applicable environmental requirements; 4. Conduct construction and drilling activities on the Project Site incorporating technological advancements, operational practices, and design features related to air quality, odors, noise, hazards, and water quality to minimize the potential impacts on the adjacent community and the environment; 5. Provide landscaping, hardscape, signage, lighting, and other design features to minimize the visual effects of the Proposed Oil Project on the adjacent community; and 6. Implement operational practices and incorporate design features to provide safe vehicular ingress and egress during temporary construction activities and the ongoing operation of the Proposed Oil Project. Pursuant to the March 2, 2012 Settlement Agreement between the City of Hermosa Beach, E&B, and Macpherson Oil Co., the City’s primary objective is to comply with the California Environmental Quality Act and place on the ballot a measure allowing the City of Hermosa Beach electorate to decide whether or not to approve the Applicant’s Proposed Oil Project and a Development Agreement to vest the Project so that, if approved, the Project cannot later be invalidated by a vote of the people. In the event that voters approve the Proposed Oil Project, the City would need to relocate the City Maintenance Yard. Under those conditions, the City's objectives for relocation of the City Maintenance Yard would be to: 1. Provide City Yard Maintenance facilities that support provision of high-quality City services in an integrated and cost-efficient manner; 2. Consolidate City facilities and functions for maximum efficiency and flexibility; 3. Minimize disruption of City functions during relocation of the City Maintenance Yard; 4. Ensure the relocated City Maintenance Yard is compatible with surrounding uses; and 5. Ensure there is no net loss of public and employee parking spaces as a result of both the Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Proposed Oil Project and the relocation of the City Maintenance Yard consistent with the Preferential Parking Program approved by the Coastal Commission. 2.3 Historical and Current Operations Oil drilling and production in the Los Angeles Basin has a long history. According to the California Division of Oil, Gas, and Geothermal Resources (DOGGR) database, almost 30,000 oil wells have been drilled in the Los Angeles Basin in the last 100 to 150 years. Figure 2.2 shows the location of these wells. The Proposed Oil Project would drill into the western edge of the Torrance Oil Field (see Figure 2.2). Most of the production from the Torrance Oil Field has been generated from wells drilled in the City of Torrance, with some drilling in the Cities of Redondo Beach and Hermosa Beach. There have been approximately 1,500 wells drilled in the Torrance Oil Field historically. Although the Project Site is relatively flat, it is underlain by windblown sand dunes that previously covered the region, resulting in uneven ground due to natural conditions. In the 1920s and 1930s, the northeastern portion of the Project Site had a large depression that was mined for sand. Around 1927, the City’s dump and refuse burner were located on the Project Site, and, by 1947, the depression was filled. The resulting former landfill is approximately 45 feet deep and is filled with glass, porcelain, and ceramic towards the bottom and soils containing miscellaneous metals, wires, glass, and other materials toward the top (i.e., closer to the ground surface). Between the depths of 3 feet and 25 feet below ground surface (bgs), the former landfill contains some soil with lead at concentrations above the Environmental Protection Agency (EPA) Region 9 Industrial Regional Screening levels. In addition, soils impacted with total petroleum hydrocarbons (TPH) were found at depths of 25 to 44 feet bgs within the central portion of the landfill. For a detailed discussion of the soil conditions on the Project Site, refer to Section 4.7, Geological Resources/Soils, of the Final EIR. Figure 2.2 Historical Wells Drilled in the Los Angeles Basin Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: DOGGR In 1930, an oil well (Stinnett Oil Well No. 1) was drilled in the western portion of the Project Site. The oil well was abandoned in 2005, consistent with the then-current standards of the DOGGR. During the mid-1940s, the first building was constructed on the Project Site for City maintenance uses, with the last building constructed in the 1980s. Since the 1990s, with the exception of the addition of trailers, storage containers, and sheds, the Project Site has generally remained unchanged. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The Project Site is currently developed as the City Maintenance Yard, and the Proposed Oil Project would require the relocation of the City Maintenance Yard. As indicated in Figure 2.3, existing development on the Project Site consists of three buildings, two trailers, storage containers, sheds, trash bins, a propane tank, concrete paving and asphalt, fencing, and masonry walls. In addition, within the boundaries of the Project Site, there is an asphalt parking area in the southern portion of the City Maintenance Yard that provides 15 parking spaces for employees (Monday through Thursday between the hours of 6:00 a.m. and 6:00 p.m.) and for the public after hours (6:00 p.m. to 6:00 a.m.) and on weekends and holidays. Existing site contamination from historical site uses is also shown in Figure 2.3. According to an Environmental Site Assessment prepared in 2012 (Brycon 2012), 10 of the 73 soil samples taken exceeded Regional Water Quality Control Board guidelines for total petroleum hydrocarbons, all within the mid range hydrocarbons (C13-C22). Volatile organic carbons were not present in any of the samples at concentrations above the EPA Region 9 Industrial Regional Screening Levels. Six of the samples exceeded the EPA Region 9 Industrial Regional Screening Levels for lead. In addition, a series of groundwater borings conducted in 2013 (Brycon 2013) found the presence of total petroleum hydrocarbons, lead, barium, and arsenic in the groundwater below the City Maintenance Yard that exceeded the Maximum Contaminant Levels (MCLs) established for drinking water by the Regional Water Quality Control Board. The immediately adjoining properties were sparsely developed into the 1940s, with a few residential units located to the northwest of the Project Site. Post 1940s, significant development occurred with industrial buildings being constructed to the south and west of the Project Site by 1953 and to the north of the Project Site by the 1960s. By 1960, the buildings to the west of the Project Site were identified as containing a building material warehouse, a boat repair shop, and a contractor’s storage yard. By 1960, the building to the south was being utilized as a planter mix manufacturing site. Since the 1960s, the various adjoining buildings have been utilized for multiple small businesses as industrial/commercial uses. To the east, from the late 1800s, there was a railroad right-of-way (ROW) that was utilized by the Santa Fe Railway. During the 1960s, the railroad ROW was converted to a greenbelt/park (Veterans Parkway - Hermosa Valley Greenbelt (Greenbelt)), followed by a Council initiative in 1987 directing the City of Hermosa Beach to acquire the Railroad ROW for public use as parkland and open space in perpetuity; the property is zoned Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources O-S-1 Restricted Open Space. Currently, other land uses adjacent to the Project Site (on the same block between 8th and 6thStreet and Cypress Avenue and Valley Drive) are commercial/industrial (Cypress Auto Body, A&B Heating, JB Plumbing, McGivern Surfboard Manufacturing, Buddhist Meditation Center, NUWORK, a recording studio and other various small commercial/industrial businesses), with some residential uses along 8th Street to the north. Adjacent blocks include residential uses located 150 feet to the north of the Project Site, 250 feet to the west and 180 feet to the east (east of the Greenbelt), with small commercial/industrial uses and the Beach Cities Self Storage facility located to the immediate south across 6th Street with its required parking lot abutting the southwest corner of the Project Site. Figure 2.4 shows the southern area of the City of Hermosa Beach along with land uses. Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.3 Existing Site Conditions Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant Project Application, DOGGR well database, Phase 2 Environmental Site Assessments Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.4 Project Site and Area Land Uses (Zoning Map) Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: City of Hermosa Beach Zoning Map, November 2013 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 1 Site Preparation 6-7 Months 2.4 Proposed Oil Project Phases The Proposed Oil Project would occur in the following four phases: Phase 1: Site Preparation; Phase 2: Drilling and Testing; Phase 3: Final Design and Construction; and Phase 4: Development and Operations. Each phase is discussed in the following sections. The Applicant proposes a facility designed for a maximum capacity of 8,000 barrels per day (bpd) of crude oil and 2.5 million standard cubic feet per day (scfd) of produced gas at completion of the drilling stage of the Proposed Oil Project in Phase 4. The operational parameters of the Proposed Oil Project are summarized in Table 2.2. Prior to the initiation of the Proposed Oil Project, it would be required that plans be submitted by the Applicant to the City and other permitting authorities for review and approval. These would include coastal development permits, oil and gas well permits, demolition plans, grading plans, utility and electrical plans, cement/foundation plans, landscaping plans, street and ROW improvement/modification plans, and construction plans, amongst others. Figure 2.5 shows the Project Site along with the electrical and pipeline connections and the Cypress Avenue parking lot. 2.4.1 Phase 1 Site Preparation The purpose of Phase 1 would be to prepare the Project Site for drilling and testing as well as for the subsequent phases of the Proposed Oil Project. It is anticipated that Phase 1 would occur for approximately six months. Prior to Phase 1 activities, the temporary City Maintenance Yard would be installed. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.1.1 Phase 1 Construction Activities Phase 1 would consist of the following construction activities: Underground existing overhead utilities; Construction of modifications to intersection of 6th Street and Valley Drive; Relocation of City Maintenance Yard to the temporary site; Clearance of Project Site; Construction of retaining walls and rough grading; Installation of perimeter fencing; Construction of well cellar; Installation of offsite electrical conduit and onsite electrical equipment; Completion of onsite surface and entrance/exit; Installation of temporary landscaping; and Installation of 35-foot sound attenuation wall.(per Mitigation Measure NV-3a) Table 2.2 Proposed Oil Project Design Parameters Parameter Value Crude oil production Phase 2: Up to 800 bpd Phase 4: Up to 8,000 bpd Crude oil properties 18 API Natural gas production Phase 2: Up to 250,000 scfd Phase 4: Up to 2.5 million scfd Produced water disposal/injection Phase 2: Up to 1,600 bpd Phase 4: Up to 16,000 bpd Maximum number of wells Phase 2: 4 wells (3 production, 1 water disposal/injection) Phase 4: 34 total (30 production, 4 water disposal/injection) NGL production Up to 1 bpd mixed with crude oil Pipeline length and tie-in, gas Approx. 0.43 miles + 1.4 miles Pipeline length and tie-in, crude Approx. 3.55 miles Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Water use, during construction Approx. 2,000 gallons per day during grading and earthwork (potable) Approx. 10,000 gallons per day during pipeline installation (potable) Approx. 20,000 gallons per month during facility construction (potable) Water use, during drilling 130,000 gallons per well (reclaimed water) (Approx. 4,500 gallons per day) Water use, during operations and maintenance (Landscaping- Reclaimed Water) (Domestic-Potable Water) 1,300 gallons per day (1,000 gallons per day for landscaping) (300 gallons per day for domestic use) Electrical use, Phase 2 4.5 megawatts (including drill rig) Electrical use, Phase 3 0.3 megawatts Electrical use, Phase 4 7.0 megawatts (including drill rig) 3.0 megawatts during normal ongoing operations Onsite electrical generation of 1 MW Well workovers, annually 90 days/year Well re-drills (full sized drilling rig, peak annually Up to 5 per year, up to 30 re-drills for the life of the Project Notes:bpd = barrels per day; kW = kilowatts; scfd = standard cubic feet per day; NGL = natural gas liquids; API = American Petroleum Institute; estimated peak values and maximums shown Source: Project Application, Amendments and Appendices. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.5 Project Site and Pipeline/Electrical Connections Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: E&B Supplemental Application materials, January 2014 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Each of these activities is discussed in the following subsections. Figure 2.6 shows the proposed arrangement of the Project Site under Phase 1. Appendix A of the Final EIR provides the conceptual grading plan, site plan, elevations, and landscape concept plan for the Proposed Oil Project at the completion of Phase 1. The laydown area (equipment and supply storage/staging) for the Proposed Oil Project would be in the basement of the building located at 601 Cypress Street on the northwest corner of Cypress Street/6th Street (See Figure 2.3). Underground Existing Overhead Utilities There are currently overhead power lines and communication lines on poles that run overhead through the existing trees along Valley Drive. These existing lines would be removed along the Project frontage and relocated underground adjacent to the Project Site in a location determined by the utility companies and the City. Appendix A of the Final EIR provides drawings showing the general location where the utility lines would be placed underground. Construction of Modifications to Intersection of 6th Street and Valley Drive The Proposed Oil Project would include the construction of modifications to the intersection of 6th Street/Valley Drive to provide the necessary turning radius for Project-related trucks. Appendix A of the Final EIR provides drawings showing the conceptual design of the proposed intersection modifications. These modifications would result in: Removal of a portion of the landscaped area and entry driveway to the Beach Cities Self Storage facility; Redesign of the sidewalk on the southwest corner of the intersection; Relocation of the stop sign and striping for the northbound lanes on Valley Drive to address the redesign of the southwest corner; Removal of a utility pole and underground utilities on the southwest corner of the intersection; Removal of a utility pole and underground the utilities on 6th Street; and The removal of two on-street parking spaces on 6th Street. As a part of the intersection modifications, the stop sign and striping for the southbound lanes on Valley Drive would be relocated to improve the line of sight to and from the intersection with 6th Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Street. This modification would be made concurrently with the addition of the perimeter fencing on the Project Site (See Figure 2.6). In addition, the curb on the northwest corner along 6th Street adjacent to the Project Site would be temporarily provided as a rolled asphalt curb for Phases 1 and 2. The two on-street parking spaces removed from 6th Street would be provided as part of the Project’s overall parking replacement program discussed further below. Relocation of the City Maintenance Yard Prior to Phase 1, a temporary City Maintenance Yard would be built at the New City Maintenance Yard location to the rear of City Hall at 1315 Valley Drive. At this point, the maintenance operations would be moved into the temporary City Maintenance Yard. Clearance of the Project Site Prior to the initiation of the site clearance activities, temporary 24-foot sound attenuation walls (per Mitigation Measure NV-1a) would be erected at the Project Site to reduce noise impacts related to construction. These sound walls would be designed to be movable and would be relocated within the Project Site as needed to attenuate noise associated with Phase 1 demolition and construction activities. The temporary sound walls would be removed from the Project Site after the onsite construction activities in Phase 1 are completed. Following the relocation of the City Maintenance Yard , the Project Site would be cleared. The site clearance activities would include the removal of three existing buildings (one of which would be moved to the temporary site), two trailers, storage containers, sheds, trash bins, a propane tank, concrete paving and asphalt, fencing and masonry walls. In addition, the asphalt parking area to the west of the City Maintenance Yard would be removed, resulting in the removal of 15 parking spaces. The building located at 636 Cypress Avenue would also be demolished at this time to clear the parcel for the off-site temporary parking area. Prior to the demolition of both buildings, building materials would be assessed for asbestos content and presence of lead based paint, consistent with the requirements of the South Coast Air Quality Management District (SCAQMD). If asbestos containing materials or lead based paint are detected, the appropriate abatement process would be implemented. The building materials removed from the Project Site would be transported by truck to the recycling facility at Southern Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Water Injection Pumping produced water back down the well hole into the oil reservoir from which it was originally extracted. California Disposal in Santa Monica, the recycling facilities at Hanson Aggregates in Long Beach, or another certified facility for recycling or disposal. The Proposed Oil Project would include an overall parking replacement program that meets the intent of the City’s Preferential Parking Program and Coastal Development Permit requirements. Section 2.4.5 discusses the parking plan for the Proposed Oil Project. Three of the four existing mature trees along the frontage of the Project Site on Valley Drive would be retained to help screen construction activities. The Applicant has concluded that the fourth tree should be removed because it is in poor health, and it would limit access to the Project Site (See Figure 2.6). The three remaining trees would be trimmed to keep branches from hanging over onsite equipment and to help prevent trespassing. Construction of Retaining Walls and Rough Grading Once the Project Site is cleared, retaining walls would be constructed along the western boundary of the Project Site and set back 10 feet along the western portion of the southern property boundary (See Figure 2.6). Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.6 Proposed Oil Project Phase 1 Conceptual Site Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources [need to fix this image] Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Rough grading would occur to allow for: The construction of a well cellar for three test oil wells and a water disposal/injection well; Surface drainage towards a temporary retention basin, which would contain a 100-year flood event; A level area for the set up and movement of the drill rig; and The installation of temporary production equipment. It is anticipated that the rough grading would not require the import or export of fill material. Appendix A of the Final EIR provides the conceptual grading plan that indicates the retaining wall locations and rough grading at the completion of Phase 1. Installation of Perimeter Fencing Following the rough grading, the Project Site would be enclosed by a six-foot temporary perimeter chain link fence covered with green fabric. The fence would include secured gates for the entrance off Valley Drive and the exit to 6th Street. The Applicant proposes to include the appropriate signage consistent with the requirements of the City. Figure 2.6 shows the location of the fencing and gates at the completion of Phase 1, and Appendix A of the Final EIR shows an elevation of the fencing. Construction of Well Cellar A cement well cellar approximately 8 feet wide by 40 feet long by 12 feet deep would be constructed for three test wells and one water disposal/injection well to allow for the drilling of the wells in Phase 2. The well cellar would provide containment of any potential oil spillage during Phase 2. Figure 2.6 shows the location of the well cellar. Installation of Offsite Electrical Conduit and Onsite Electrical Equipment Electrical service for the Proposed Oil Project would be provided by Southern California Edison (SCE). The electrical conduit and onsite electrical equipment for all phases of the Proposed Oil Project would be installed in Phase 1. The electrical load during Phase 2 and Phase 3 would be 4.5 Megawatts (MW) and 0.3 MW, respectively. During Phase 4, the electrical load during Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources drilling would be 7.0 MW and during ongoing operations would be 3.0 MW. According to the Applicant, SCE has determined that the existing 16 kilovolt (kV) circuit running along 8th Street to the north of the Project Site has the necessary capacity to serve the Proposed Oil Project. To receive electrical service from SCE, the Proposed Oil Project would provide for the installation of an underground conduit for a linear distance of 280 feet under Valley Drive from 8th Street to the northeast corner of the Project Site (see Figure 2.6) Electrical equipment consisting of step down transformer(s), switchgear, and variable frequency drive units would be installed in the northeast corner of the Project Site designated as the New SCE Yard in Figure 2.6. The electricity would be used to provide power for well pumps, the temporary production equipment, the temporary construction trailer, safety system controls, onsite lighting, and the drill rig used in Phase 2 and Phase 4 (both drilling and re-drills). An uninterruptable power supply would be installed for critical systems such as the temporary production equipment safety systems and security lights. An emergency generator would be installed to provide power for the safe shutdown of the drilling operation in the event of a loss of power from SCE. Appendix A of the Final EIR provides the general location of the offsite underground conduit. Completion of Onsite Surface and Entrance/Exit The surface of the Project Site would be covered with crushed aggregate base material to serve as a dust inhibitor and driving surface. Temporary berms would be constructed around the areas where the drill rig and associated equipment would be set up and the temporary production equipment installed to provide secondary containment. In addition, a temporary berm would be provided around the well cellar to avoid surface flows from entering the well cellar. The existing driveway access from Valley Drive and 6th Street would be used. On both sides of the driveway on 6th Street, a rolled asphalt curb would be provided. Installation of Temporary Landscaping Landscaping would be provided along the eastern and southern perimeter of the Project Site to provide a visual buffer. The plant materials and irrigation would be consistent with the requirements of the City. The trees and other plant materials would be planted in a manner that Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources allows for their replanting as a part of the permanent landscaping provided in Phase 3. Reclaimed water supplied by West Basin Municipal Water District would be used for irrigation. The reclaimed water line serving the Greenbelt east of Valley Drive would be tapped and extended to the Project Site. Appendix A of the Final EIR includes a conceptual landscape plan and plant materials for the temporary landscaping provided at the completion of Phase 1. Installation of 32-Foot Sound Attenuation Wall Upon completion of the Phase I improvements, a 35-foot sound attenuation wall (per Mitigation Measure NV-3a) would be erected inside the chain link construction fence in order to attenuate noise generated during Phase 2 drilling and testing. The 35-foot sound wall would stay installed through the duration of Phase 2. 2.4.1.2 Phase 1 Site Preparation Detailed Schedule It is anticipated that Phase 1 would occur for a period of approximately six months as indicated in the schedule provided in Table 2.3. As required by the previous Conditional Use Permit and as proposed by the Applicant, the construction activities on the Project Site, including the operation of earthmoving equipment, would be conducted between the hours of 8:00 a.m. and 6:00 p.m. Monday through Friday (except holidays) and 9:00 a.m. and 5:00 p.m. on Saturdays. Offsite construction activities within the public ROW would occur between the hours of 8:00 a.m. and 3:00 p.m. Monday through Friday in the City of Hermosa Beach. Truck deliveries to the Project Site would be limited to the hours between 9:00 a.m. and 3:00 p.m. Monday through Friday, except in the case of an emergency and with the prior approval of the Director of Public Works. The Project-related truck trips would be limited to 18 round trips per day and limited to the designated truck routes. 2.4.1.3 Phase 1 Site Preparation Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 1 are provided in the detailed Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources listing in Appendix A of the Final EIR. Vehicle trips are summarized in Table 2.4. The Project- related personnel would utilize parking spaces in an offsite parking area provided consistent with the proposed parking plan described in detail in Appendix A. Table 2.3 Phase 1 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Construction of Temporary City Yard Underground overhead utilities 6thStreet & Valley intersection Relocation of Yard Remove buildings Remove other site structures Construct retaining walls Grade, well cellar, aggregate Construct chain link fence Construct well cellar Install electrical service Install landscaping Install 32-foot sound wall Note: relocation of Yard would only include moving of shop materials and equipment. The Temporary City Maintenance Yard would be construction prior to the start of Phase 1 and would take approximately 9 months. See section 2.5. 2.4.1.4 Phase 1 Truck Routes Truck trips would be required in order to deliver and remove construction-related materials and equipment to and from, respectively, the Project Site. Trucks would utilize roads designated as truck routes by the cities of Hermosa Beach, Redondo Beach, Manhattan Beach and Torrance. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Truck routes are shown in Figures 2.13 and 2.14. The routes identified by the Applicant as those utilized for all phases of the Project are as follows: Inbound Trucks 1. Inbound trucks from westbound Artesia Boulevard 2. Left on to southbound Pacific Coast Highway 3. Right on to westbound Pier Avenue 4. Left on southbound Valley Drive 5. Right into the Project driveway on Valley Drive Or 6. Inbound trucks from westbound 190th Street (which becomes Anita Street) 7. Right on northbound Pacific Coast Highway 8. Left on to westbound Pier Avenue 9. Left on to southbound Valley Drive 10. Right into the Project driveway on Valley Drive Outbound Trucks 11. Outbound trucks on to eastbound 6th Street 12. Right on to southbound Valley Drive 13. Left on to eastbound Herondo Street 14. Continue onto Anita Street, then 190th Street to the Interstate 405 (I-405)/ Crenshaw interchange Or 15. Outbound trucks on to eastbound 6th Street 16. Right on to southbound Valley Drive 17. Left on to eastbound Herondo Street Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 2 Drilling and Testing: Drilling for 3-4 Months Testing for 7-9 Months More 18. Left on to northbound Pacific Coast Highway 19. Right on to Artesia Boulevard. 2.4.2 Phase 2 Drilling and Testing The purpose of Phase 2 would be to conduct the drilling and testing of wells in order to determine the potential productivity and economic viability of the Proposed Oil Project. During this phase, up to three test wells and one water disposal/injection well (a total of four wells) would be drilled. These wells would be drilled utilizing directional drilling technology, which enables the wells to be drilled laterally for long distances, so that the bottom-hole locations may be located several thousand feet from the surface location of each wellhead on the Project Site (see Figure 2.7 and 2.8). 2.4.2.1 Phase 2 Site Geology and Drilling Objectives The Proposed Oil Project would utilize directional drilling techniques to access the crude oil and gas reserves in the tidelands (offshore) and uplands (onshore) in the portions of the Torrance Oil Field within the City’s jurisdiction. The Project Application states that "no hydraulic fracturing (or “fracking”) of wells will occur because the geologic zones for the Proposed Project are permeable and capable of yielding oil and gas without hydraulic fracture stimulation." Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.4 Phase 1 Vehicle Trip Summary Activity Trucks, Maximum RT/day* Autos/PU, Maximum RT/day Total, Maximum RT/day Underground overhead utilities 4 10 14 Construct 6th& Valley intersection 3 8 11 Remove buildings 10 8 18 Remove other existing site structures 15 6 21 Construct retaining walls 5 14 19 Grade, well cellar and aggregate 15 10 25 Construct chain link fence 1 4 5 Construct well cellar 4 8 12 Install electrical service 6 15 22 Install landscaping 1 2 3 Install 32-foot sound attenuation wall 3 12 14 Greatest number of trips in one day 18 (during week 9) 31 (during week 12) 43 (during week 10) Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum truck activity occurs during week 9 with the installation of electrical service and the removal of existing structures. Maximum auto activity occurs during week 12 with the installation of electrical service and construction of the retaining wall. Maximum activity trucks and autos combined occur during week 10. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for each week. Source: Project Application, Amendments and Appendices The approximate extent of the City’s jurisdiction within the Torrance Oil Field is provided in Figure 2.7. Figure 2.8 provides a typical well cross section illustrating how wells can reach the oil reserves, within the tidelands, from the Project Site. The Project Application states the primary target zones are the Upper Main, Lower Main, and Del Amo Zones with some production potential within the Schist Conglomerate. As shown in Figure 2.8, the Upper Main Zone is the uppermost part of the Puente Formation. The Project Application states that it is expected to be the shallowest oil productive zone in the City. Of the three known producing horizons in the Torrance Oil Field, the Upper Main Zone is the most prolific. The Upper Main Zone beneath the Hermosa Beach tidelands and uplands is expected to be 300 feet thick and composed of inter-bedded thin sands and shales. The shales are currently fractured and provide both fractured porosity and permeability. The fractures are Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources critical to the performance of the reservoir in the area due to the fine-grained and thin-bedded nature of the sands. The Lower Main Zone lies below the Upper Main Zone in the Puente Formation. The Project Application states that similar to the Upper Main Zone, the shales of the Lower Main Zone are currently fractured and important for oil production. However, the Lower Main Zone has fewer interbedded fine-grained sands and is over 500 feet thick. Figure 2.7 Proposed Oil Project Lease Areas (below) Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Project Application Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Final Environmental Impact Report 2-93 E&B Oil Drilling & Production Project Figure 2.8 Applicant Proposed Oil Project Lease Areas Cross Section Source: Project Application. Representative figure not to scale or reflective of the exact geology of the region. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The Del Amo Zone lies beneath the Lower Main Zone. It contains the least amount of thin- bedded sandstone in the Puente Formation. The Project Application states that similar to the other two zones, the shales of the Del Amo Zone are currently fractured and important for oil production. The Del Amo Zone varies the most in thickness and could be from 200 feet up to 700 feet thick. The Schist Conglomerate underlies the Del Amo Zone and is resting on metamorphic basement rock (Catalina Schist). The Schist Conglomerate could be as much as 400 feet thick and is composed of reworked fragments derived from erosion of the underlying Catalina Schist. The Project Application states that although it is unknown if the Schist Conglomerate is productive beneath the City, it is still a viable exploration target. The production test wells would target areas to the south-west, the north-west and the north areas of the lease (see Figure 2.7). The wells for the Proposed Oil Project would be at a true vertical depth of approximately 3,000 feet and a measured depth of approximately 9,000 feet. The actual well depth would vary depending on the area targeted. The Applicant indicates that the wellhead pressures anticipated during and immediately after drilling would be 0.0 pounds per square inch (psi) and that the wells are not anticipated to be free-flowing. DOGGR must review and approve an engineering study conforming to CCR Section 1724.6 and 1724.7 for operations. No Class II injection wells will be permitted prior to review and approval of the study. A Notice of Intent will need to be submitted for each proposed well. The Notice of Intent will be reviewed for accuracy and completeness and, if appropriate, a drilling permit issued. 2.4.2.2 Phase 2 Construction and Drilling Activities Phase 2 construction and drilling would consist of the following activities and improvements: Installation of Temporary Construction Trailer Delivery and Set Up of Drill Rig Installation of Temporary Production Equipment Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Drilling of Wells Testing and Operational Systems These activities are discussed in the following subsections. Phase 2 Installation of Temporary Construction Trailer A temporary construction trailer would be installed in the northeast portion of the Project Site (see Figure 2.9). In addition, the associated utilities, including potable water and sewer, would be extended from the existing lines currently located along 6th Street that serve the City Maintenance Yard. Water and sewer service would be provided by the California Water Service Company and the City, respectively. Electricity would be provided by Southern California Edison (SCE) as discussed above under Phase 1 construction activities. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.9 Proposed Conceptual Site Plan - Project Phase 2 Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Automated Drilling Rig Ground Flare Phase 2 Delivery and Set Up of Drill Rig An electric drilling rig and its associated equipment would be brought to the Project Site on large trucks with trailers to be permitted by the City and the California Highway Patrol (CHP). The drilling rig would be an "automated drill rig" (ADR), which means that many of the drill rig procedures (loading pipe, etc,) would be done by mechanical means automatically. The approximately 87- foot high drill rig would be powered by electricity. A large crane with a 150-foot boom would be used to erect the drill rig. Support equipment for the drill rig would include pipe racks, mud and cutting system, pumps, hydraulic equipment, and an accumulator. In the event of a loss of power from SCE, a generator, which would be a non-road portable diesel-fuel generator certified by the California Air Resources Board (CARB), would provide power for the safe shutdown of the drilling operation. Phase 2 Installation of Temporary Production Equipment Temporary oil, water, and gas production equipment would be installed on the Project Site. This temporary equipment would include a well test station, an induced gas flotation/filter skid, a gas combustor (enclosed ground flare), fluid handling tanks, piping, vapor recovery unit, pumps, and vessels. The production equipment would be delivered by trucks to the Project Site. The temporary production equipment would be installed in the eastern portion of the Project Site within an area enclosed by a containment berm as shown in Figure 2.9. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Phase 2 of the Proposed Oil Project would be designed as a closed-loop system, with pressure relief valves venting to a flare and tanks venting to a vapor recovery system. The control system would be computerized and would monitor the closed-loop system, providing warnings, corrective actions, and shutdowns, if necessary. Corrective actions could be closing valves, sounding alarms, shutting down wells or other process related functions. In addition, according to the Applicant, redundancy would be built into the system to provide an extra level of protection, ensuring there would be a backup for each safety device. All safety devices would be tested on a regular basis as per applicable codes and standards. Operators would be onsite 24 hours per day, seven days per week, to monitor all aspects of the Proposed Oil Project’s production process. Phase 2 Drilling of Wells Once the drill rig and associated equipment set up is complete, up to three test wells would be drilled utilizing directional drilling technology. This would enable the wells to be drilled laterally for long distances so that the bottom-hole locations may be located horizontally several thousand feet from the surface location of the well head on the Project Site. All wells would be permitted, drilled and cemented in accordance with the State Division of Oil, Gas, and Geothermal Resources (DOGGR) regulations. Drilling would proceed in the following manner: Installation of conductor casing; Drilling of wells; Placement of casing and cementing of wells (in stages at various depths); and Completion of the well, including installation of down-hole pumps and tubing. Installation of Conductor Casing The conductor casing is the initial hole drilled into the ground with a large diameter pipe installed to maintain integrity. The subsequent drilling of the well would take place through the conductor casing. Conductor casing would be installed with a small drilling rig, referred to as a dry-hole digger, which would be used to set the conductor casing for all of the intended wells in the Project Site. A large diameter hole, about 18 inches in diameter, would be drilled to an approximately 80-foot depth. This type of drilling is similar to boring a hole with an auger. Usually, no drilling fluid is needed to drill the hole, hence the name dry-hole digger. A large Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources diameter casing, commonly referred to as “conductor pipe”, typically 13-3/8 inches in diameter, is lowered to the bottom of the hole and is cemented in place with construction concrete. This forms the first seal of the near-surface formations and also serves as a steel conduit to allow the drilling fluid used in the next stage of the well drilling to be circulated to the surface without washing away the shallow near-surface dirt. All conductors necessary to develop the Proposed Oil Project test phase would be set at this time and the dry-hole digger moved off before the drilling rig would be mobilized and brought to the Project Site. Drilling, Casing and Completion of Wells The components of the drill rig and all necessary equipment would then be moved onto the Project Site with large specially equipped trucks. The drill rig height would be 87 feet. The drilling setup would include three main parts; the drilling structure (i.e., mast, substructure, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources catwalk, silicon-controlled rectifier (SCR) house, top drive, back-up generator, crown block, traveling block, iron rough neck, drill pipe, control cabin), the blow out preventer (BOP) system (i.e., BOP Stack, Shear Ram, BOP Controller, and Accumulator), and the mud system (i.e., mud tanks, mud shakers, mud pumps, mud return line). The drilling rig would also require other equipment such as a spare parts house, other tanks, and storage areas as needed to support the drilling operation. The substructure of the drill rig would be located over the first well conductor casing, the mast would be raised, and the other equipment would be aligned and connected. The drill pipe would be laid out on racks convenient to the rig floor so they may be used when needed. Water tanks would be filled, and drilling fluid additives would be stored on site. The drill rig for the Proposed Oil Project would be run on electric utility power, so an electrical hookup would be made at this time. Drilling operations would then begin. The initial mobilization and rigging up operation is expected to last about seven to ten working days. “Spudding in” is the term used to begin drilling operations. A large (12 ¼-inch diameter) drill bit is attached to the first joint of drill pipe (usually 30 feet long) and lowered into the conductor casing. As the first length of pipe is completely lowered in, another length of pipe is attached to the end, thereby increasing the length of the drill “string”. When the drill string reaches the bottom of the conductor casing at a depth of 80 feet, the drilling begins. In order to drill downwards through soil and rock, the drill bit requires rotation and downward force, which is provided by the weight of thick-walled pipe on top of the drill bit. A single, 30-foot long drill pipe for a larger diameter drill bit weighs approximately three tons. As the drill bit drills deeper, more drill pipe is placed on top, thereby increasing the downward force; this is collectively known as the drill string. The drill bit turns clockwise as the weight of the drill pipe column forces it downward. Drilling fluid, called mud, is pumped down the inside of the hollow drill pipe, through a hole in the drill bit, and flushes the drilled rock cuttings away from the bit and up the space between the wall of the borehole and the outside of the drill pipe, which is referred to as the “annulus.” When the mud reaches the surface, it circulates to a mud tank where the rock cuttings are separated out of the fluid by using a shaker, and the clean mud is pumped back down the hole in a continuous circuit, constantly circulating the drilled rock cuttings up and away from the drill bit as it penetrates deeper into the earth. The cuttings are analyzed, stored in 20 cubic yard bins, and then hauled offsite. Initially, a large diameter bit is used to drill to a predetermined depth. When the specified depth Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources is reached, drilling is stopped, the drilling string is removed and a large diameter pipe (a casing string) is assembled in 40-foot lengths and lowered to the bottom of the well bore. Cement is then pumped down the inside of the casing, around the bottom of the hole, and up the annulus between the casing and the well bore. When the cement hardens, it ensures that the entire casing and well bore are encased in cement, protecting the fresh water aquifers and surrounding subsurface areas from the production fluids inside of the casing. See Figure 2.10 for a schematic of the well bore and casing. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.10 Typical Well Bore and Casing Source:Project Application Next, a piece of equipment known as a blowout preventer (BOP) is attached to the well head. The BOP is a safety system used during drilling operations in oil and gas fields to prevent the uncontrolled release of reservoir fluids and to immediately shut off the flow in the event that abnormal pressure is encountered in the well bore that cannot be controlled by the hydrostatic head of the drilling fluid when drilling resumes beneath the surface casing. Blow out prevention equipment shall conform to DOGGR’s publication M07 “Blowout Prevention in California, Equipment Selection and Testing 2006 edition. If the subsurface pressure begins to cause the well to flow, the BOP is activated, closing in the well and trapping the pressure until it can be bled off safely and drilling can continue. A BOP would be placed on each wellhead during the drilling and removed after the well is completed. A BOP utilizing Blind Shear Rams would be utilized. Blind Shear Rams are a type of BOP common in the offshore environment that allow for the shutting off of flow through the well even if drill pipe is in the wellbore. Pursuant to the requirements of the Code of Federal Regulation on Oil and Gas and Sulphur Operations in the Outer Continental Shelf(30 CFR part 250), the Applicant indicates that the BOP would be certified that the shear rams can actually shear the drill pipe prior to drilling. The surface casing serves three primary functions: Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources It isolates fresh water formations from contact with any fluids coming from deeper in the earth; It serves as a mounting place for the blowout preventer; and It serves as the support for the production casing that would be placed in the well if oil is found. Once the surface casing is cemented in, drilling operations resume with a smaller drill bit. This smaller hole is drilled to the total depth decided upon by the Applicant’s geologic and engineering staff. Usually, the only interruptions to drilling operations would be to remove the drill pipe (also known as tripping pipe) from the well to replace a dull drill bit, and then lowering the pipe back to the bottom of the well. In order to achieve the directional aspect of the drill hole, the well bore is bent. The act of “bending” a well out of the vertical axis typically begins after vertical drilling has progressed several hundred feet beneath the surface. Although the specifics of each well proposed for this Project have not been established, it is not uncommon to begin to deviate from vertical at a depth of about 600 feet and still reach a target formation located at a depth of 4,000 feet, but also almost 4,000 to 6,000 feet sideways from the surface spot location. This system would be used on virtually all of the wells drilled for the Proposed Oil Project. When the well reaches total depth (TD), drilling operations are halted and the drill pipe is removed from the well leaving mud in the hole to contain any potential production fluids located at the reservoir depth. A logging tool is then lowered into the hole to record petrophysical data of the formations through which the rig has drilled. If the well looks like it would produce oil, production casing is installed in a similar fashion to the installation of the surface casing. Production casing for the Proposed Oil Project is planned to be 7inches in diameter. Production casing would be cemented similarly to how the surface casing is cemented, as previously described. Once the cement has been allowed to fully harden, another electric logging tool, called a cement bond log, is lowered to the bottom of the well to evaluate the completeness and effectiveness of the cement on the outside of the production casing. If the cement is found to have defects, the casing can be perforated and cement forced into the well at a specific location or the casing can be removed and the well re-drilled. Devices are inserted to ensure any perforations are sealed. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources The well is then “completed”, which is a series of activities that allow for the production fluids to flow into the well bore inside the casing and to the surface. Table 2.5 shows a list of chemicals that would be used during drilling operations. The amounts listed are the estimated quantities consumed per well drilled. These materials are packaged by the manufacturer for shipping and would be delivered to the job site by conventional delivery or flatbed trucks. Drilling each well would require approximately 130,000 gallons (or 0.4 acre-feet) of water. The water would be reclaimed water provided by the West Basin Municipal Water District from an existing reclaimed water line serving the Greenbelt east of Valley Drive. The West Basin Municipal Water District has provided the Applicant with a “will serve” letter. The drilling process requires the use of drilling mud to circulate drilled rock cuttings out of the well hole, retain the integrity of the well hole, and control reservoir pressure. The drilling mud would be collected onsite in Baker tanks (enclosed tanks that are approximately 12 feet tall by 40 feet long and hold up to 500 barrels each). Although most of the mud would be reused on subsequent wells, some mud would be removed from the Project Site and disposed of each day by truck at an approved disposal site at Anterra’s Oxnard Licensed Class 2 Disposal Facility or a similar facility. In addition, all other waste generated by the test drilling would be transported by truck to the appropriate disposal site at Clean Harbors Buttonwillow Landfill, or a similar facility if closer to the Project Site. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.5 Phase 2 Drilling Chemicals Common/Trade Name Use Container Amount per Well Gel Wyoming Bentonite Used to enhance mud viscosity 100-pound sack 525 sacks DMA Sodium Polyacrylate Water absorbent mud additive 50-pound sack 82 sacks Benex Anionic Acrylamide Mud additive 2-pound sack 75 sacks GEOZan Xanthan Gum Mud viscosifier 25-pound sack 40 sacks Omniopol Sodium Polyacrylate Liquid Water absorbent mud additive - 380 gallons CFR Fatty Acid Liquid Mud additive to enhance lubricity - 600 gallons Bicarb Sodium Bicarbonate Mud additive for pH control 50-pound sack 40 sacks Citric Acid Mud additive for pH control 50-pound sack 11 sacks Walnut Hulls Filter medium, used to reduce torque and drag of drill pipe and for plugging of fractures and high porosity formations 50-pound sack 48 sacks Cement Bulk-Truck Used for well sealing - 3 bulk trucks Biotreat 8415 Treatment of water before injection into the oil reservoir Hydrochloric Acid 15%, used for acid washing during completion Bin varies Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Hydrofluoric Acid 3%, used for acidizing muds Bin varies Source: Project Application, Amendments and Appendices The Proposed Oil Project would comply with the 1993 CUP conditions of approval, proposed operational practices, and proposed design features. The noise reduction methods would include the following: An electric drill rig would be utilized, reducing the need for diesel engines; The drill rig would have no draw works or cables resulting in less noise; A 35-foot-high acoustical barrier wall (per Mitigation Measure NV-3a) would be erected around the perimeter of the Project Site during all drilling activities. The wall would have a sound transmission class (STC) rating of at least 32; The air inlets and vents of the hydraulic power unit would be fitted with silencers; An acoustical shroud would enclose three sides of the rig mast to reduce the top drive noise (if applicable); The mud pumps would be enclosed with acoustical barriers having a sound transmission class (STC) rating of at least 25; An 8-foot high acoustical barrier with an STC rating of at least 25 would be installed around the shaker tables; Drilling Quiet Mode Plan would be implemented at the drill site between 7:00 p.m. and 8:00 a.m., a plan which would provide for the following: disablement of all audible mobile equipment and truck backup alarms; minimization of pipe handling; cessation of cementing operations, maintenance, and tripping pipe; and limits within the delivery schedule; and An automated and remotely managed system to connect/disconnect pipe (Iron Roughneck) would be used, which would reduce pipe handling; No processing of gas would occur during Phase 2. The gas separated from the oil and water would be directed to a gas combustor (enclosed ground flare), where disposal of it would occur through burning. The Applicant indicates that low levels of potential “native” hydrogen sulfide (H2S), in the order of 0.0 to 6.0 parts per million (ppm), may be encountered in the gas produced from the Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources underlying oil reservoir. Because the produced fluids may contain some H2S, fixed H2S detection systems would be installed around the drilling site and continuous monitoring would be present during all drilling, workover, and well servicing operations. Sensors would be located in areas that are frequently used by personnel, selected drilling area locations, areas where H2S may accumulate, and any other areas determined by hazard analysis to pose a potential risk. Personnel would also carry personal H2S monitors attached to their clothing for immediate H2S detection during drilling. Figures 2.12 and 2.13 provide an outline of the City’s designated truck route for construction trucks through the cities of Hermosa Beach, Redondo Beach and Torrance. Phase 2 Testing and Operational Systems After the completion of the first test well and the water disposal/injection well, the extracted oil would go through production and testing. The temporary production equipment on the Project Site would be used to process the production fluid. The oil would be processed to a standard that would be suitable for sale. The produced water would be processed and re-injected back into the oil-producing reservoir below the oil water contact. Disposal of the gas produced during Phase 2 would occur through burning in the enclosed ground gas flare. Figure 2.11 shows the steps involved in processing the oil, water, and gas produced from the test wells in Phase 2. Processing of Production Fluids During Phase 2, the Proposed Oil Project is designed to handle up to 800 barrels of oil per day and up to 250,000 standard cubic feet of gas per day. After the oil is processed, it would be trucked from the Project Site to an offsite oil receiving facility at 2650 Lomita Boulevard in Torrance. The route used for crude haul trucks is detailed in Appendix A of the Final EIR. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.11 Phase 2 Process Flow Diagram Source: Applicant application The produced fluids would be sent from the wells to a three-phase separator, which would separate the fluid into gas, oil and water streams. The gas exits the top of the separator, the oil exits the middle, and the water exits the bottom of the separator. Each one of these fluids enters a specific system of treatment as follows. Oil Treatment System The produced oil would enter a series of stock tanks after leaving the three-phase separator. The stock tanks would be used if the oil needs to be further processed to remove excess water. The water removed from the oil and water mixture would be sent back to the three-phase separator through a drain system. Once the oil is processed to a standard suitable for sale, the oil from the stock tank would be loaded into a tanker truck and transported to the purchaser. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Gas Treatment System The produced gas would be sent directly to a compressor and then to the gas flare for combustion after leaving the three-phase separator. A vapor recovery system attached to the temporary Baker tanks would be utilized to capture vapors and to direct them to a vapor recovery compressor and to the gas system and flare. The vapor recovery, tank and flare system would be subject to Southern California Air Quality Management District (SCAQMD) permit requirements. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.12 Truck Routes from Highway 405 to Project Site Source:Project Application, Amendments and Appendices Figure 2.13 Truck Routes to Highway 405from theProject Site Source:Project Application, Amendments and Appendices The Proposed Project provides for the disposal of treated stormwater runoff and produced water from the drilling and production process back into the oil reservoir using water disposal/injection Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources wells. The injection of untreated water can result in the creation of H2S concentrations in the oil reservoir above preexisting levels (referred to as the “native” condition). Prior to the injection of produced water from the oil extraction process, or the injection of surface runoff from precipitation that collects on the Project Site, the water would be treated by a biocide to eliminate sulfate-reducing bacteria (SRB). Once wells begin production, the extracted water would be tested for SRBs to determine if treatment is needed. In addition, the surface runoff water and any other injected water, would be tested. SRBs are an assemblage of specialized bacteria that thrive in the absence of oxygen and obtain energy for growth by oxidation of organic nutrients, with sulfate being reduced to hydrogen sulfide (H2S). SRBs are treated by the use of a biocide and this treatment could be a batch or continuous treatment. There are numerous antibacterial agents available on the market that could be used for this specific treatment if it is determined to be needed. Facility Storm Drain System The Proposed Oil Project Site is designed to retain, process, and inject storm water within the perimeter fence or wall for a 100-year storm event. All rainwater falling on the site would be collected and pumped into the water processing system for disposal/injection into the oil reservoir. In addition, any spills on the site would also be contained, both within process system walls/berms around equipment and site walls/berms around the site. Process walls/berms would be designed to contain at least 110 percent of the largest vessel plus the precipitation generated by a 100-year storm event. Safety Systems Operators would be onsite 24 hours per day, seven days per week, to monitor the Proposed Oil Project’s production process during Phase 2. A fire protection system as required by Federal, State, and local codes, ordinances and regulations would be installed by the Applicant prior to the drilling and testing activities on the Project Site. The Fire Protection Plan for Phase 2 of the Proposed Oil Project would be provided to the City of Hermosa Beach Fire Department for review and approval prior to the initiation of Phase 2. The design and operation of the Proposed Oil Project would be required to meet provisions Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources within the California Fire Code (CFC) and standards of the National Fire Protection Association (NFPA), including the requirements for the storage of hazardous materials, the installation and use of fire protection systems and devices, and the implementation of safety measures for employees and emergency responders. Onsite personnel and a site security program, including a closed circuit television system, a gate access system, and an intrusion and motion detection system, would control all access to and from the Project Site during Phase 2. In addition, temporary lighting would be provided. The lighting would be shielded/hooded and directed downward, as is consistent with City requirements. All tanks would have containment equal or greater in capacity than at least 110 percent of the largest vessel plus the precipitation generated by a 100-year storm event. Water Treatment System The produced water would be pumped into a treatment system, including a gas flotation unit and a filter unit, to remove excess oil after leaving the three-phase separator. The primary objective of both units would be to clean the water of oil and solids such as sand. The water would then enter a water surge tank after leaving the filter unit and would be sent to the water disposal/injection pumps for disposal/injection into the oil-producing reservoir through the disposal/injection well. If determined to be needed, before it enters the water surge tank, the water would be injected with a biocide to eliminate any bacteria that may be in the produced water. Electrical Requirements Approximately 75 kilo-watt hours of electricity would be required to drill each well. Chemicals Project operations would require the use of chemicals. These chemicals would be documented in a required Hazardous Materials Business Plan. Typical chemicals utilized in the temporary production facility are shown in Table 2.6. Table 2.6 Phase 2 Testing Chemicals Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Common/Trade Name Use Maximum Quantity (Gallons) Emulsion Breaker/Phasetreat 6378 Help separate oil and water 60 Water Clarifier/Floctreat 7991 Water additive 40 Emulsion Breaker/Waxtreat 3610 Help separate oil and wax 50 Corrosion Inhibiter/Cor 7182 Additive to reduce corrosion 400 Surface Cleaner/4U General purpose cleaner 165 Scale Dissolver/Techni Solve 1780 General purpose scale remover 55 Scale Inhibitor/Techni Hib 7621 Additive to reduce scaling 120 Source: Project Application, Amendments and Appendices Noise Abatement The Proposed Project would be implemented in compliance with the 1993 Conditional Use Permit conditions of approval. In addition, the applicant proposes to incorporate several operational practices and design features intended to abate noise. The conditions of approval, operational practices and design features that would be incorporated into the production operations include the following: Heavy/large reciprocating equipment would be mounted on vibration isolators; Pipe tripping would be restricted to daylight hours only; Loudspeaker paging systems would be prohibited; Well workover rigs or any other workover-type rig (not the main drilling rig) that is used would be operated only between 8:00 am and 6:00 pm during daytime weekday hours only, excluding holidays, except in an emergency as defined in the Conditional Use Permit (CUP) and reported to the City in accordance with the notification requirement. The exhaust and intake of the diesel engine (if used on the workover rig) would be muffled to reduce noise to an acceptable limit. The operator would use whatever means necessary, including, but not limited to, enclosing the diesel engine and rig in acoustic blankets or housing; Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources All oil maintenance equipment, vehicles and non-electrical motors would be equipped with manufacturer approved mufflers or housed in a sound-proofing device; Noise monitoring would be conducted under the supervision of an independent certified acoustical engineer; Each well pump would produce a sound power level no greater than 83 dBA. This may be achieved by fitting sound attenuating enclosures that provide an insertion loss of at least 15 dB; The produced oil pumps, produced water pumps, water booster pumps and variable frequency drive electrical (VFD) cabinets would produce a sound power level no greater than 77 dBA; The water injection pumps would produce a sound power level no greater than 83 dBA. The vapor recovery compressors would produce a sound power level no greater than 83 dBA; and The cooler for the compressors would produce a sound power level no greater than 85 dBA. Decision not to Proceed -Abandonment If it is determined that the production of oil and gas on the Project Site would not be economically viable, the Applicant would remove the sound attenuation walls, the temporary production equipment, and the temporary construction trailer and abandon the three test wells and the water disposal/injection well in accordance with the requirements of DOGGR. The Project Site would be left as a graded site with site improvements including the retaining walls, the perimeter chain link fence, and the perimeter landscaping. As the temporary City Maintenance Yard would already be constructed under the Proposed Project, the current City Maintenance Yard Site would be empty and would be available for development within the M-1 Light Manufacturing zoned area of Hermosa Beach. The Project Site would then be available for City or other development proposals, or for the temporary City Maintenance Yard to be relocated back to this site. However, any future use would need to be consistent with the lease agreement with the Applicant. Current site contamination would remain as part of the abandonment process and would be removed in accordance with the requirements of any future site use. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.2.3 Phase 2 Drilling and Testing Schedule It is anticipated that Phase 2 would occur for approximately 12 months as indicated in the schedule provided in Table 2.7. The drill rig would operate continuously for 24 hours per day, seven days per week, until the appropriate depth and bottom-hole location for each well has been reached. It is estimated it would take 120 days for drilling activities, 24 hours a day, which is approximately 30 days per well for four wells. After the drilling of the three oil wells and one water disposal/injection well is complete, the drill rig would be removed from the Project Site. As each well is drilled, the produced fluids from that well would go thorough production and testing, as described above. 2.4.2.4 Phase 2 Drilling and Testing Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 2 are provided in detail in Appendix A of the Final EIR. A summary of the vehicle trips is shown in Table 2.8. Parking for the employees would be provided in an adjacent parking area as previously discussed for Phase 1. Since Phase 1 prepares the Project Site for Phase 2, the conceptual landscape plan and elevations provided above for Phase 1 would also be applicable to Phase 2. Table 2.7 Phase 2 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 thru 54 Install trailer and associated utilities Deliver and set up drill rig/equipment Install oil, water, and gas equipment Drill 3 test wells and water well Testing of wells Remove drill rig and equipment Source: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.8 Phase 2 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day* 2-axle trucks, Autos, Maximum RT/day Total, Maximum RT/day Install trailer and associated utilities 2 5 7 Deliver and set up drill rig/equipment 7 20 27 Install oil, water, and gas equipment 6 15 21 Drill 3 test wells and water well 9 10 19 Testing of wells 13 5 18 Remove drill rig and equipment 5 20 25 Greatest number of trips in one day 18 (during weeks 15, 17, 19, 21-24) 25 (during weeks 7- 12 ) 37 (during week 7) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum truck activity occurs during drilling and testing of wells. Maximum auto activity occurs during weeks 7-12 with the installation of oil, water and gas equipment and the drilling of wells. Maximum activity trucks and autos combined occurs during week 7. Testing of wells would involve crude transportation by truck, by way of an average of 7 trucks per day/5 days per week or up to 12 trucks in one day (round trip). Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix A. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources each week. Source: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 3 Final Design and Construction: 16 Months 2.4.3 Phase 3 Final Design and Construction If it is determined that the production of oil and gas on the Project Site would be economically viable, the Applicant would begin Phase 3 of the Proposed Oil Project. The purpose of Phase 3 would be to utilize the production information from Phase 2 to prepare the final design of the facility, prepare the onsite area for facility installation, install the permanent oil and gas production facilities, and construct offsite Pipelines. 2.4.3.1 Phase 3 Onsite Construction Phase 3 onsite activities would involve the following construction activities: Preparation of final engineering design; Removal of temporary production equipment; Removal of three remaining trees; Removal of 35-foot sound attenuation wall and perimeter fencing (per Mitigation Measure NV-3a); Installation of 24-foot sound attenuation wall (per Mitigation Measure NV-4a); Implementation of remedial action plan; Construction of remaining retaining walls and final grading; Completion of construction of well cellars; Construction of 35-foot block wall (per Mitigation Measure NV-6a); Removal of 24-foot sound attenuation wall (per Mitigation Measure NV-4a); Construction of small office building; Installation of permanent production equipment; Construction of final site improvements; Construction of final street improvements along Project frontage; Installation of final landscaping; Installation of 32-foot sound attenuation wall; Setting of conductor pipe; and Installation of lighting systems. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Each of these activities is detailed in the discussion that follows. A site plan for Phase 3 is shown in Figure 2.14. The conceptual grading plan, site plan, elevations (with the 32-foot sound attenuation wall), and conceptual landscape plan for the Proposed Oil Project at the completion of Phase 3 are shown in Appendix A of the Final EIR. Prepare Final Engineering Design The final design of the permanent oil and gas production facilities, to be implemented during the first few months of Phase 3, would be based on the oil and gas analysis and production results from Phase 2 activities. Final design would include the sizing and development of the exact specifications for the oil, gas, and water separation production equipment and the detailed engineering to prepare the required final construction drawings. Remove Temporary Production Equipment The temporary oil, water, and gas production equipment installed on the Project Site during Phase 2 would be removed. The wells drilled during Phase 2 would be shut in, and steel plating would be placed on top of the well cellar. Remove Remaining Trees The three remaining mature trees along the frontage of the Project Site along Valley Drive would be removed to allow for the construction of final site improvements including a perimeter wall and the installation of permanent landscaping. Remove 32-Foot Sound Attenuation Wall and Perimeter Fencing The 35-foot sound attenuation wall (per Mitigation Measure NV-6a) and the 6-foot perimeter chain link fencing would be removed from the Project Site. Install 16-Foot Sound Attenuation Wall Prior to the initiation of earthmoving activities, a temporary 24-foot sound attenuation wall (per Mitigation Measure NV-4a) would be brought to the Project Site. The sound walls would be designed to be movable and would be relocated within the Project Site as needed to attenuate noise and dust associated with the earthmoving activities needed for the implementation of the Remedial Action Plan and the final grading of the Project Site. The temporary sound walls Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources would be removed from the Project Site after the onsite earthmoving and grading activities are completed. Implementation of Remedial Action Plan The Remedial Action Plan would be implemented to address lead, barium, arsenic and total petroleum hydrocarbon (TPH) contaminated soil and groundwater within and beneath the former landfill area in the northeastern portion of the Project Site. It is anticipated that approximately 9,000 cubic yards of lead contaminated soil would be removed from the Project Site in accordance with the Remedial Action Plan and hauled to a Class 1 landfill at the Kettleman Hills Facility, approximately 190 miles from the Project Site. The TPH contaminated soil (approximately 4,500 cubic yards located deeper than 25 feet) would be treated onsite via vapor extraction. For a detailed discussion of the soil remediation that would occur prior to final grading of the Project Site, refer to the Remedial Action Plan provided in Appendix A of the Final EIR. Groundwater contamination attributed to historic use of the site has been documented (Brycon 2013). The RWQCB have indicated that the Regional Water Quality Control Board Site Cleanup Program reviewed the Report on Groundwater Assessment and indicated the matter would go on its large backlog of low priority cases. Construction of Remaining Retaining Walls and Final Grading Retaining walls (up to 6 feet high) would be constructed 10 feet back from the Valley Drive and 6th Street property lines, along the eastern boundary of the Project Site and along the eastern portion of the southern boundary of the Project Site (see Figure 2.14). In addition, retaining walls would be constructed within the Project Site for the containment area associated with the production equipment. After the completion of the retaining walls, the Project Site would be graded to allow for the installation of Project equipment and to allow for proper site drainage. The final grading of the Project Site would not require the import or export of fill material. Appendix A of the Final EIR provides the conceptual grading plan that indicates the location of the retaining wall locations and the final grading of the Project Site. Complete Construction of Well Cellars The cement well cellar constructed in Phase 2 would be extended, and a second well cellar would be constructed to allow for the drilling of the remaining wells in Phase 4. At completion, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources the well cellars would be approximately 8 feet wide by 120 feet long by 12 feet deep, with stairs at each end and covered with expanded metal grating. The well cellars would be equipped with storm water collection sumps and pumps to direct the storm water to the drain sump. From the drain sump, water would be directed into the processing system and injected, by the water disposal/injection wells drilled in Phase 4, into the oil-producing reservoir below the oil water contact. Figure 2.14 shows the location of the well cellars. Construction of 16-Foot Split-Face Block Wall A 16-foot split-face block wall would be constructed around the perimeter of the Project Site. The wall would be set back 10 feet from the Valley Drive and 6th Street property lines to allow for a landscape area. The wall would have a gated entrance off Valley Drive (set back 70 feet from the sidewalk) and a gated exit to 6th Street. The gates would be metal and motor operated. The appropriate signage would be provided, as is consistent with City requirements. Remove 16-Foot Sound Attenuation Wall After the completion of the Remedial Action Plan, final site grading, and construction of the well cellars and perimeter wall, the 16-foot temporary sound attenuation wall would be removed from the Project Site. Construction of Small Office Building A small office building approximately 650 square feet in size would be constructed in the northeast portion of the Project Site to house employee offices and control and monitoring equipment. The building would have a restroom and break room. The improvements extended to the Project Site in Phase 1 would provide for associated utilities, including water, sewer, natural gas, and telephone. The California Water Service Company and the City would provide water and sewer service, respectively. Southern California Gas Company (SCGC) would provide natural gas, and electricity would be provided by Southern California Edison (SCE). Verizon would provide telephone service. Office related solid waste services would be provided by Athens Services or a future city franchisee. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.14 Phase 3 Proposed Conceptual Site Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Installation of Permanent Production Equipment Permanent oil, water, and gas production equipment would be installed on the Project Site. The permanent oil production facilities would include tanks, vessels, piping, pumps, filters, and supporting metering equipment. These are listed in Table 2.9. A retaining wall around all of the vessels, tanks and other equipment containing oil would provide secondary containment. The design capacity of the secondary containment would exceed the fluid capacity of the largest tank by 110 percent plus the precipitation from a 100-year storm event. In Phase 4, the oil production facility would be used to separate gas, water, and solids from the oil, after which the oil would be stored in tanks prior to transport via pipeline from the Project Site. The separated water would be accumulated in tanks, filtered, and then injected into the oil- bearing reservoir by the four water disposal/injection wells. Gas from each well would be treated on the Project Site and then sold to the SCGC. The permanent gas production facilities would have compressors, vessels, a H2S and carbon dioxide (CO2) removal system, a moisture removal system, and an odorizing system. The use of this equipment is discussed in Section 2.4.4, Phase 4 Development and Operations. Table 2.9 Phase 3 and 4 Processing Equipment Listing Equipment Size and Number Oil Shipping Tanks 40 foot diameter by 16 feet high, 2900 BBLS, 2 tanks Water Clarifier 40 foot diameter by 16 feet high, 2900 BBLS, 1 tank Water Surge 30 foot diameter by 16 feet high, 1120 BBLS, 2 tanks Gas compressors 30 foot by 40 foot - 3 compressors DEA Skid (acid gas removal) 12 foot by 40 foot, 1 skid Low Temperature Separation (LTS) skid (propane refrigerant) 12 foot by 40 foot, 1 skid Flare/Gas Combustor 10 foot diameter by 22 feet high Vapor Recovery Compressor 17 foot by 28 foot IGF Skid 18 foot by 8 foot, 1 skid Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Filter Skid 25 foot by 18 foot, 1 skid Micro Turbines (five turbines) 200 kw each, 30 foot by 40 foot 3-Phase Separator 7 foot diameter by 35 feet long Lease Automatic Custody Transfer (LACT) Skid 5 foot by 12 foot Source: Project Application, Amendments and Appendices. BBLS=barrels (42 gallons), skid=a pre- fabricated unit. Construction of Final Site Improvements In addition to the areas where the concrete well cellar, the containment area, and the oil and gas production equipment have been constructed, the ground surface of the Project Site would be paved with concrete or asphaltic concrete and designed so that no fluids, including rain water up to a 100-year storm event, would leave the Project Site. Liquids, including rainwater, would be captured in the containment areas or in the well cellars, processed through the production facility, and injected into the oil-bearing reservoir via four water disposal/injection wells. Construction of Final Street Improvements Along Project Frontage The Proposed Oil Project would include the construction of street improvements along the frontage of the Project Site on 6th Street and Valley Drive. The improvements would include the installation of new curbs, gutters, and sidewalks. Installation of Final Landscaping Permanent landscaping would be provided along the perimeter of the Project. To the extent feasible, plant materials used in the temporary landscape plan installed in Phase 1 would be reused in the permanent landscaping. Reclaimed water supplied by the West Basin Municipal Water District would be used for irrigation. Appendix A provides the conceptual landscape plan and plant materials for the permanent landscaping that would be provided at the completion of Phase 3. Installation of 32-Foot Sound Attenuation Wall At the completion of the improvements in Phase 3, a 32-foot sound attenuation wall would be Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources erected inside the 16-foot block wall to provide for noise attenuation during Phase 4 drilling. Appendix A of the Final EIR provides the elevations of the Project Site, including the sound attenuation walls with the block walls, from Valley Drive and 6th Street at the completion of Phase 3. Set Conductor Pipe Prior to drilling in Phase 4, a dry-hole digger/auger would be used to set the conductor casing in the well cellars for all of the intended wells on the Project Site in a manner similar to the setting of the conductor pipe in Phase 2. A hole approximately 18 inches in diameter would be drilled to a depth of approximately 80 feet. A conductor pipe would be lowered to the bottom of the hole and cemented in place. This would form the seal of the near-surface formation and serve as a steel conduit to allow the drilling fluid used in the next stage of the well to be circulated to the surface without washing away the shallow near-surface dirt. All conductors necessary to develop the Proposed Oil Project would be set, and the dry hole digger/auger would be moved off the Project Site. Lighting Systems The permanent lighting for the Proposed Oil Project would be installed as a part of Phase 3. The lighting,as proposed in the Applicant’s Lighting Plan, would be designed to be directed downward and shielded in order to avoid obtrusive light spillage beyond the Project Site, reflective glare, and illumination of the nighttime sky. 2.4.3.2 Phase 3 Offsite Pipeline Construction During Phase 3, offsite pipelines for oil and gas would be constructed to transport the oil and gas to markets. Each route is discussed in the following subsections. Gas Pipeline Route As it leaves the Project Site, the offsite underground pipeline for the transport of gas would be constructed for a distance of 0.43 miles in the ROW of southbound Valley Drive (which is a one way street south of 2nd Street) in the City of Hermosa Beach to a tie-in to a SCG gas line in the Southern California Edison(SCE) Utility Corridor east of N. Francisca Avenue in the City of Redondo Beach. See Figure 2.15 for the proposed pipeline routes. Appendix A contains Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources detailed drawings of the route and valve box options. This portion of the gas pipeline would consist of two parallel pipelines, 4 inches in diameter, and located at a depth of approximately 3.5 to 4 feet below ground surface (bgs) within the road ROW until it ties into the SCG line at a proposed metering station immediately to the east of N. Francisca Avenue. The pipeline would be a loop system that allows for the gas to be returned to the Project Site for further treatment in the event that the produced gas does not meet SCG standards. The metering station site, which would be provided as a part of the Proposed Oil Project and is owned by SCG, would be approximately 40 by 60 feet in size and surrounded by an 8-foot high block wall. As shown in Figure 2.15, this first portion of the gas pipeline is bounded to the east by the Greenbelt and Ardmore Park and, further to the east, by Ardmore Avenue and residential development in the City of Hermosa Beach; to the west by the Beach Cities Self Storage facility, light manufacturing land uses, South Park, and residential development in the City of Hermosa Beach; and to the west in the City of Redondo Beach by facilities associated with the AES Power Plant. The gas line is designed for a maximum operating pressure of 465 pounds per square inch gauge (psig), but would typically operate at approximately 225 psig of pressure. Once the proposed gas pipeline from the Project Site ties into the SCG point of receipt at the proposed metering station, SCG would construct a six-inch gas pipeline that extends northeast for approximately 1.4 miles to connect to an existing SCG pipeline transmission facility (Line 1170) located on the south side of 190th Street near its intersection with Green Lane, between Flagler Lane and Beryl Street, in the City of Redondo Beach. After the first portion of the new six-inch gas pipeline leaves the proposed metering station and continues northeast, it would be located in an existing SCG easement within the SCE Utility Corridor between N. Francisca Avenue and Pacific Coast Highway. The new pipeline would exit the SCE Utility Corridor on the south side of the intersection of Herondo Street/Anita Street with Pacific Coast Highway, extend across Pacific Coast Highway, and continue northeast within the ROW of Anita Street/190th Street to its point of connection with the existing SCG pipeline transmission facility (Line 1170). If for some reason the first portion of the new pipeline could not be located within the existing SCG easement within the SCE Utility Corridor between N. Francisca Avenue and Pacific Coast Highway, it would leave the proposed metering station and continue for a short distance north within the ROW of N. Francisca Avenue and turn northeast at Herondo Street Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Pigging Passing a device through a pipeline that cleans or inspects the pipeline. A pig is usually a small rubber device slightly smaller in diameter than the pipeline. The pig is forced through it by product flow. Usually cylindrical or spherical, pigs sweep the line by scraping the sides of the pipeline and pushing debris ahead within the ROW until it reaches the intersection of Herondo Street/Anita Street with Pacific Coast Highway. At that point it would continue to the northeast as described previously. Although SCG would obtain the necessary permits and construct the new gas pipeline, the Applicant would pay for the associated costs of construction. The proposed gas line from the proposed metering station to the existing SCG pipeline transmission facility is bounded to the north by commercial land uses and residential development in the City of Redondo Beach and to the south by commercial land uses, residential development, and public facilities including Dominguez Park and Redondo Beach Dog Park in the City of Redondo Beach. Oil Pipeline Route The offsite underground pipeline for the transport of oil to an area refinery via a connection to a valve location in the City of Torrance would be constructed for a distance of approximately 3.55 miles in one of three potential pipeline scenarios that would follow a route through the Cities of Hermosa Beach and Redondo Beach and terminate in Torrance. The selection of the pipeline route would occur after Project approval. Appendix A of the Final EIR shows the pipeline route scenarios in detail. The pipeline would be 8 inches or less in diameter, located at a depth of approximately 3.5 to 4 feet bgs depending on the grade. At one of four potential valve box locations, the pipeline would tie-in to an existing pipeline that transports oil to a refinery. Appendix A of the Final EIR provides the proposed alignments of the three oil pipeline scenarios, the respective jurisdictional boundaries, and the adjacent land uses. Appendix A of the Final EIR provides the four valve box location options that the pipeline could tie into. More details are included in Appendix A. The oil line would be designed for a maximum operating pressure of approximately 500 psig, but would typically operate at approximately 100 to 200 psig of pressure. The pipeline would Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources include pigging stations to send and receive maintenance pigs into and from the pipelines to clean or inspect the pipelines during ongoing operations. This would occur for the lifetime of the Proposed Oil Project. Pigging refers to the practice of using pipeline inspection gauges or 'pigs' to perform various maintenance operations on a pipeline without stopping the flow of the product in the pipeline (refer to sidebar for more information). Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.15 Proposed Pipeline Routes Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source:Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources As shown in Figure 2.15, the oil pipeline would be constructed for a distance of 0.39 miles in the ROW of southbound Valley Drive (which is one-way starting at 2nd Street) in the City of Hermosa Beach to the corner of Valley Drive/N. Francisca Avenue and Herondo Street in the City of Redondo Beach. At this point, the oil pipeline would turn to the east along one of the following three pipeline scenarios (see Appendix A of the Final EIR): Scenario 1 consists of the construction of the oil pipeline towards the east within the ROW of Herondo Street, Anita Street, and 190th Street in the City of Redondo Beach to the intersection of 190th Street/Hawthorne Boulevard in the City of Torrance. At this point, Scenario 1 would continue to one of the four valve box options presented later in this discussion; Scenario 2 consists of the construction of the oil pipeline towards the east within the ROW of Herondo Street and Anita Street in the City of Redondo Beach and the ROW of 190th Street in the City of Torrance to the intersection of 190th Street/Hawthorne Boulevard. At this point, Scenario 2 would continue to one of the four valve box options presented later in this discussion; and Scenario 3 consists of the construction of the oil pipeline towards the east within the SCE Utility Corridor in the Cities of Redondo Beach and Torrance. When the oil pipeline meets Hawthorne Boulevard in the City of Torrance, Scenario 3 would continue to one of the four valve box options presented later in this discussion. The function of the valve box is to house the valve on the new oil pipeline to isolate it from the main oil transmission line and allow for inspection, operation, and maintenance of the valve and line to be performed as required by Federal and State regulations. The site requirement for a valve box for the Proposed Oil Project would be approximately six feet wide by eight feet long by six feet high. The valve box would be a precast concrete box with walls that are typically eight to ten inches thick. The valve box would be located below grade and designed to State of California Highway “traffic-rated” standards to allow for vehicle travel over it. A standard 36-inch or 42-inch manhole cover would provide access down into the valve box from grade. The manhole cover, the weight of which takes two people to remove and replace, would be bolted into place with special tools, providing security for the valve box. The oil pipeline would end at one of the following valve box locations: Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Valve Option 1 – For Pipeline Scenarios 1 and 2, the pipeline would continue from the Hawthorne Boulevard/190th Street intersection down 190th Street to the Exxon Mobil Refinery, where it would connect with a valve box location within the refinery site. For Pipeline Scenario 3, the pipeline would turn north in Hawthorne Boulevard and east in 190th Street to the refinery site; Valve Option 2 - For Pipeline Scenarios 1 and 2, the pipeline would turn south in Hawthorne Boulevard to the SCE Utility Corridor where it would turn east to the valve box location. For Pipeline Scenario 3, the pipeline would continue east in the SCE Utility Corridor across Hawthorne Boulevard to the valve box location; Valve Option 3 – For Pipeline Scenarios 1, 2, and 3, the pipeline would turn north in Hawthorne Boulevard to the valve box location adjacent to the Santa Fe Rail Road line; and Valve Option 4 - For Pipeline Scenarios 1, 2, and 3, the pipeline would turn north in Hawthorne Boulevard to the valve box location northeast of the intersection of 190th Street/Hawthorne Boulevard. The oil pipeline would be equipped with a supervisory control and data acquisition system (SCADA), which would monitor pipeline pressure and flow and, if a leak is suspected, would notify the operators. The percentage that is set in the SCADA system would notify the operator of potential oil leak. The detection timeframes set by the Applicant would vary depending on the crude oil flow rate in the pipeline. When the flow rate is at the maximum anticipated production rate of 8,000 barrels per day, flowing on a continuous basis, the flow rate would be 5.5 barrels per minute, and the following would apply: 15 minute time interval 5 % or 4.1 barrels 1 hour time interval 2 % or 6.7 barrels 24 hour time interval 1 % or 80 barrels If oil production is considerably less than the 8,000 barrels per day, the percentages would be adjusted upward to maintain essentially the same volume of oil previously noted based on the reduced flow rate in the pipe. Pipeline Construction Methods The gas and oil pipelines would be installed utilizing conventional trenching methods within Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources either one trench or two separate trenches within the roadway ROW. The construction and installation process would occur in stages consisting of approximately 237 feet in length each. Two stages would be constructed per day (a segment of 237 feet would be new construction, and another 237 feet would be the completion of the construction from the previous day). With the addition of approximately 126 feet for lane transitions and safety cones, a total of approximately 600 linear feet of roadway would be affected per day. A construction spread would be used to accomplish most aspects of the gas and oil pipeline construction along the alignments previously discussed. A construction spread is a clustering of construction equipment that moves along the pipeline route, sequentially removing asphalt roadway, trenching, laying pipe, filling, re-paving, and cleaning up. A pipeline construction spread consisting of several units would be organized to proceed in the following order: Pre-construction activities Asphalt removal and ditching or ROW grubbing and ditching Pipe handling/welding Pipe coating Pipe lowering, backfilling, and street repair Pipe testing and inspection Metering, pigging, odorant station installation If the oil pipeline can be laid within the SCE Utility Corridor (Scenario 3 pipeline route), a construction spread similar in arrangement, but smaller, would be used since the alignment would not have asphalt. In addition, if it is determined that existing sleeves under streets crossing the SCE Utility Easement exist, trenching across some streets may not need to occur. The following describes the activities that would occur for the construction of the pipelines and Figure 2.16 depicts a typical pipeline construction spread. Pre-Construction Activity The pipeline alignment ROW would include roadways and/or land in existing paved streets and other property, potentially including private property. Approval to construct and operate a pipeline would be obtained from or authorized by franchise agreements or permits from the agency with jurisdiction over the roadways and, if needed, from affected property owners. The construction requirements in the municipal codes and ordinances of the Cities of Hermosa Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Beach, Redondo Beach, and Torrance allow for the construction on major roadways during the following weekday hours: Hermosa Beach: 8:00 a.m. to 6:00 p.m. on weekdays and 9:00 a.m. to 5:00 p.m. on Saturday. No construction on Sundays and holidays; Redondo Beach: 9:00 a.m. to 3:00 p.m. on weekdays. No construction on weekends and holidays; and Torrance: 8:30 a.m. to 3:30 p.m. on weekdays. No construction on weekends and holidays. Figure 2.16 Typical Pipeline Construction Spread Note: All activities may not occur simultaneously. The pipeline construction activities would occur on weekdays between the hours of 9:00 a.m. and 3:00 p.m. (as per the CUP requirements), a time frame which is after morning peak commute hours (i.e., 7:00 a.m. to 9:00 a.m.) and before evening peak commute hours (i.e.: 4:00 p.m. to 6:00 p.m.) on the affected roadways. The Applicant proposes no construction activities during weekends and holidays. The Applicant would prepare a Construction Traffic Management Plan Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources (CTMP) that would include the following: Require the pipeline contractor(s) to obtain and follow Street Construction Permits in the affected Cities of Hermosa Beach, Redondo Beach, and Torrance, and Caltrans facilities (Pacific Coast Highway and Hawthorne Boulevard); Develop detour and traffic management plans consistent with the affected City’s Standard Roadway Plans (e.g., Torrance Street Standard T603), the California Manual of Uniform Traffic Control Devices (MUTCD), or the Work Area Traffic Control Handbook (WATCH); Revise pipeline construction segments to minimize access conflicts to adjacent residents and businesses; Develop truck route plans to reduce traffic on the street network during peak traffic commute hours; Avoid construction-related traffic to occur during peak travel periods; and Implementation of staggered construction worker shifts to minimize Project traffic during the peak hours. Underground Service Alert would notify service providers of construction to avoid conflicts with existing utilities and disruptions of service to utility customers. Because construction would occur in either paved streets or an existing utility corridor, extensive grading is not proposed. Asphalt Removal and Ditching Once traffic control measures are in place, trenching operations would begin. Typically, a five- foot deep and 18- to 24-inch wide ditch (single pipe) or 36-inch wide ditch (double pipes) would be excavated (varying depths, depending on the conditions encountered). Backhoes and track hoes would excavate the ditch. However, hand digging would be necessary to locate buried utilities, such as other pipelines, cables, water mains, and sewers. Fugitive dust emissions at the construction site during earthmoving operations would be controlled by water trucks equipped with fine-spray nozzles. Spoils from cuts, including cuts in the streets, would be saved for backfill or would be removed, and the ditch would be backfilled with slurry material as approved by the local jurisdictional agency. Effort would be made to minimize the amount of excess material. Material unsuitable for backfill and not economically useful for other purposes at the pipeline location would be disposed of at a landfill according to local jurisdictional guidelines. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources When used for backfill, the spoils from the trenches would be hauled to previously disturbed sites, as determined by the construction contractor. Pipe Handling Special trucks would transport the pipe in 40- to 80-foot lengths from the shipment point or storage yard to the pipeline installation point. Where sufficient room exists, trucks would carry the pipe along the roadway, and sideboom tractors would unload the joints of pipe from the stringing trucks and lay them end to end beside the ditch-line for future line-up and welding. A portable bending machine would bend the pipe to fit the ditch contour both vertically and horizontally. Construction ROW conditions could occasionally require pipe bends that are not able to be accomplished in the field. In these cases, manufactured or shop-made bends would be used, and pipe would be bent prior to the application of coating. While the line-up crew lays the pipe, line-up clamps would hold the pipe sections in position until approximately 50 percent of the first welding pass is completed. The welding crew would then apply the remaining weld passes to comply with API 1104, ASME B31.4, or ASME 31.8.2 All pipeline welds would be radiographically inspected. Pipe Coating Protecting the pipe from moisture and air helps prevent corrosion, thereby preventing cracks, breaks, and leaks in the pipe. The steel pipeline would be coated externally with fusion-bond epoxy or a corrosion resistant tape wrap system. Pipeline coating would be applied at the mill before delivery to the construction site. However, field coating would be necessary on all field weld joints to provide a continuous coating along the pipeline. After the pipe has been welded and radiographically inspected, one of the following would be applied: two-part epoxy, heat- shrink polyethylene sleeves or polyethylene tape and tape primer. Pipe Lowering, Backfilling, and Street Repair The pipe would be lifted and lowered into the ditch by one or two sideboom tractors spaced so that the weight of unsupported pipe would not cause mechanical damage. Cradles with rubber rollers or padded slings would allow the tractors to lower the pipe without damage as they travel 2 ASME - American Society of Mechanical Engineers; API – American Petroleum Institute Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources along the ditch line. Additional welds could be required in instances where the ditch line is obstructed by other utilities crossing the pipe ditch. These welds would typically be made in the ditch at the final elevation. In addition to normal welding and weld inspection, each weld would require pipe handling for line-up, cutting to exact length, coating, and backfilling. Backfill material in roadways would most likely be slurry material or could be ditch spoils, according to local agency requirements. Slurry material would be delivered by concrete trucks and consist of sand and cement. Concrete trucks would be trucks from local commercial sources. The area would be repaved if it was previously an existing paved street. In areas where the pipeline would be in previously unpaved areas, the backfill would include topsoil preserved from the excavation for re-vegetation where needed. At the time of backfilling, a colored warning tape would be buried approximately 12 to 18 inches above the pipeline to indicate the presence of a buried pipeline to third-party excavators. The backfilled earth would be compacted using a roller or hydraulic tamper. The trench would be filled with slurry where approved or required by local regulations. Steel plates would cover any open trench at the end of each workday. Pipe Testing and Inspection All field welding would be performed by qualified welders that meet the Applicant’s specifications and in accordance with all applicable laws, ordinances, regulations, and standards, including API 1104, the Standard for Welding Pipe Lines and Related Facilities, and the rules and regulations of the U.S. Department of Transportation found in the Code of Federal Regulations. All welds would be visually and radiographically inspected. All rejected welds would be repaired or replaced as necessary and radiographically inspected again. The radiographic reports and a record of the location of welds would be maintained for the life of the pipeline. In addition to standard testing of all pipe and fittings at the mill, hydrostatic testing would be performed after construction and prior to startup. Federal regulations mandate hydrostatic testing of new, cathodically protected pipelines prior to placing the line into operation. This test involves filling a test section of the pipeline with fresh water and increasing pressure to a predetermined level. Such tests are designed to prove that the pipe, fittings, and weld sections would maintain mechanical integrity under pressure without failure or leakage. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Cathodic protection controls the corrosion of a metal surface by making it work as a cathode of an electrochemical cell. This is achieved by placing the cell in contact with the metal surface and another more easily corroded metal to act as the anode of the electrochemical cell. The cathodic protection system consists of power sources called rectifiers, buried anodes (either sacrificial or impressed current), and test stations along the pipelines. Metering and Pigging Station Installation A gas-metering station would be required at the custody transfer location where the Applicant’s proposed gas pipeline interconnects with the existing SCG pipeline. The metering station would measure and record gas volumes, gas quality, and gas characteristics and provide custody transfer of the gas to SCG. The metering station would be located adjacent to N. Francisca Avenue, southeast of the intersection of Herondo Street and N. Francisca Avenue. SCG would then construct a new six-inch pipeline to a tie-in location with the existing SCG pipeline transmission facility (Line 1170) as previously discussed in Section 2.4.3.2, Phase 3 Offsite Pipeline Construction. In addition to the metering station, a pigging station would be installed at the metering station and Project Site for the gas pipeline, as required by SCG, and at the tie-in point for the oil pipeline. An odorant station would be installed at the Project Site consisting of a 500 gallon odorant tank that would be filled approximately annually. The gas would be odorized before it leaves the site. 2.4.3.3 Phase 3 Hazardous Materials Hazardous materials used as part of Phase 3 would be associated with construction activities, including diesel fuels, lubricating oils, pipe coatings, solvents, etc. No storage of hazardous materials beyond standard consumer quantities (a few gallons) is anticipated in this phase. 2.4.3.4 Phase 3 Schedule It is anticipated that Phase 3 would occur for a period of approximately 14 months as indicated in the schedule provided in Table 2.10. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.10 Phase 3 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28- 38 39- 53 54 55 56 57 58 59 60 61 62 63 64 Remove temporary equipment Remove trees along Valley Remove32-foot sound wall Implement RAP Construct retaining walls Final grading Construct well cellars Construct 16-foot block wall Remove 16-foot sound wall Construct/install facilities Construct street improvements Install landscaping Construct offsitepipelines Start-up of equipment Install 32-foot sound wall Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Set conductor Note: Days are weekdaysSource: Project Application, Amendments and Appendices Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Table 2.11 Phase 3 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day 2-axle Trucks, Autos, Maximum RT/day Total, Maximum RT/day Remove production equipment 6 15 21 Remove trees along Valley Drive 2 4 6 Install 16-foot noise wall 6 8 14 Implement Remedial Action Plan 18 8 28 Construct retaining walls 3 20 24 Final grading (balanced) 4 6 10 Construct well cellars 9 15 25 Construct 16-foot perimeter wall 5 20 25 Remove 16-foot noise wall 5 5 10 Construct/install onsite facilities 18 40 47 Construct street improvements 11 9 20 Install landscaping 1 7 7 Construct pipeline 18 22 54 Start-up production equipment 0 7 7 Install 32-foot sound wall 6 9 16 Set conductor 2 5 7 Greatest number of trips in one day 18 (during weeks 6-13, 23, 54) 62 (during weeks 39-53) 78 (during week 39-53) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips (RT). Maximum truck activity occurs during week 6-13 with RAP activities, week23 with construct well cellars, Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources PHASE 4 Development and Operations: 2.5 years drilling program. Operations - ongoing perimeter wall and onsite facilities and week 54 with construction of onsite facilities, pipeline construction and conductor setting. However, the majority of the pipeline construction traffic would occur away from the Project Site except during the installation of the sections of the pipeline located very close to the Project facility. Maximum auto activity occurs during weeks 39-53 with the facilities construction. Maximum activity trucks and autos combined occurs during weeks 39-53, however, the majority of the vehicles for the pipeline construction would be parked at the contractor’s facilities or near the pipeline alignment. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simply addition of the two. See appendix. See Appendix A for a detailed breakdown of vehicles, employees, trucks and construction equipment for each week. Source: Project Application, Amendments and Appendices 2.4.3.5 Phase 3 Personnel and Equipment Requirements The vehicles, equipment, and employees estimated for Phase 3 are provided in Table 2.11. The vehicle trips required to transport employees and equipment for Phase 2 are also provided in Table 2.11. 2.4.4 Phase 4 Development and Operations The purpose of Phase 4 would be to maximize oil and gas recovery from the reservoirs by drilling additional wells and operating the permanent facility. To accomplish this, Phase 4 would involve the drilling of wells; the operation of the permanent oil production equipment; the transport of the oil and gas by pipeline to their respective destinations; and the ongoing Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources maintenance of the Proposed Oil Project. The Proposed Oil Project would be designed for a maximum capacity of 8,000 barrels of oil per day and 2.5 million cubic feet of gas per day. Figure 2.17 provides the conceptual site plan for Phase 4. Elevations and the conceptual landscape plan for the Proposed Oil Project during Phase 4 are included in Appendix A of the Final EIR. 2.4.4.1 Phase 4 Drilling Phase 4 drilling would involve delivery and setup of the drilling rig and the drilling of the remaining wells. Delivery and Set Up of Drill Rig The drilling rig and its associated equipment would be brought to the Project Site by trucks with trailers permitted by the City and the California Highway Patrol. The approximately 87-foot high drill rig would be powered by electricity. A large crane with a 150-foot boom would be used to erect the drill rig. The crane would be removed from the Project Site after the drill rig and supporting equipment have been set in place. Support equipment for the drill rig would include pipe racks, mud and cutting system, pumps, hydraulic equipment, and an accumulator. In the event of a loss of power from SCE, the generator, which would be a non-road portable diesel-fuel generators certified by the California Air Resources Board (CARB), would provide power for the safe shutdown of the drilling operation. The drill rig and its associated equipment would require the same setup as described under Section 2.4.2, Phase 2 Drilling and Testing. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources 2.4.5 Drill Remaining Wells The drilling of the remaining oil wells and water disposal/injection wells, up to a total of 30 oil wells and four water disposal/injection wells, would involve the same activities as described for Phase 2. As previously discussed regarding Phase 2, once the drilling of a well is complete, the cemented casing would be run from the surface to the bottom of the wellbore where the well penetrates the oil-producing reservoir. The well would be plumbed into the temporary production equipment and pump system that had been installed. The pump system, installed below ground, would bring the oil, gas, and water to the surface for processing. In addition, up to three additional water disposal/injection wells (in addition to the single water disposal/injection well drilled during Phase 2) would be drilled to allow for the injection of processed produced water back into the oil-producing reservoir and at below formation fracture pressure. The drill rig would operate continuously for 24 hours per day, seven days per week, until the appropriate depth and bottom-hole location for each well has been reached. It is estimated it would take approximately 30 days to drill each well, including the time for placing the drilling rig in position and installing rigging. After the drilling of the wells is complete, the drill rig would be removed from the Project Site. Including set up for each well and removal from the Project Site, the total drilling time for Phase 4 would be about 30 months (2 ½ years). Drilling each well would require approximately 130,000 gallons (or 0.4 acre-feet) of water. The water would be reclaimed water provided by the West Basin Municipal Water District conveyed via extension of an existing waterline serving the Greenbelt east of Valley Drive. The West Basin Municipal Water District has provided the Applicant with a “will serve” letter. The drilling process requires the use of drilling mud to circulate drilled rock cuttings out of the well hole, retain the integrity of the well hole, and control reservoir pressure. The drilling mud would be collected onsite in tanks. Although most of the mud would be reused on subsequent wells, some mud would be removed from the Project Site and disposed at Anterra’s Oxnard Licensed Class 2 Disposal Facility or a similar facility. All other waste generated by the test drilling would be transported by truck to Clean Harbors Buttonwillow Landfill or a similar facility closer to the Project Site. Noise abatement would be incorporated into the drilling process in the same manner as described for Phase 2, including a 32-foot high sound attenuation wall. After the drilling of the wells is Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources completed, the 32-foot sound attenuation wall would be removed from the Project Site. Re-Drilling of Wells Re-drilling of a well occurs if production from a well declines substantially or if problems exist with the well, affecting the well’s efficiency or viability. The same activities would be required for re-drills as for initial drilling, except that conductor piping would not have to be installed again, as the same conductor piping would be used for the re-drill. Although the Applicant does not expect the need for the re-drilling of wells, the activity may be required under extraordinary circumstances. Depending on the circumstances, a workover rig might be able to be used to complete a re-drill. However, for the purpose of providing a worst- case analysis, the Applicant estimates that up to 30 re-drills could occur over the life of the Proposed Oil Project, with up to five re-drills occurring during any given year. In the event that a re-drill would occur, noise attenuation design features, including the use of a 32-foot sound attenuation wall and acoustical covers, would be implemented on the Project Site. Re-drills would involve the same activities and equipment as the drilling proposed for Phase 2 and 4. 2.4.5.1 Phase 4 Processing and Operations During the drilling of the remaining oil wells and water disposal/injection wells, the production of the extracted oil would occur. Figure 2.18 shows the steps involved in processing the oil, water, and gas produced from the wells during Phase 4. The permanent production equipment on the Project Site would be used to process the oil and gas to a standard that would be suitable for sale. The produced water would be processed and injected into the oil-producing reservoir. The gas produced would be processed and sold to the gas company. The oil and gas produced would be transported offsite via pipelines constructed during Phase 3. Figure 2.18 Phase 4 Process Flow Diagram Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Applicant application Noise abatement would be incorporated into operational practices and permanent production equipment. The anticipated personnel on the Project Site would be four personnel for a 12-hour daytime shift, two personnel for an 8-hourgraveyard shift, and two personnel for an 8-hour swing shift. Therefore, personnel would be present 24 hours per day on the Project Site. During the ongoing operation of the Proposed Oil Project, active wells would require periodic routine service. These activities could include the replacement of down-hole pumps, piping, and cleaning. These maintenance activities would typically be accomplished by utilizing a service rig, or “workover” rig, approximately 110 feet high. The workover rig would be operated on the Project Site a maximum of 90 days per year. The workover rig would be operated between the hours of 8:00 a.m. and 6:00 p.m. on weekdays only (excluding holidays). Only a single workover rig would be onsite at one time. In addition, there would be an occasional need for other services such as facilities repair and Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources solid and liquid waste pick-up. Preventative maintenance would be performed on a routine basis to ensure the integrity of the operating equipment. The pipelines would be periodically inspected to ensure their continued integrity. The permanent production facility would be utilized to separate and treat produced oil, gas and water. The separation and treatment of these fluids allows for the oil and gas to be sold and subsequently transported via pipeline and for the water to be injected into the oil-producing reservoir below the oil water contact line. Figure 2.18 provides a simplified flow diagram of the flow of fluids through the permanent production facility. The following describes the steps of production and operational characteristics in Phase 4. Fluids Piped from the Wellhead to the Production Facility After a well has been drilled and completed (final down-hole equipment installed), the extracted fluids would be piped to the permanent production facility on site. The combination of fluids (i.e., oil, gas, and water mixture) is referred to as an emulsion. This emulsion would be sent via pipes to a production header, where it is commingled with the emulsion from all the wells in a gross line before entering a three-phase separator. There is also a test header that allows the diversion of emulsions from a single well through a well test station before the three-phase separator. The well test station allows for the testing of each well quality and flow characteristics. After the emulsion passes through the well test station, it would be directed back to the gross line where it would be commingled back with the emulsion from the production header and then enter the three-phase separator. The three-phase separator separates the oil, gas, and water. The gas exits the top, the oil exits the middle, and the water exits the bottom of the separator. Each of these fluids enters a specific system of treatment, as is discussed in the following subsections. Oil Treatment System After the produced oil leaves the three-phase separator, it would enter a stock tank, where it may need to be heated depending on the quality of the crude oil. This heating would allow excess water to drop from the oil. Heating, if necessary, would be provided by the microturbine exhaust waste heat recovery system. From the stock tank, the oil would be measured using a Lease Automated Custody Transfer Unit (LACT) and transported via pipeline to the purchaser. Any water that drops out of the oil would be routed to the water treatment system. Vapors would be Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources directed to the gas processing systems through the vapor recovery unit. Gas Treatment System During this phase, gas would be treated, sold, and subsequently transported via pipeline to the SCGC. Treatment of the gas would be required to meet gas pipeline specifications. After the gas leaves the three-phase separator, it would be sent to the first stage compressor. The first stage compressor would increase the pressure of the gas for treatment. The first stage of gas treatment is removal of H2S from the gas utilizing triazine using the SulfaScrub system. SulfaScrub is a non-regenerative batch process that requires replacement of the SulfaScrub materials periodically. The SulfaScrub process is a “scavenging” process, meaning it is used to remove H2S in process gas at low concentrations (up to concentrations of approximately 200 ppm). After leaving the SulfaScrub system, the gas would be sent through the amine system. This amine system removes CO2 from the gas. After leaving the amine system, the gas would pass through the second stage compressor, where pressure is increased prior to the gas’ entry into the low temperature separation system. The low temperature separation system removes any remaining moisture (mostly water) and gas liquids from the gas prior to sale. Propane would be utilized as a refrigerant in the low temperature separation system. Before the gas leaves the Project Site, it would be odorized using an odorizing substance (mercaptan or equivalent) as required by law. The gas would then be sent via pipeline through a metering station to a SCG pipeline constructed in Phase 3 located near the corner of Herondo Avenue and N. Francisca Drive to the south of the Project Site. Water Treatment System After the water leaves the three-phase separator, it would be sent to the clarifier tank. This tank would allow solids in the water to drop out. From the clarifier tank, the water would then enter the induced gas flotation unit for the removal of suspended matter, such as oil or solids. The induced gas flotation unit removes oil by injecting gas bubbles into the water. The bubbles adhere to the suspended matter, causing the suspended matter to float to the surface and form a froth layer, which is then removed by a skimmer. From the induced gas flotation unit, the water would then pass through a filter unit. The filter Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources unit would be used to clean the water of any remaining oil and solids, such as sand. After the water has left the filter unit, it would enter the water surge tanks for storage before disposal/injection. From the water surge tank, the water would then flow through pumps and be sent to the disposal/injection wells for injection into the oil producing reservoir. Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Figure 2.17 Phase 4 Site Plan with Drilling Rig Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Section 2: Project Description Exhibit B Development Agreement between City of Hermosa Beach and E&B Natural Resources Source: Project Application Section 2: Project Description Exhibit B This page intentionally left blank. Section 2: Project Description Exhibit B Vapor Recovery System Gas from all tanks and vessels not part of the gas processing system (the oil and water processing tanks and vessels), as well as pressure relief valves, would be gathered through pipes into a closed-system and directed to a vapor recovery compressor unit. The vapor recovery compressor would compress the gas and then add it to the gas in the gas processing system (from the three- phase separator, etc), where it would be processed and sent via pipeline to the metering station and the SCG system. Process Drain System All equipment would be connected to a drain system that would be directed to a drain tank. Liquids from the drain tank would be sent back to the three-phase separator for reprocessing. Solids from the drain system may periodically be removed to an offsite approved disposal facility. Electrical Generation System The facility would utilize a Microturbine system, which would consist of five 200 kw Capstone turbines configured as a single 1,000 kw package. Anticipated NOx emissions would be 4 ppm. Gas produced on the Project Site would be utilized as fuel for the turbines. Facility Storm Drainage System The Proposed Oil Project Site is designed to retain, process, and inject storm water within the perimeter fence or wall for a 100-year storm event. All rainwater falling on the site would be collected and pumped into the water processing system for injection into the oil reservoir. In addition, any spills on the site would also be contained, both within process system walls/berms around equipment and site walls/berms around the Project Site. Process walls/berms would be designed to contain at least 110 percent of the largest vessel plus the precipitation from a 100- year storm event. Waste Waste would be generated as part of the facility operations and the production process. Regular waste would include typical municipal trash such as paper, trash bags, food, and cups. Process waste would include generic oil field waste such as sandy oil (from the tank bottoms), spent H2S scavenger, spent filters, oily cloths (i.e., rags), gloves and Tyvek® suits. Intermittently the facility could generate hazardous waste. These wastes could include empty drums, rinse water, painting supplies, spilled chemicals, spent media, and hydraulic fluids. The Applicant indicates Section 2: Project Description Exhibit B that the Project Site would have an Environmental Protection Agency (EPA) and Department of Toxic Substances Control(DTSC) Identification Number. Phase 4 Safety and Security Systems The Fire Protection Plan for Phase 4 would be provided by the Applicant for review and approval by the City of Hermosa Beach Fire Department (Fire Department) and incorporated into the Phase 4 Site Safety Plan. Emergency access would be incorporated into the design of the Proposed Oil Project. An additional fire hydrant would be provided adjacent to the Project Site as a component of the Proposed Oil Project. The location of the hydrant would be determined by the Fire Department, and installation would occur as a part of the construction completed in Phase 3. A fire suppression system for the ongoing operation of the Proposed Oil Project in Phase 4 would be installed during Phase 3. The fire suppression systems would include a foam injection system and automated detection and annunciation systems. Automated alarm systems would be installed for the detection of chemicals and fire hazards to notify onsite personnel that an emergency situation is potentially occurring. If it is determined that a chemical fire or fire emergency exists, the onsite operator would activate the emergency shutdown system and notify the Fire Department. The Fire Department and their allied agencies would respond as indicated in their mutual and automatic aid agreement contracts. The onsite personnel for the Proposed Oil Projectwould be trained for initial spill response and activation of emergency systems at the site as per HAZWOPER requirements, but would not be trained for fire fighting and would rely on the Fire Department for response activities. The fire detection system would consist of thermal fire detection and optical surveillance systems that would monitor potential fire zones and activate warning indicators. The Applicant proposes Subsidence and Induced Seismicity Monitoring Programs to detect subsidence as a result of drilling activities. This would ensure that subsidence would not be tolerated to the degree that it could endanger the facility, offsite structures, and the shoreline. Also, an Induced Seismicity Monitoring Program would be designed to detect seismic activity that might result from drilling activities. The security system for the ongoing operation of the Proposed Oil Project in Phase 4 would be installed and initiated during Phase 3. Security on the Project Site would be provided by onsite personnel and a site security program that would include a Closed Circuit Television System, a gate access system, and an intrusion and motion detection system. The security system would Section 2: Project Description Exhibit B control all access to and from the Project Site. During the final design of the Proposed Project and submission of plans to the appropriate agencies for permits, the following plans and programs would be developed by the Applicant as part of the facility drilling and operations phases (Phase 2 and Phase 4 activities): Odor Minimization Plan; Air Monitoring Plan; Fire Protection Plan; Safety and Environmental Management Program; Mechanical Integrity Program; Hazardous Materials Business Plan; Subsidence and Induced Seismicity Monitoring Programs; Noise Monitoring Plan; Quiet Mode Drilling Plan; and Various plans related to grading, equipment design, electrical design, landscaping, etc. Safety devices would be installed within the piping, vessels, and tanks in the processing system. Safety devices would provide early warning, corrective action, or shut down of a specific segment of the system or the entire facility, if necessary. A number of safety devices are required or recommended by codes, standards and regulations, including: High level warning systems; High pressure warning systems; Automatic shutdown valves; Vessel and pipe design requirements; Vapor recovery and component leakage limits; and Fuel contaminant limits. Detailed piping and instrument diagrams would be provided by the Applicant during the detailed permitting stages, and reviews of the final design would be undertaken at that time. Specific measures to reduce the risk of hazardous material releases are addressed in Section 4.8, Safety, Risk of Upset, and Hazards. Phase 4 Hazardous Materials The operation would require the use of hazardous chemicals. The chemicals would be stored Section 2: Project Description Exhibit B onsite with secondary containment. The chemicals would be documented in a required Hazardous Materials Business Plan and submitted to the Los Angeles County Fire Department as the Certified Unified Program Agency (CUPA) and the Hermosa beach Fire Department. Typical chemicals utilized in the permanent production facility and the maximum quantities that would be onsite at any time are listed in Table 2.12. Hydrogen Sulfide The Applicant indicates that low levels of potential “native” H2S, in the order of 0.0 to 6.0 parts per million (ppm), may be encountered in the gas produced from the underlying oil reservoir. In order to have the capability to treat higher levels, the Proposed Oil Project has been planned to treat H2S levels of 15 ppm and has a maximum design capacity to treat H2S levels of up to 100 ppm. After treatment with the SulfaScrub system, the H2S levels of the gas would be reduced to less than 4.0 ppm. SCG’s specifications limit the H2S concentrations in gas delivered to the meter from a producer to less than 4.0 ppm. The Proposed Project provides for the disposal/injection of treated produced water from the drilling and production process back into the oil reservoir using water disposal/injection wells. Untreated produced water can result in the creation of H2S concentrations in the reservoir above the existing levels in the oil reservoir (referred to as the “native” condition). Prior to the disposal/injection of produced water from the oil extraction process, surface runoff from precipitation that collects on the Project Site, or any additional injected water, the water would be treated by a biocide to eliminate sulfate-reducing bacteria (SRB). Once wells begin production, the extracted water would be tested for SRBs to determine if treatment is needed. In addition, the surface runoff and additional water would be tested. SRBs are an assemblage of specialized bacteria that thrive in the absence of oxygen and obtain energy for growth by oxidation of organic nutrients, with sulfate being reduced to hydrogen sulfide (H2S). SRBs are treated by the use of a biocide and this treatment could be a batch or continuous treatment. There are numerous antibacterial agents available on the market that could be used for this specific treatment if it is determined to be needed. Table 2.12 Phase 4 Drilling Chemicals Common/Trade Name Use Maximum Quantity Onsite (Gallons) Odorant/Mercaptan Odorize the sales gas 500 H2S Scavenger/Pertrosweet Gas treatment for H2S 9,000 Section 2: Project Description Exhibit B Table 2.12 Phase 4 Drilling Chemicals Common/Trade Name Use Maximum Quantity Onsite (Gallons) HSE700 Emulsion Breaker/Phasetreat 6378 Help separate oil and water 60 Water Clarifier/Floctreat 7991 Water additive 40 Emulsion Breaker/Waxtreat 3610 Help separate oil and wax 50 Corrosion Inhibiter Cor7182 Additive to reduce corrosion 400 Surface Cleaner/4U General purpose cleaner 165 Scale Dissolver/Techni Solve 1780 General purpose scale remover 55 Scale Inhibitor/Techni Hib 7621 Additive to reduce scaling 120 Glycol/TEG Gas treatment for water removal 55 Amine/DEA Gas Treatment for H2S removal 110 Methanol For oil treatment 55 Biotreat 8415 Water treatment prior tore- injection 55 Hydrochloric Acid 15%, used for acid washing during completion Varies Hydrofluoric Acid 3%, used for acidizing muds Varies Note: Project Application, Amendments and Appendices 2.4.5.2 Phase 4 Schedule It is anticipated that Phase 4 would occur for a period of approximately 30 to 35 years, as indicated in the schedule provided in Table 2.13. The drilling of the remaining wells would occur during the first 30 months of Phase 4, with periodic re-drills thereafter for the life of the project (averaging 30 days per year with a maximum of 150 days in one single year). The permanent production equipment would operate 24 hours a day, seven days per week. The Section 2: Project Description Exhibit B Project Site would be staffed 24 hours a day, seven days per week. Section 2: Project Description Exhibit B Table 2.13 Phase 4 Project Schedule Activity Schedule (Weeks) 1 2 3 4 5 through 131 132 133 134 135 Life of Project Deliver and Set up drill rig Drill remaining 30 wells Remove drill rig Remove 32-foot noise wall Facility operations and maintenance Continuous Re-drills Avg. 30 days/yr Max 150 days/yr* Well workovers Max 90 days per year Source: Project Application, Amendments and Appendices. To re-drill a well, a drilling rig similar to the one initiallyused to drill the wells would be used with the same setup, drilling and removal procedures. Workovers would use an 110-foot tall truck mounted drilling rig and would be conducted a maximum of 90 days per year. * This is the maximum number of days per year proposed by the Applicant. The 150 days per year is predicted to occur once every 5 years. Most likely re-drill activity would be lower. 2.4.5.3 Phase 4 Vehicle Requirements The number of vehicles estimated by the Applicant to be necessary for Phase 4 operations are provided in Table 2.14. During drilling, parking for Project employees would be provided as previously described under Section 2.4.1.1, Phase 1 Construction Activities, under the subsection Clearance of the Project Site. Parking for Project employees would be provided on the Project Site after the drilling of all the wells is completed and the drill rig has been removed from the Project Site. 2.4.6 Parking Requirements The Proposed Project construction and operation activities would result in increased parking demand. The elimination of existing parking would also make necessary the replacement of spaces lost. Parking requirements addressed in this FEIR include the following: Temporary parking for a maximum of 40 Project employee vehicles, varying between Section 2: Project Description Exhibit B approximately 20 and 40 employee vehicles during construction and/or drilling activities in Phases 1-4, excluding ongoing production in Phase 4; Long-term parking for four Project employees during the ongoing operation of the Proposed Project and four additional spaces for maintenance workers in Phase 4; Exhibit B Replacement of 15 parking spaces currently located at the City Maintenance Yard that supply free remote public parking on weekends under the City’s Preferential Parking Program approved by the Coastal Commission. These spaces are used by: Maintenance Yard employees during working hours (i.e., Monday through Thursday from 7:00 a.m. to 6:00 p.m. excluding holidays) and by the public at other times; and Replacement of two on-street public parking spaces that would be eliminated by improvements to the southwest corner of 6th Street and Valley Drive. These spaces are not part of the City’s Preferential Parking Program. Table 2.14 Phase 4 Vehicle Trip Summary Activity 3-axle Trucks, Maximum RT/day 2-axle Trucks, Autos, Maximum RT/day Total, Maximum RT/day Deliver and Set up drill rig 6 20 26 Drill remaining 30 wells 12 11 23 Remove drill rig 5 20 25 Remove 32-foot sound wall 4 8 12 Facility operations and maintenance 5 13 18 Well workovers/Major Maintenance 4 14 18 Greatest number of trips in one day 17 (during drilling ) 34 (during drilling) 44 (during drilling) Notes: * According to the 1993 CUP, which is valid pursuant to the Settlement Agreement, the number of truck trips shall be limited to a maximum of 18 rounds trips per day, except in an emergency. Trucks are 3+ axle or greater or trucks with trailers. Autos are automobiles or pickups/trucks with 2 axles. Trips are round trips. Maximum activity occurs during drilling of wells with facility operations and maintenance. Truck maximum and auto/PU maximum do not necessarily occur on the same day, so the total maximum is not necessarily a simple addition of the two. See Appendix A. Re-drilling would produce the same level of traffic as traffic produced during drilling activities. Exhibit B See Appendix A for details regarding vehicles, employees, trucks and construction equipment necessary for Project operations each week. Source: Project Application, Amendments and Appendices In order to comply with the City’s Preferential Parking Program and Coastal Development Permit requirements and be consistent with the City’s Coastal Land Use Plan (titled Local Coastal Plan) policies,, 17 public parking spaces would have to be generated under the Proposed Oil Project to replace the 15 parking spaces removed at the current City Maintenance Yard and the 2 on-street public parking spaces removed from 6th Street, Table 2.15 provides the Applicant’s assessment of parking demand for each phase of the Proposed Oil Project and the Applicant’s proposal for the development of the required parking as a component of the Proposed Oil Project. As indicated in Table 2.15, Phases 1, 2, and 3 and the drilling portion of Phase 4 would require temporary offsite parking. Exhibit B Table 2.15 Proposed Oil Project Parking Requirements Phase and Peak Activities Peak Number of Employees Number of Offsite Parking Spaces Needed Comments Phase 1: construct fence, wells cellar and install electrical service 27 20 Some employees would park onsite and others would use temporary parking lot. Phase 2: Install equipment and drill test wells. 22 12 Two 5 person shifts for drilling, some carpooling assumed. Phase 3: Construct wall, remove soundwall, construct onsite facilities 30-60 40 Peak employees occurs for constructing onsite facilities. Assumes some carpooling. Phase 4: Drilling and Operations 10 4 5 persons per shift with 2 shifts per day. Carpooling is assumed. Phase 4: Operations Only 2-4 0 No offsite parking needed. Source: Applicant submittals January 2014 The following information summarizes E&B’s proposal in the Project Application to meet parking demands. Cypress Parking Lot: Parking for 20 employees during temporary construction and drilling activities during Phases 1, 2, 3, and the drilling portion of Phase 4 would be provided in an offsite temporary parking lot to be developed at 636 Cypress Avenue adjacent to the western Project boundary (referred to as the temporary parking lot). The Applicant states it has entered into an agreement with the current owner of the subject property at 636 Cypress Avenue (Assessor Parcel No. 4187-031-22) for this use. Access to the parcel is provided from Cypress Avenue. While adjoining the Project Site at 555 6th Street, the temporary parking lot will not be accessible from the Project Site due to an elevation difference between the properties and the need for secured points of entry onto the Project Site. Exhibit B The 6,000-square foot parcel at 636 Cypress Avenue is a relatively level property. Itis currently developed with a single-story building that occupies approximately 75 percent of the parcel and a parking lot with approximately 6 parking spaces. The development of the parcel would comply with all City requirements. Development would require demolition of the existing building, removal of the current asphalt parking area, and minimal grading. The Cypress Parking Lot would be completed before the commencement of construction activities to occur under Phase 1 Site Preparation of the Proposed Project. Improvements that would be made to the new 60-foot by 100-foot parking lot with 20 parking spaces would include drainage, landscaping with irrigation, lighting, a trash container, and other elements to comply with the City of Hermosa Beach Municipal Code. Details of the redeveloped parcel are shown in Figure 2-18. The Applicant has requested that the City supply the required 17 replacement spaces as part of the City Maintenance Yard relocation. If the No Added Parking option is constructed, then the 17 spaces would be provided on a temporary basis at the proposed temporary parking lot at 636 Cypress Avenue and on a permanent basis as indicated below.. The City has not agreed to supply any replacement spaces regardless whether the Parking option or No Added Parking option were to be constructed Additional 20 Temporary Parking Spaces (Phase 3):During peak construction activities in Phase 3, parking for a maximum of 20 temporary parking spaces, in addition to the 20 temporary parking spaces provided at the off-site temporary parking area at 636 Cypress Avenue , would be provided at one or more sites, not yet identified, that would be leased or rented by the Applicant. Employees would walk to or be shuttled to the Project Site. The Applicant proposes to ensure to the City, through the submittal of any required documentation, that the parking spaces would be available during the temporary construction and drilling activities for the Proposed Project. If spaces are “remote,” located farther than 5 to 8 blocks from the Project Site as defined by the Applicant, a van pool shuttle service from the remote parking spaces would be provided to the Project Site by the Applicant. The Applicant proposes to obtain all required approvals and entitlements from the City and to make any required modifications to conform with City codes, identified as mitigation measures in the certified EIR, and any other requirements that may be imposed as a result of the Development Agreement or ballot measure. Construction Vehicle Parking (Phases 1-4 excluding permanent operations): The Applicant Exhibit B indicates that it has an agreement to utilize the below-ground parking area at 601Cypress Street for non-hazardous equipment storage and construction vehicle parking. Parking for construction vehicles and staging would be provided both at the Project Site at 555 6th Street and within the building at 601 Cypress Street during Phases 1-4. Parking for Ongoing Operations in (Phase 4): The long-term parking for a maximum of four Project employee vehicles during ongoing operations and maintenance will be supplied by four marked parking spaces on the Project Site at 555 6th Street. Additional parking required for maintenance activities for ongoing operations would also be accommodated onsite along the perimeter wall as indicated in Figure 2-18. No additional offsite parking would be required for long-term Project operations. Replacement of Spaces Eliminated by the Project: Fifteen parking spaces at the Project Site at 555 6th Street are used by City Maintenance Yard employees during working hours of Monday through Thursday from 7:00 a.m. to 6:00 p.m. excluding holidays. These spaces also supply free remote public parking on weekends under the City’s Preferential Parking Program, approved by the Coastal Commission, and are otherwise used by the public when available. The Application proposes to replace 15 spaces for free remote public parking in the offsite temporary parking lot at 636 Cypress Avenue on a temporary basis and as indicated below on a permanent basis. The City would be responsible to supply parking for its Maintenance Yard employees as part of its City Maintenance Yard relocation plan. Two on-street public parking spaces would also be eliminated by Project improvements to the southwest corner of 6th and Valley Drive; these spaces are not part of the City’s Preferential Parking Program. The Application proposes to replace these two spaces in the offsite temporary parking lot at 636 Cypress Avenue on a temporary basis and as indicated below on a permanent basis. The Application indicates potential overlap with onsite employee scheduling during the drilling portion of Phase 4, requiring four parking spaces at 636 Cypress Avenue to be vacant as one shift arrives and another shift is leaving. This results in the availability of 16, rather than 17, parking spaces for a period of approximately one hour. The Application indicates that relocation of the 17 public parking spaces requires a coordinated approach between the Applicant and the City and proposes that this relocation be governed by the Lease Agreement (Section 13). The Applicant proposes the relocated City Maintenance Yard be developed in a manner which could supply the permanent public parking spaces on weekends Exhibit B and at night, similar to the way in which the existing parking spaces at the current City Maintenance Yard are utilized. If the relocation of the City Maintenance Yard does not become the location for the permanent public parking spaces, then the Applicant proposes to provide 15 replacement public parking spaces as well as the additional 2 public parking spaces, prior to the commencement of Project operations, at the offsite temporary parking lot at 636 Cypress Avenue or to provide other suitable public parking spaces consistent with requirements of the City’s Preferential Parking Program, the California Coastal Act, and a framework proposed by the Applicant. 2.4.7 Project Life and Decommissioning Under the Proposed Oil Project, the oil and gas resources would be developed until they are depleted and developing them is no longer economically viable, for up to 35 years. Currently, the amount of crude oil that could be produced from the field is unknown, and future crude prices are difficult to assess. According to the Lease Agreement, the Proposed Oil Project could operate for up to 35 years. Figure 2.19 shows the estimated crude oil, gas and water production for the life of the Proposed Oil Project. If during Phase 2 the Applicant does not consider the level of production from the Project Site to be economically feasible, then decommissioning of the installed equipment would commence. Decommissioning would involve the removal of the drilling and temporary testing equipment and would include abandonment of wells according to the Division of Oil, Gas and Geothermal Resources (DOGGR) requirements. The Project Site would be left as a graded site with site improvements including the retaining walls, the perimeter chain link fence, and the perimeter landscaping. At the end of the Proposed Oil Project, when the owner applies to DOGGR and to the City to abandon the facility, a separate permit process and CEQA environmental review would be required to evaluate decommissioning of the entire Project Site. Since the timing of the decommissioning is unknown, the Applicant has not submitted a detailed decommissioning plan, and therefore any assessment of decommissioning activities would be speculative at this time. Exhibit B Figure 2-18 Cypress Parking Area Source: E&B Updated Parking Plan 1/8/2014 Exhibit B Figure 2.19 Estimated Production Levels Source: Based on Applicant submitted estimates 2.4.8 Project Scheduling Summary Under the Proposed Oil Project, there are a number of different activities with various allowances for time of day, day of week and annual limits. These are summarized in Table 2.16. Table 2.16 Proposed Oil Project Scheduling Summary Activity Allowed Period Annually Days and Hours per Day Workover Rig Maximum 90 days per year 8 am - 6 pm weekdays only Drilling Rig Phase 2 - 120 days 24 hours per day Exhibit B Phase 4 - 30 months Re-drills 30 days per year average, up to 150 per year max 24 hours per day Phase 1 and Phase 3 Construction Any 8 am - 6 pm weekdays and 9 am - 5 pm Saturdays Offsite ROW Construction Any 8 am - 3 pm weekdays only in the City of HB Truck deliveries Any 9am - 3 pm weekdays or emergencies Quiet mode drilling Phase 2 and Phase 4 Drilling, Re-drills 7 pm - 8 am Pipeline construction activities Phase 3 9 am - 3 pm weekdays. Exhibit B Exhibit C EXHIBIT “C” PUBLIC BENEFITS OF PROJECT With the approval of the Project by the voters of the City, the public benefits of the Project provided by the Lease include: a) the royalties as further described in the Lease in amounts estimated both by E&B and the City’s independent consultant, Kosmont Company, as described in the Cost Benefit Analysis, that have been recently estimated to range from [insert amount] pursuant to the City’s Cost Benefit Analysis to [insert amount] pursuant to E&B’s Economic Analysis;[UNDER DISCUSSION] and b) the minimum annual royalty of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled as further described in the Lease (“Minimum Royalty”). In addition, and as consideration for the benefits provided to E&B through the approval of this Agreement by the voters of the City, E&B has agreed to provide the additional public benefits as follows: 1) Accelerated Uplands Royalty Payments Commencing with Issuances of City Drilling Permit for First Well: E&B shall pay to the city a non-refundable, accelerated, royalty payment for future production revenues allocated to the City's Uplands under the Lease of One Million Dollars ($1,000,000), starting on the date of the issuance by the City of the drilling permit for the first well and continuing on the anniversary of that date until the Minimum Royalty payment in the Lease commences (“Accelerated Royalty Payment” or collectively, “Accelerated Royalty Payments”). For clarity, this period is estimated to continue for approx. 5 years and total Five Million Dollars ($5,000,000). The Accelerated Royalty Payments are not restricted, and may be used in accordance with applicable City laws. The Advance Royalty Payments are being advanced only against the 11 2/3% Uplands Royalty Percentage, as defined in Paragraph 1(a) of Exhibit B of the Lease. The Accelerated Royalty Payments shall be repaid by the City from the aforesaid Uplands Royalties without interest. Subject to the foregoing conditions, for purposes of repayment, the Accelerated Royalty Payments shall otherwise be subject to the repayment mechanism set forth in Section 13.d(4) of the Lease. If Uplands Royalties are not sufficient to repay the Accelerated Royalty Payments, then the City is not required to repay the Accelerated Royalty Payments. 2) Bonus Payments During Years 4-13 of the Lease to Ensure $1,000,000 Royalty Amount: The Lease provides for a “Minimum Royalty” of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled and continuing to the 13th anniversary of the first well’s completion date (“Years 4-13”). If all royalties, both Uplands Royalties and Tidelands Royalties, as specified in Exhibit B to the Lease, paid to the City during Years 4-13 do not exceed One Million Dollars Formatted: Font: Times New Roman, 12 pt,Underline Formatted: List Paragraph, Numbered + Level:1 + Numbering Style: 1, 2, 3, … + Start at: 1 +Alignment: Left + Aligned at: 0.25" + Indentat: 0.5" Formatted: Font: Times New Roman, 12 pt, Underline Formatted: List Paragraph Exhibit C ($1,000,000), E&B shall pay to the City an additional bonus amount equal to the difference between the Minimum Royalty and One Million Dollars ($1,000,000) (“Bonus Payment”). For clarity, given that the Minimum Royalty is Five Hundred Thousand Dollars ($500,000), this Bonus Payment would be an additional amount of up to Five Hundred Thousand Dollars ($500,000), for a total of One Million Dollars ($1,000,000) annually. The Bonus Payments are not restricted, and may be used in accordance with applicable City laws. The Bonus Payments are bonuses to the City as Lessor under the Lease, are designed to be an additional benefit to the City pursuant to this Development Agreement, and shall not be considered royalties or otherwise subject to the allocation formula under Exhibit B of the Lease. 1) Advances Commencing with Issuance of City Drilling Permit for First Well: E&B shall pay to the City, as an advance, One Million Dollars ($1,000,000) per year, starting on the date of the issuance by the City of the drilling permit for the first well and continuing on the anniversary of that date until the Minimum Royalty payment in the Lease commences (“Drilling Permit Advance” or collectively, “Drilling Permit Advances”). (For clarity, this period is estimated to continue for approximately five years, for a total of Five Million Dollars ($5,000,000).) The Drilling Permit Advances are not restricted and may be used in accordance with applicable City laws. Each $1,000,000 Drilling Permit Advance would be adjusted by any royalties received by the City in that year to ensure that the City receives a minimum of $1,000,000 each year. The Drilling Permit Advances shall be repaid by the City from royalties, including royalties from tidelands, without interest, and will be added to the advance amount and subject to the repayment process set forth in Section 13.d(4) of the Lease. If royalties are not sufficient to repay the Drilling Permit Advances, then the City is not required to repay the Drilling Permit Advances. 2)3) Additional Payment During Years 4-13 To Ensure $1,000,000 Minimum Amount: The Lease provides for a Minimum Royalty of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled and continuing to the 13th anniversary (“Years 4-13”). If royalties provided to the City during Years 4-13 do not exceed One Million Dollars ($1,000,000), E&B shall pay to the City an additional amount equal to the difference between the Minimum Royalty and One Million Dollars ($1,000,000). For clarity, given that the Minimum Royalty is Five Hundred Thousand Dollars ($500,000), this payment would be an additional amount of up to Five Hundred Thousand Dollars ($500,000), for a total of One Million Dollars ($1,000,000). 3)4) Remediation of City Maintenance Yard: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of the Project, E&B shall implement the proposed Remedial Action Plan as described in Exhibit B to this Agreement in Phase 3 of the Formatted: Font: Times New Roman, 12 pt,Underline Formatted: List Paragraph Formatted: Underline Formatted: List Paragraph, Add spacebetween paragraphs of the same style,Numbered + Level: 1 + Numbering Style: 1, 2,3, … + Start at: 1 + Alignment: Left + Aligned at: 0.25" + Indent at: 0.5" Formatted: Font: Times New Roman, 12 pt Formatted: List Paragraph, Add spacebetween paragraphs of the same style,Numbered + Level: 1 + Numbering Style: 1, 2, 3, … + Start at: 1 + Alignment: Left + Aligned at: 0.25" + Indent at: 0.5" Formatted: Font: Times New Roman, 12 pt Exhibit C Project; however, if E&B determines as a part of Phase 2 not to proceed with Phase 3 of the Project, then E&B shall conduct any necessary remediation activities at the Project site to allow the site to be used for industrial or commercial purposes (e.g., City maintenance or commercial activities), in a manner consistent with its obligations under the Lease, the Settlement Agreement and this Agreement. E&B shall not be obligated to remediate the property for any other future uses, such as commercial or residential uses. [If voters do not approve ballot measure, this document would not be vehicle for determining clean-up, but in any case, E&B is will not remediate site if project is not approved.] 4) Educational Funding: E&B’s Proposal: E&B shall pay 1% of gross revenues (currently estimated to be Thirty Seven Million Dollars ($37,000,000)) to the Hermosa Beach Education Foundation (“Foundation”), and if the Foundation does not accept the donation, the amount shall be provided to the City to be used for any municipal purposes. Councilmember DiVirgilio’s proposal: Education Funding: E&B shall pay 1% of its gross annual revenues directly to the Hermosa Beach School District. In the event that the School District does not accept the funds, E&B shall pay 1% of its gross annual revenues directly to the Hermosa Beach Education Foundation. Payment shall be made monthly each year the Development Agreement is in effect, commencing the month that production commences. The School District and the Education Foundation, as the case may be, are third party beneficiaries of this obligation and may enforce it as though parties to this Development Agreement. The City is not an indispensable party in any such action. In the event neither the School District nor the Education Foundation accepts the funds, this requirement will be deemed satisfied. Councilmember Fangary would delete this paragraph 4. [UNDER DISCUSSION] 5) Relocation of City Maintenance Yard: If the voters approve the Project, the City may determine to relocate the City Maintenance Yard to a temporary location and then to a permanent location or alternatively, to relocate the City Maintenance Yard directly to a permanent location, without a temporary location. With respect to either of these options, E&B agrees as follows: a. $3.5 Million Forgiven Upon Issuance by City of Drilling Permit for First Well: Upon the issuance by the City of the drilling permit for the first well, the City shall not be required to repay the Three Million Five Hundred Thousand Dollars ($3,500,000), plus interest, to E&B as further described in Section 4.6.b of the Lease. b. $6.5 Million Advance for Permanent Relocation: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of Formatted: Indent: Left: 0.5", Hanging: 0.5", Numbered + Level: 1 + Numbering Style: 1, 2, 3, … + Start at: 1 + Alignment: Left + Alignedat: 0.25" + Indent at: 0.5" Formatted: Numbered + Level: 1 + Numbering Style: 1, 2, 3, … + Start at: 1 +Alignment: Left + Aligned at: 0.25" + Indentat: 0.5" Formatted: Indent: Left: 0.5", Hanging: 0.5", Numbered + Level: 1 + Numbering Style: 1, 2,3, … + Start at: 1 + Alignment: Left + Alignedat: 0.25" + Indent at: 0.5" Exhibit C the Project, then E&B shall advance Six Million Five Hundred Thousand Dollars ($6,500,000) to the City for the permanent relocation of the City Maintenance Yard. 6) Matching Funds to Property Owners for Undergrounding Utility Lines in the City: If E&B determines as a part of Phase II of the Project to proceed with Phase III of the Project, E&B agrees to provide up to Thirty Million Dollars $30,000,000 in matching funds (50% of the costs) to property owners for the purpose of undergrounding utility lines in the City. Property owners in the City may utilize the City process to create a district for this purpose or, alternatively, coordinate directly with the utility to achieve the undergrounding of utilities. The costs would be confirmed through the City process or by the utility, and any costs incurred by the City (that would otherwise be reimbursed by the property owner) would be included in the cost amount. These matching funds would be funded through gross revenues from the Project, with an initial amount of One Million Dollars ($1,000,000) to be contributed by E&B at the commencement of the program. [UNDER DISCUSSION] 7)6) Hermosa Beach Residential Property Fund: Purpose: To provide owners of residential properties within 600 feet of the Hermosa Beach Oil Recovery Project (Project) with assurance that they will incur no loss, as a result of the Project, to their property’s fair market value (Market Value), in the event of a sale of their property. Such assurance is offered through voluntary participation in a Hermosa Beach Residential Property Fund (Fund). Offer: The Fund will pay the difference between an eligible property's actual negotiated sale price and the appraised Market Value of the property, which will be determined as if the Project had not been built. A predetermined independent appraisal process will demonstrate if there is a loss in the Market Value of an owner's residential property. Participation: Participation in the Fund is entirely voluntary. Eligibility: Owners of residential properties that are located within the “eligibility area” (within 600 feet of the Project, measured property edge to property edge) are eligible to participate. The claim must be made by the then current owner of the property and only one claim per property will be allowed; however, the owner need not own the property when the Fund commences in order to be eligible for a claim. By way of example only, if the original owner of the property does not make a claim in connection with its sale to a buyer, then so long as the sale occurs during the Fund term, the buyer would automatically succeed to the rights of the selling property owner with respect to the Fund, including the right to make any claim, subject to the other requirements for participation in this Fund. Costs: There is no monetary cost to participating residential property owners to receive the benefits of the Fund, now or in the future. All costs, including the costs of obtaining required appraisals, are paid by the Fund. Formatted: List Paragraph, Add space between paragraphs of the same style,Numbered + Level: 1 + Numbering Style: 1, 2,3, … + Start at: 1 + Alignment: Left + Alignedat: 0.25" + Indent at: 0.5" Formatted: Font: Times New Roman, 12 pt Exhibit C Cap: There will be a $250,000,000 cap (Funding Cap) on the total amount of benefits that the Fund can pay out. Term: The Fund will commence upon issuance of the City Drilling Permit for First Well by the City of Hermosa Beach and will continue in effect until the first to occur of (a) six years from commencement of the Fund, or one year after the completion of the final Project well, whichever is later, or (b) the entire Funding Cap has been disbursed to eligible residential property owners. The six-year aspect of the Fund term described in subpart (a), above, will be extended consistent with any extension of the term of the Development Agreement in accordance with Section 6.24 of the Development Agreement. Administration: E&B Natural Resources (E&B) will establish the Fund and designate a qualified, independent Fund Administrator. The Fund Administrator will not be an officer, employee, or affiliate of E&B. Application: To receive benefits, a selling owner of a residential property within the eligible area will submit to the Fund Administrator: (1) a signed Program Participation Agreement setting forth the terms of the Fund program (Program) and a signed claim form; (2) a copy of an accepted written offer to purchase the residence on arms-length terms from a buyer who is not related to or affiliated with the selling residential property owner and that complies with the Program requirements; and (3) a current (dated not earlier than six months prior to the property owner’s application) appraisal reflecting the Market Value of the property, which will be determined as if the Project had not been built. The appraisal must be prepared by an MAI or RM designated appraiser who is licensed in California and has at least five years of experience appraising similarly-situated residential properties in the South Bay region of Los Angeles County, California. The owner will not be required to execute a general release of claims but will be obligated solely to release claims pertaining to loss of property value. Benefits: Within 14 calendar days after receiving a selling residential property owner’s application materials, the Fund will either agree to pay the amount of the claim, or obtain another appraisal of the residential property using the same criteria as the owner's appraisal. If the Fund obtains an alternate appraisal and the difference between the two appraisals is within 10% of the higher appraised Market Value, the Market Value for purposes of the residential property owner’s claim on the Fund will be equal to the average of the two appraised Market Values. If not, a third appraiser will be selected by the first two appraisers, and the Market Value determination in the third appraisal will be deemed the Market Value of the property. The owner and the Fund will be conclusively bound by the third appraisal. The difference between the Market Value of the residence, as so determined, and the property’s actual negotiated sale price will be paid by the Fund to the selling Exhibit C homeowner either at closing or within 10 calendar days after the Market Value of the residence has been determined, whichever takes place later. Market Value: Each appraisal obtained will determine the Market Value of the homeowner’s residential property as of the date of the appraisal and as if the Project had never been built. Claims: By submitting a claim to the Fund, the homeowner agrees to be bound by the terms of Program, and to accept reimbursement from the Fund for a loss in the Market Value of the owner’s residential property in exchange for foregoing any legal action to receive compensation for a decrease in the Market Value of the owner’s residential property that is caused by or results from the Project. Any offer that a participating owner enters into for sale of its residence must disclose that E&B has a right of first refusal to purchase the property for a price equal to the Market Value determined by the appraisal process without incurring any broker's commission. Any claim against the Fund must be submitted before the sale of the eligible residential property is completed; no claim will be considered or paid by the Fund after the closing of the sale of the residential property. Funding: E&B will ensure that, at all times during the Fund term, there is a minimum balance of $1,000,000 in the Fund, and E&B will ensure that at least $1,000,000 is in the Fund upon expiration of the six-year Fund term. E&B will regularly replenish the Fund up to the Funding Cap, as and if disbursements are made, to ensure that the Fund has readily-available funds to satisfy potential claims asserted by owners of eligible residential properties under the Program. E&B will also provide additional funding totaling a maximum of $4,000,000 from contributions based on 1.5% of gross project revenues on an annual basis until either a total of $4,000,000 has been contributed to the Fund from gross project revenues or the Funding Cap has been reached. Distribution: E&B will ensure that upon expiration of the Fund term, the Fund will have a remaining balance of at least $1,000,000 and up to a maximum sum of $5,000,000, depending on the total amount of claims that have been made against and paid by the Fund. The remaining amount in the Fund at the end of the Term shall be distributed to the then current owners of all otherwise-eligible residential properties located within 300 feet of the Project for which there has not previously been made any claim. The owner of each such residential property will be entitled to an equal, pro rata share of the amount remaining in the Fund at the end of the Fund term (after all appraisal costs and other Fund administrative expenses have been deducted). The pro rata share of the Fund balance to which each owner will be entitled will be based on the total number of properties entitled to share in the distribution. By way of example only, if at the end of the Fund term, there are 60 residential properties within 300 feet of the Project for which no claim has been made against, and no distribution received from, the Fund, then the owner of each such residential property will be entitled to 1/60 of the amount Exhibit C then remaining in the Fund after all appraisal costs and other Fund administrative expenses have been deducted. : Exhibit D EXHIBIT “D” CONDITIONS OF PROJECT APPROVAL Exhibit D includes: 1. Exhibit D-1 Conditions of Approval from 1993 Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93-5632 (CUP to be abandoned and superseded by this agreement) 2. Exhibit D-2 Additional Project Conditions 3. Exhibit D-3 Mitigation Measures/Mitigation Monitoring Plan- from Section 8.0 of Final Environmental Impact Report (as revised at Hermosa Beach City Council certification hearing on July 8, 2014 per Resolution 14-6908). Exhibit D Exhibit D-1 Exhibit D-1 Conditions of Approval from 1993 Conditional Use Permit for Oil Development at the City Maintenance Yard, approved by the City in Resolution No. 93-5632 (CUP to be abandoned and superseded by this Agreement) (Amendments to conditions necessary for consistency with Project Description, Mitigation Measures and other conditions and terms are reflected herein) SECTION 1. GENERAL 1. The testing phase for all production shall be a maximum of one year from the date drilling is initiated. 2. A minimum of one annual site audit shall take place to inspect for soil contamination as a result of accidental spills in any area not paved and expose. Auditor shall be hired by City. 3. The maximum number of days the work over rigs or any other rig (other than a drill rig) that is to be used on-site shall be 90 days per year, and shall be operated weekdays 8:00 A.M. to 6:00 P.M. excluding holidays. 4. In the event that a residence with solar panels is affected by shading, a site specific study paid for by the oil contractor shall be conducted to determine economic impact. 5. Pursuant to Assembly Bill 3180 the operation shall be monitored for all condition of the approval of which the City has responsibility which includes (but not limited to) noise monitoring and inspection of the site for proper maintenance. 6. The proposed plans shall be submitted to the State Division of Oil, Gas & Geothermal Resources for their review and recommendation; a. Any recommendation by the State Division of Oil, Gas & Geothermal Resources shall be taken into consideration prior to approval, and may be included as condition of approval. 7. Drill cuttings and other wastes, shall be collected in above ground containers and disposed of at an approved disposal site. Receipts for all disposal of waste product shall be provided within ten (10) days of disposal to the Public Works Director. Exhibit D-1 8. All requirements, standards, conditions stated within the oil Production Code, Chapter 21-A, of the City’s Municipal Code shall be met, unless more restrictive requirements are imposed through mitigation measures; where it cannot be clearly determined whether the City’s Oil Ordinance, Chapter 21-A or mitigation measure are more stringent, the appropriate City staff shall make a determination; appealable to the City Council. 9. Three (3) copies of final building plans including site, elevation, and floor plans shall be submitted for review and approval by the Planning Director prior to the issuance of any Building Permit. 10. The proposed development shall be in substantial conformance with submitted plans. Any minor modification shall be reviewed and may be approved by the Planning Director. 11. All wells must be drilled and completed within 55 months from the start of drilling of the first exploratory well in accordance with the following schedule: PHASE 1 SITE PREPARATION 6 MONTHS PHASE 2 DRILLING AND TESTING PHASE 12 MONTHS (Exploratory drilling, production testing) PHASE 3 FINAL DESIGN AND CONSTRUCTION PHASE 14 MONTHS (Permanent facility construction) PHASE 4 DEVELOPMENT AND OPERATIONS (DRILLING) 34 MONTHS (Development Drilling, 1 month per well) If the Drilling Contractor is delayed at any time in the progress of work by any act or neglect of the City of Hermosa Beach or any other governmental body having authority over this project, or by labor disputes, adverse weather conditions, by law, war, riots, strikes, Exhibit D-1 unavoidable casualties, unusual delays in receiving material or equipment or by an act of God, or causes beyond the control of the Drilling Contractor, when justified, the time period may be extended to a reasonable time to correspond with the delay incurred by the Drilling Contractor. SECTION 2. LAND USE 1. The maximum size for any storage tank of any type shall be forty feet in diameter and sixteen feet in height, appurtenances not included. 2. Prior to construction and prior to obtaining building permits for oil production, a complete soil analysis shall be performed and approved by all applicable governing agencies having jurisdiction over the project. 3. Not more than five tanks shall be installed, and shall be submerged in a concrete basin which contains 10% above the volume required by the State Division of Oil, Gas & Geothermal Resources and the Uniform Fire Code which is as follows: the volumetric capacity of the diked area shall not be less than the greatest amount of liquid that can be released from the largest tank within the diked area. The capacity of the diked areas enclosing more than one tank shall be calculated by deducting the volume of the tanks other than the largest tank below the height of the dike. 4. All wells shall be drilled and cemented in accordance with State Division of Oil, Gas and Geothermal Resources regulations to protect underground aquifers. 5. The electrical service systems shall be designed with sufficient capacity to minimize surging impacts. 6. The well cellars shall be concrete lined and shall be designed to hold contaminated run-off from on-site sources; or a sump shall be provided. 7. Solid state control console linked to a control system to perform energy conservation functions such as start/stop time programming of motor equipment, data logging of energy consumption and maintenance and service scheduling shall be provided. a. All Electrical machinery where possible shall have a minimum coefficient of Exhibit D-1 efficiency of 0.75. SECTION 3. PUBLIC SAFETY 1. The site shall be enclosed by a solid masonry or concrete wall with solid gates during all operations, protecting both against public entry, observation and attraction. A chain link fence to provide security is acceptable only through Phases 1 and 2. 2. Security personnel shall be employed at all times during the drilling stage (24 hours) and emergency phone numbers shall be posted during production Phases 2 and 4. 3. Signs warning of unauthorized entry and safety hazards shall be posted on all sides. 4. Access to facilities shall be limited to authorized personnel only. 5. Trees shall be maintained at a distance from all walls to prohibit children and others from unauthorized entry. 6. All site personnel shall be instructed on required safety procedures if hydrogen sulfide concentrations are encountered. Documentation of training and instruction shall be made available to the City Manager. 7. Both solid and liquid wastes shall be sampled and tested to determine if it needs to be treated as a hazardous waste. 8. An Oil Spill Prevention Control Countermeasures (SPCC) Plan and an Oil Drilling Contingency Plan will be Prepared for the Project and approved by the State Division of Oil, Gas and Geothermal Resources, and the City of Hermosa Beach Fire and Building and Safety Departments. 9. Drillsite and production facilities shall be constructed in accordance with the State seismic standards, and designed in accordance with U. B.C. seismic requirements for hazardous facilities. 10. A soils engineering report and engineering geology report prepared by a licensed Exhibit D-1 geologist and engineer shall be prepared and reviewed in conjunction with the plans for all physical improvements. Said report shall address potential seismic hazards, such as liquefaction, due to soils or geologic conditions. All recommendations contained in said reports shall be incorporated in the construction documents. 11. An emergency response plan, including a blowout prevention and control plan, shall be prepared for review and approval by the State Division of Oil, Gas & Geothermal Resources and the Hermosa Beach Fire Department. 12. When a leak or spill occurs, it shall be contained, the fluid shall be recovered and the area restored to its original condition. SECTION 4. FIRE SAFETY 1. Adequate fire detection and fighting equipment and supplies, approved by the Fire Department, shall be maintained on the drillsite and tank production facility at all times. 2. A supplementary analysis by a professional consultant shall be provided detailing any necessary improvements the Fire Department may need to prevent, and to halt oil related fires and shall also include the following: public notification, warning and evacuation plan. 3. Oil sumps, drip pans, etc. shall be cleaned at regular intervals to reduce fire hazards and prevent minor spills. 4. Oily rags, paper and miscellaneous waste shall be disposed of in an appropriate manner to reduce fire hazards 5. Signs warning of flammable fluids and prohibiting smoking shall be installed where appropriate. 6. The drillsite and production facility shall be protected by automatic fire detection sensors and suppression systems. The fire suppression systems shall include a tank- cooling sprinkler system. Exhibit D-1 7. Drilling operations shall be conducted in accordance with appropriate State Division of Oil, Gas & Geothermal Resources regulations and shall utilize all required blowout prevention equipment and safety devices. 8. Fire flows to service the operation shall meet Fire Department regulations. 9. All equipment necessary to contain an oil fire or blowout shall be provided and/or maintained on site and all fire personnel shall be trained on its use. SECTION 6. VEHICLE TRAFFIC AND CIRCULATION ON AND OFF SITE 1. All truck deliveries shall be limited to daylight hours (9:00 AM – 3:00 PM), Monday through Friday, except for an emergency situation, as defined by this agreement and reported to the City in accordance with the notification requirement, which have been reported to the Director of Public Works in advance of the delivery. 2. Operation of earthmoving equipment shall be limited to daytime hours between 8 AM and 6 PM. 3. Equipment deliveries shall be made only during daytime hours between 9 AM and 3 PM. 4. Project related truck travel shall be restricted to specific truck routes and access points as approved by the Public Works Department. 5. Signs shall be installed to direct detour traffic as approved by the Public Works Director. 6. The number of truck trips shall be limited to a maximum of 18 round trips per day, except in an emergency, as defined by this agreement and reported to the City in accordance with the notification requirement. 7. Maintenance Yard site access shall be designed to enable trucks to turn into the site without inhibiting traffic movement on Valley Drive or Sixth Street. 8. Minor curb radii reconstruction shall be done by the operator as determined by the Exhibit D-1 City Public Works depending on the length and necessary turning radii for project related trucks. 9. Area residents shall be notified of pipeline construction prior to commencement. Signs shall be installed to direct detour traffic. 10. All trucks arriving or departing the drill site shall be washed to prevent spillage of earth and all routes shall be swept and washed by the driller as required by the City. 11. An evaluation of the structural condition of the existing pavement shall be performed by a soils engineer on all access streets and the proposed truck routes prior to commencing any site preparation or construction and prior to the issuance of any necessary permits. The evaluation shall include as a minimum: a) the number, type, size and weight of trucks for export of materials or product, b) the number, type, size and weight of truck deliveries of building supplies, drilling supplies etc., c) the number, type, size and weight of equipment transported to the site, d) other associated transportation items, e) other anticipated loading. The evaluation shall contain recommendations as to the actions required to maintain said streets and routes in their current condition throughout the planned development phase, planned production phase, and in the close out phase. 12. The operator shall perform the actions on the existing pavement as recommended by the soils or highway engineer, the operator will hire a licensed contractor and provide street profiles, drawings, and engineering to the satisfaction of the Public Works Department prior to work commencing. 13. The City Council may restrict the use of certain street, alleys, or roadways in connection with the permittee’s operation. In the event any street, alley or roadway is Exhibit D-1 damaged by the permittee’s operations, such damages shall be paid for by the permittee upon demand by the City, and the failure to pay such damages, being the reasonable cost of the repair of any such damaged portions, shall be grounds for the revocation of the permit and the collection of such damages. SECTION 7. SANITARY SEWER 1. Use of sanitary sewer is prohibited, except for the minimal use associated with the office and restroom facilities. Any water from oil production shall be disposed in the four disposal wells. SECTION 8. NOISE /VIBRATION 1. Tripping will be restricted to daylight hours only. 2. Loudspeaker paging systems shall be prohibited. 3. Well workover rigs or any other rig that is used shall be operated only between the hours of 8:00 A.M. and 6:00 P.M. during daytime weekday hours only, excluding holidays, except in an emergency, as defined herein and reported to the City in accordance with the notification requirement. The exhaust and intake of the diesel engine (if used on the workover rig) shall be muffled to reduce noise to an acceptable limit. The operator shall use whatever means necessary, including but not limited to, enclosing the diesel engine and rig in acoustic blankets or housing. 4. All oil maintenance equipment, vehicles and non-electrical motors shall be equipped with manufacturer approved mufflers or housed in a sound-proofing device. 5. Noise monitoring shall be conducted under the supervision of an independent certified acoustical engineer paid for by the permittee. Reports shall be submitted to the Planning Director within three working days after the completion of each phase of the monitoring. The monitoring shall include the following: a. Pre-drilling phase monitoring. Prior to the start of the drilling phase, noise measurements shall be obtained during the operation of the specific drilling rig which has been selected and the measurements shall be related to those Exhibit D-1 experienced at the nearest residential boundaries to the drilling site. In addition, the noise control measures which have been (or will be) applied to the rig as needed for compliance with the City of Hermosa Beach noise ordinances shall be identified. b. Start of Drilling. Noise measurements shall be obtained during the nighttime hours (10:00 P.M. to 7:00 A.M.) for at least six hours on each of the three nights within the five day period from the start of the drilling phase. Monitoring is to occur at the nearest residential boundary to the actual drilling operation. c. During the drilling phase. Noise monitoring shall occur during a six-hour period between the hours from 10:00 P.M. to 7:00 A.M. at least once each month during the drilling phase of the project. The noise level data obtained shall be compared to the City of Hermosa Beach Noise Ordinance standards by the Planning Department. Where an exceedence of the standards is identified, noise control measures shall be required. Production phase. Noise measurements shall be obtained during a six-hour period between the hours from 10:00 P.M. to 7:00 A.M. at least once each year during the production and completion phase.SECTION 9. LANDSCAPING 1. A Detailed Landscape Plan for Phases 2 (exploratory drilling and testing) and Phase 4, indicating the type, size and quantity of plant materials shall be submitted to the Planning Commission, and shall comply with Section 21A-2.9 of the Oil Code. 2. During Phase 2, test facility, landscaping consisting of 24” box, or larger size trees may be installed without permanent planting. 3. Minimum 24” boxed trees for Phases 2 and 4 shall be adequate in size to create a buffer effect to obscure visibility of oil production activity. Permanent trees planted around the perimeter of the site for Phase 4 shall be a minimum sixteen (16) feet high at planting. 4. Trees along the lot perimeter shall be provided to create a dense landscape buffer to the satisfaction and field review of the Planning Director. Exhibit D-1 5. The aesthetic impact of the exposed masonry walls on the west and northern sides shall be softened with the planting of climbing vines to the satisfaction and review of the Planning Director. 6. Landscaping shall be maintained in a neat and clean condition. 7. A complete automatic sprinkler system shall be provided prior to commencement of Phases 2 and 4. SECTION 10. AESTHETICS 1. The tanks, acoustical wrap and wall, and production facility shall be painted a neutral color to blend in with in with the surroundings; color shall be reviewed and approved the Planning Commission. 2. The use of architectural lighting beyond safety and security requirements shall be prohibited. 3. The site for drilling equipment and the storage facilities shall be depressed in combination with walls so that the visual impact is minimized. 4. All outdoor lighting shall be shielded and directed inward of the site. 5. Lighting shall be limited solely to the amount and intensities necessary for safety and security purposes. 6. Certain activities which might involve unshielded lighting (i.e., site preparation and restoration) activities shall be limited to daylight hours and thus not require nighttime lighting. 7. A wall maintained graffiti free of a minimum of 12 feet in height shall be provided; wall materials shall be reviewed and approved by Planning Director. During test drilling minimum 6’high fencing shall be provided. See Mitigation Measures for Noise and Vibration in D-3 below for additional requirements for this wall. Exhibit D-1 8. Tanks shall be submerged 6 to 8 feet or more below grade and will be adjacent to the 35-foot high privacy wall. 9. If the drill derrick remains idle for more than one year, review and approval by the City Planning Commission or the City Council shall be required, or the derrick shall be dismantled at the expense of the operator. 10. All production equipment and structures shall be painted to blend with the surrounding environment with review and approval by the Planning Director. 11. On-site signs shall be limited to those needed for public health and safety. 12. All derricks masts hereafter erected for drilling, re-drilling or remedial operations or for use in production operations shall be removed within 45 days after completion of the work unless otherwise ordered by the Division of Oil, Gas & Geothermal Resources of the state. 13. The operator shall diligently and continuously pursue drilling operations until the all 30 oil wells and all four (4) water disposal wells are completed or abandoned to the satisfaction of the Division of Oil, Gas & Geothermal Resources of the state and upon completion or abandonment shall remove all drilling equipment from the drill site within 45 days following completion or abandonment of the well unless otherwise ordered by the Division of Oil, Gas & Geothermal Resources. SECTION 11. ODORS/VAPOR/AIR POLLUTION 1. A vapor recovery system shall be installed to recover 99% of hydrocarbon emission during storage and transfer of crude oil. 2. Raw gas shall not be allowed into the atmosphere. 3. Gas and vapor detection systems shall be installed at appropriate locations. 4. All project site activities shall be conducted such as to eliminate escape of gas in accordance with best available control technology and practices which shall be reviewed and approved by the City. Exhibit D-1 5. All requirements of AQMD shall be met at all times. 6. A state-of-the-art scrubber shall be employed for the exploratory phase to eliminate odors from waste gases, and any flame shall be enclosed. 7. Tanks shall be designed and located so that no odors or fumes can be detected from the adjacent areas outside the exterior walls of the project. 8. Operators shall not blow lines to the atmosphere, except in an emergency, as defined below in Section 14. and reported to the City in accordance with the notification requirement. 9. Construction equipment and vehicles shall be maintained in proper tune. 10. Odorless drilling muds shall be used. 11. Well tubing and rods shall not remain out of the well during workover operation less than 8-hours. The tubing will be surface washed with a detergent solution to remove odor bearing residual hydrocarbons if exposed longer than 8-hours. 12. Odor control will be further enforced by the SCAQMD under Rules 402, 466.1 of their regulations, and the commercial recovery system shall be employed for the permanent facility. 13. There shall be no open flames allowed. 14. The permittee shall monitor drilling mud during drilling on the site for odorous substances and take such measures to eliminate any odor which would be perceptible outside the drill site. 15. The permittee shall undertake no refining process or any process for the extraction of products from natural gas, except for such minor processeds as necessary to make natural gas acceptable to the City gas mains for domestic use. [correction of typo] 16. Well cellars shall be maintained in a clean and efficient manner to prevent waste accumulation and shall be frequently steam cleaned. Exhibit D-1 SECTION 12. GRADING/STORM WATER/SITE RUNOFF 1. Grading shall not be performed when wind speeds exceed 20 mph. The contractor shall maintain a wind speed monitoring device on site during grading operations. The contractor shall continually keep the soil moist during grading operations. At no time shall any dust be allowed to leave the work site. 2. Normal wetting procedures shall be employed during grading. Review and approval of procedure shall be by Public Works Director. 3. Graded surfaces shall be paved or landscaped per approved plan. 4. Project site shall be graded so that all contaminated runoff is collected and treated on-site and disposed of according to all laws. 5. Site shall be graded in a manner so that all hazards or contaminated fluids and runoff are directed toward a cellar and approved pit and disposed of properly. 6. No water from the site shall be allowed to enter the storm drainage system or any public area. 7. No water from the site shall be allowed to surface flow across the public beach. SECTION 13. PIPELINE CONSTRUCTION 1. The pipeline operators shall adhere to all applicable federal, state, regional, and local statutes governing design, construction, operation, and maintenance of the pipelines and related equipment. 2. A detailed pipeline survey shall be conducted in order to locate existing pipelines prior to excavation for pipeline construction. 3. A responsible agent paid for by the applicant shall be present during excavations. 4. Areas of construction and maintenance activities shall be delineated by signs, Exhibit D-1 flagmen, pavement markings, barricades, and lights, as determined by permit requirements of all local agencies. 5. Where pedestrian activities are affected during construction, appropriate warning signs shall be installed and pedestrians will be diverted. Pedestrian access to businesses and residences will be maintained during construction. Special facilities, such as handrails, fences, and walkways shall be provided, if necessary, for the safety of pedestrians. 6. Obstruction of emergency vehicle operations will be partially mitigated by ensuring that providers of emergency services are kept informed of the location, nature, and duration of construction activities so alternate routes can be chosen. It is essential that fire department access is maintained to all buildings adjacent to construction activities. For this reason, a minimum of at least one lane for streets undergoing construction will be kept open at all times, and fire hydrants in construction areas will remain accessible. 7. If public transit stops along pipeline routes need to be temporarily relocated during construction, the applicant shall provide signs directing riders to the temporary stop location. 8. When hauling excavated and waste materials from construction sites, substandard roadways will be avoided and local jurisdiction regulation governing hauling vehicles will be adhered to. 9. Pipeline construction and operation of earth moving equipment shall be limited to daylight hours between 8:00 AM and 3:00 PM and shall not be permitted during weekend periods. Additionally, construction-related trucks should not be operated during peak traffic hours of 7 to 9 AM and 3 to 7 PM. Pipeline construction at major intersections shall be limited to daylight hours between 9:00 AM and 3:00 PM to avoid peak traffic periods. 10. Equipment deliveries shall be made only during daytime hours between 8 AM and 3 PM. 11. In order to reduce visual impacts and possible safety hazards, storage of pipes and Exhibit D-1 other materials, as well as construction equipment, shall not be permitted on any street during non-construction hours. 12. Area residents within 300’ shall be notified about the pipeline construction operation prior to commencement of construction. 13. Detour signs on pipeline construction routes shall be placed at appropriate locations. 14. Steel plates covering pipeline excavation trenches shall be placed to permit traffic movement during non-construction hours. 15. Pipelines shall be designed with ample safety factors, pressure-tested prior to being placed in operation, and monitored for corrosion once in operation. 16. Safety shut-down devices that respond to drops in pipeline pressure shall be incorporated into the project in order to stop the flow of the pipeline contents in case of a pipeline rupture. 17. Groundwater level and land subsidence shall be monitored to insure that pipeline damage does not occur as a result of geologic and hydrologic phenomena. The annual subsidence survey shall include a report to the City on monitoring efforts to insure pipelining damage has not occurred. 18. Pipeline construction along Valley Drive shall be approved by the Director of Public Works prior to issuance of a permit. 19. Pipeline construction shall not occur in the area known as the Hermosa Valley Greenbelt except that the permittee may connect to West Basin Municipal Water District’s existing reclaimed water line for the purposes and as described in Exhibit B to this Agreement. 20. Storage of materials shall not be allowed on the Hermosa Valley Greenbelt. The storage or dumping upon the greenbelt of any materials, construction equipment, debris, oil drilling equipment, drilling rigs, piping, etc., and any and all equipment and vehicles necessary for the construction and maintenance of the pipeline and oil development site shall be prohibited. The use of the greenbelt as a staging area for Exhibit D-1 construction of the oil facility or pipeline shall be prohibited. There shall be no parking or standing of any vehicles on the greenbelt for any time period. 21. Trenches shall be covered during non-working hours to minimize traffic circulation problems. SECTION 14 Definition and notification requirements for emergency situations: I. For purposes of these conditions, “Emergency” is defined as follows: A threat to the health and safety of persons in the surrounding area to the drill site and the following conditions which require immediate action: A. Conditions which could lead to potential spill or well blowout: 1. Entry of oil and gas into the wellbore while drilling, tripping or out of the hole which may be indicated by one or more of the following: a. Pit volume gain b. Well flowing with pumps off c. Flow rate increases with circulation d. Improper hole fill-up on trips e. Sudden increase in drilling rate f. Pump pressure decreases and pump rate increases g. Decrease in returning mud rate h. Sloughing shale i. Changes in mud salinity and/or mud flow properties 2. Lost circulation or loss of ability to circulate 3. Casing or wellhead failure while drilling 4. Stuck pipe and/or equipment during any of the following operations: Exhibit D-1 a. Drilling b. Tripping drill pipe and tools c. Wireline logging d. Drill stem testing e. Running casing f. Perforating and stimulating completion interval 5. Loss of rig power or equipment failure while drilling or tripping. B. Injuries to personnel at the Drill Site C. Conditions which could reduce the stability and safety of the rig and production equipment: 1. Natural events: a. Excessive winds, rain and lightning b. Floods c. Subsidence d. Earthquakes 2. Other events a. Riots/Demonstrations b. Fire II. Notification Required: In the case of an emergency, as defined above, the permittee shall give immediate notice to the City of the occurrence of the emergency event. The City will provide the permittee with a list of phone numbers of City personnel to call for notification purposes. A written notice, including a detailed description of the emergency condition, and the actions take and/or proposed to be taken to correct the situation, shall be provided within 24 hours of the occurrence of the emergency event. SECTION 15 Exhibit D-1 1. Each of the above conditions is separately enforced, and if any of the conditions of approval is found to be invalid by a court of law, all the other conditions shall remain valid and enforceable. 2. The subject property shall be developed, maintained and operated in full compliance with the conditions of this grant and any law, statute, ordinance or other regulation applicable to any development or activity on the subject property. Failure of the permittee to cease any development or activity not in full compliance shall be a violation of these conditions. Exhibit D-2 Exhibit D-2 ADDITIONAL PROJECT CONDITIONS A. GENERAL E&B (herein “Operator”) is the owner and Operator of this project, responsible for implementing and complying with all applicable conditions. A-1 Project Description This Development Agreement, and associated conditions, is based upon and limited to the project described in Exhibit B to the Development Agreement. A-2 Acceptance of Conditions Execution of this agreement shall be deemed as acceptance of all conditions herein and waiver of any objections thereto. A-3 Costs of Implementing and Enforcing Conditions The Operator shall be fully responsible for all reasonable costs and expenses incurred by the City or any City contractors, consultants, or employees, in implementing, monitoring, or enforcing this approval, including but not limited to, costs for permitting, permit conditions implementation, mitigation monitoring, compliance monitoring, reviewing and verifying information contained in reports, undertaking studies, research and inspections, administrative support, and including the fully burdened cost of time spent by City employees on such matters. Draw-Down Account. The Operator shall maintain a draw-down account with the City, from which actual costs will be billed and deducted for the purpose of defraying the expenses involved in the City’s review and verification of the information contained in any required reports or plans and any other activities of the City, including but not limited to: enforcement, permitting, inspection, coordination of compliance monitoring, administrative support, technical studies, and the hiring of independent consultants. The initial amount to be deposited by the Operator shall be $500,000. In the first year, if withdrawals from the Exhibit D-2 account have reduced its balance to less than 50 percent of the amount of the initial deposit ($250,000), the Operator shall deposit $50,000 in supplemental funds within 30 business days of notification. After the first year, if the balance in the draw-down account is reduced at any time to $50,000 or less, the Operator shall deposit $50,000 in supplemental funds on each occasion that the account is reduced to $50,000 or less within 30 business days of notification. There is no limit to the number of supplemental deposits that may be required. At the discretion of the Operator, the amount of an initial or supplemental deposit may exceed the minimum amounts specified in this subsection. The City Manager or Designee may, from time to time, increase the minimum $50,000 figure to account for inflation or the City’s experience in obtaining funds from the account. Operator shall be entitled to reasonably review during normal business hours the expenditures from the deposit to ensure the expenditures are related to the Project. Should Operator object to an expenditure, Operator shall submit a request in writing to the City Manager for a detailed written explanation of the expenditure. Following receipt of the written explanation from the City and should Operator continue to object to payment of the expenditure, it shall file such objection in writing with the City Council explaining why such expenditure is not appropriate from the draw down account or why the amount of the expenditure is not appropriate for the work. Following City Council consideration of the matter and decision, the Council’s determination on the expenditure shall be final and binding on the parties. A-4 Substantial Conformity The Project shall be designed, constructed, and operated in substantial conformity with the Project Description in Exhibit B and all conditions of approval set forth in this Exhibit D. A-5 Conflicts Between Conditions In the event that any condition or mitigation measure contained in this development agreement is determined to be in conflict with any other condition contained herein, then where principles of law do not provide to the contrary, the condition most protective of natural environmental resources and public health and safety shall prevail to the extent feasible. A-6 Facility Throughput and Source Limits All facilities constructed under this approval shall be limited to the following maximum Exhibit D-2 production volumes: Phase 2 shall be limited to 800 barrels of oil and up to 250,000 standard cubic feet per day of gas. Phase 4 shall be limited to 8,000 barrels of oil per day and 2.5 million standard cubic feet of gas per day. A-7 Alternative Mitigation if Condition Invalidated If any condition of this project is invalidated by a court of law in a final adjudication, this approval shall be suspended pending imposition of a substitute condition or mitigation measure that will achieve equivalent results or reduction of impacts. A substitute condition or mitigation measure shall be incorporated into the Development Agreement in accordance with Section 4.2 of the Agreement- Changes and Amendments to Project before the suspension shall be lifted and the project is allowed to proceed. A-8 Applicability of Conditions to Construction and Operations These conditions are intended to apply to the E&B Project during both the construction and the operation of the permitted facilities. The term "operations" shall be understood to encompass both construction and operation phases unless such an interpretation would be inappropriate. A-9 Compliance Plans to have Same Force and Effect as Conditions All elements of the plans and programs required under this Exhibit D shall have the force and effect of a project condition. The remedies available to the City upon Operators failure to comply with such plans and programs includes but is not limited to those remedies which are available to the City upon Operator’s failure to comply with a project condition. A-10 Performance Security The Operator shall be subject to the following provisions: a. Performance Bond. Prior to issuance of the first drilling permit, the Operator shall provide to the City Manager or Designee, a faithful performance bond or financial instrument in a commercially reasonable amount to be determined by the City Manager taking into account existing bonds to the extent they overlap, payable to the City and executed by a corporate surety acceptable Exhibit D-2 to the City and licensed to transact business as a surety in the State of California to cover certain activities in the exploratory phase of the Project as follows:. The exploratory phase performance bond shall be conditioned upon the faithful performance by Operator of duties related to well abandonment, site restoration and environmental cleanup, and financing spill response connected with exploration. Should the Project proceed to the oil production phases of the Project, the Operator shall provide to the City Manager or Designee, a faithful performance bond or financial instrument in the sum to be determined by the City Manager, payable to the City and executed by a corporate surety acceptable to the City and licensed to transact business as a surety in the State of California Such bond shall be conditioned upon the faithful performance by Operator of duties related to well abandonment, site restoration and environmental cleanup, financing spill response and shall be in a format and include terms approved by the City Manager connected with the production phases of the project. These bonds shall be in addition to any other bond required by law (including without limitation Public Resources Code Sections 3202, 3204, 3205, 3205.2 and 3206 and 14 C.C.R. § 1722.8. These bonds shall satisfy the bond requirement in Section 23 of the Lease, and in the City Manager’s discretion, may satisfy the bond requirement in Condition E-1 below. b. Change of Operator. The performance bond(s) required above shall continue in force for one (1) year following any sale, transfer, assignment, or other change of Operator of the Project Site, or of the current Operator’s termination of activities at the Project Site. The City may release said bond prior to the end of the one (1) year period upon satisfaction by said Operator of all its obligations. Notwithstanding the foregoing, the performance bond shall not be terminated or released upon the sale, transfer, assignment, or other change of Operator until the new Operator has delivered a replacement bond complying with the provisions of this section. c. Funding Options. At its sole option, the City may accept Certificates of Deposit, Cash Deposits, or U.S. Government Securities in lieu of commercial bonds to meet the above bonding requirements on terms approved by the City Manager. B. PROJECT REVIEW B-1 Review by Community Development Director Prior to commencement of construction or operation for Phase 1, 2, 3 and 4, and for Exhibit D-2 subsequent modifications, Operator shall submit to Community Development Department relevant construction plans, engineering drawings and supporting text demonstrating compliance with the relevant conditions of this approval. Construction or operation may not commence until City has reviewed and approved the appropriate submittal, consistent with applicable conditions. The City agrees to make a good faith attempt to review the submittal for completeness as expeditiously as possible, which may involve retaining consultants with the appropriate technical expertise to review the submittal, and to provide a list of deficiencies. When the submittal is deemed complete, the City agrees to provide written notice of approval of construction plans as expeditiously as possible, or indicate in writing the conditions which have not been met, or notify the permittee that the Community Development Director review shall be completed within a period of time specified by the City, based on sound engineering practices. When such conditions have been met and city confirms in writing, construction or operation may be commenced. The City may require post-construction inspections or review of as-built drawings, as necessary to confirm consistency with the approved submittal. B-2 Condition Scheduling Conflicts In the event that scheduling requirements among or between conditions in this approval (or with this approval and conditions imposed by other agencies) conflict with respect to timing, Community Development Department (in consultation with other departments, agencies, and Operator as appropriate) shall resolve such conflict. B-3 Authority to Begin Construction Operator shall not commence construction without written confirmation from Community Development Director, or designee, that all conditions which require approval prior to construction of Phase 1, Phase 2, and Phase 3, as specified by this approval, have been satisfied. B-4 Authority to Begin Operations After construction and prior to start-up, Operator shall not commence operations without written confirmation from Community Development Director, or designee, that all conditions which require approval prior to start-up, as specified by this approval, have been satisfied. Formatted: No underline Formatted: No underline Formatted: No underline Formatted: No underline Exhibit D-2 Start-up, for purposes of this condition, is defined as the introduction of hydrocarbons into the facility production equipment for both Phase 2/4. C. MANAGEMENT AND MONITORING C-1 Environmental Quality Assurance Program (EQAP) Under EM-1 below in Exhibit D-3, Operator is required to provide funding for implementation and administration of an environmental monitoring program, including an environmental monitor (“Monitor”), to ensure compliance with the environmental conditions of approval. The Monitor shall assist in condition compliance and mitigation monitoring for all applicable construction and operational stages of the project. The monitor shall be under contract with the City and funded by the Operator. 1. In accordance with EM-1, the Monitor will create a monitoring program for the project that includes a post-construction component to monitor measures that extend beyond the construction period and the operational phase of the project. 2. The Monitor will prepare a working monitoring plan that reflects the approved environmental mitigation measures and conditions of approval. The monitor’s plan will include: a. Goals, responsibilities, authorities, and procedures for verifying compliance with environmental mitigations; b. Lines of communication and reporting methods; c. Daily and weekly reporting of compliance; d. Construction crew training regarding environmental sensitivities; e. Authority to stop work; and f. Action to be taken in the event of non‐compliance. 3. Under EM-1 and other conditions, Operator is also responsible for funding work required by permit conditions requiring use of individuals with special expertise (e.g., geologist, noise engineer, etc.). The Monitor will coordinate the monitoring efforts of the specialists, including communication with the City and responsible Agencies, reporting and availability (at appropriate times: prior to issuance of construction permits, or during construction, as required by applicable permit conditions). To assist the Monitor in creating and implementing its working monitoring plan, Operator shall prepare and obtain Community Development Department approval of an Environmental Quality Assurance Program (EQAP) prior to commencement of Phase 1 construction Exhibit D-2 activities, and obtain Community Development Department approval of a revised EQAP prior to commencement of Phase 2, Phase 3, construction activities and Phase 4, Operations. The approved EQAP and all approved revisions to the EQAP shall be submitted to the Monitor prior to commencement of each Project phase. This EQAP shall encompass both construction and operations phases of the E&B Project, and shall describe the steps Operator will take to assure compliance with the conditions contained in the approval for this project. The EQAP is intended to provide a monitoring and reporting framework for compliance with all conditions, programs and plans specified by these conditions and the mitigation measures. As such, it will become a comprehensive reference document for the City, the Monitor, other agencies, and the public regarding the E&B Project. The EQAP shall include, without limitation: a. All plans, as required by these conditions and mitigation measures, relevant to construction and operation of the permitted facilities (including the Risk Management Program, SIMQAP, Emergency Response Plan, Hazardous Material and Waste Management Plan, Site Security Plan, and Fire Protection Plan). To the extent there is any overlap or redundancy between plans required under Exhibits D-2 and D-3, upon E&B request the Monitor may in its discretion authorize E&B to combine required plans into one submittal; b. Provisions for regularly communicating with and reporting to the Monitor; c. Provisions for ensuring knowledge of and compliance with these conditions; d. Provisions for the submittal to Community Development Department and the Monitor of monthly compliance reports throughout construction and annual summary reports during operations unless more frequent reporting is deemed necessary by Community Development or the Monitor. Upon receipt of compliance reports, Community Development Department or the Monitor shall advise Operator of what additional compliance items require reporting prior to the next report. These compliance reports shall describe: 1. Project status, including but not necessarily limited to: i. the extent to which construction has been completed on various project phases Exhibit D-2 ii. the background and experience of the construction labor force iii. the rate of production/throughput during operation, iv. environmental planning and implementation efforts, and v. any revised time schedules or timetables of construction and/or operation that will occur in the next one-year period. 2. Condition compliance, including but not necessarily limited to the results of the specific mitigation requirements identified in these conditions and any compliance plans. 3. Results and analyses of all data collection efforts being conducted by Operator pursuant to these permit conditions. d. Copies of all local, state, and federal permits relative to the E&B Project, and any amendments thereto. The EQAP shall be updated regularly to include all up-to-date compliance plans required under these conditions of approval. C-2 24-Hour Emergency Contact Prior to issuance of the Permit for Phase 1, Operator shall provide to the Community Development Department and the City Fire Department the current name and position, title, address, and 24-hour telephone numbers of the person in charge of the facility, person in charge of construction, and other representatives who shall receive all orders and notices, as well as all communications regarding matters of condition and permit compliance at the site and who shall have authority to implement a facility shutdown pursuant to this agreement or other City ordinances. There shall always be such a contact person(s) designated by the Operator. One contact person shall be available 24 hours a day in order to respond to inquiries received from the City, or from anyone in case of an emergency. If the address or telephone number of Operator’s agent should change, or the responsibility be assigned to another person or position, Operator shall provide to Community Development Department the new information within 24 hours of the effective date of such change. Exhibit D-2 C-3 Operator to Provide Copies of Permits to Community Development Department Operator shall furnish to Community Development Department and Monitor copies of all local, state, and federal permits relative to the E&B Project within 30 days of receipt by Operator. C-4 Pipeline Construction Confined to Right-of-Way All pipeline construction activities, including work areas and staging and storage areas of pipe, shall be confined to the area defined in the encroachment permit. C-5 Capacity and Throughput Reports Operator shall report to Community Development Department and Monitor the volumes and rates of: (1) inlet volumes; (2) transferred for sales into the Southern California Gas Company transmission line; and (3) Oil volumes transported to Pipeline. Reports shall be made on at least a monthly and annual basis and supporting documentation will be provided upon request from Community Development Department or Monitor. Upon approval from the Community Development Director and the Monitor, these reports may be combined with and submitted at the same time as Royalty Statements under Section 4 of the Lease. C-6 Risk Mitigation Program A Risk Management Program to substantially reduce the risks of project-related accidents which may result in loss of life and/or injury, and damage to property and/or the natural environment shall be submitted for approval to the Hermosa Beach City Community Development, Fire and Public Works Departments. Other City departments, as deemed necessary, may be consulted. All reasonable costs associated with this City review shall be borne by Operator. Operator shall be entitled to participate fully in the review process. The Program shall include all appropriate construction plans, Process Hazards Analyses (PHA), and Hazard and Operability Studies (HAZOPs) for the proposed facility and ancillary equipment to the City who may employ a third-party technical review in order to evaluate project design and help identify possible design hazards prior to issuance of ministerial permits. The HAZOPs shall be reviewed and approved by the City prior to construction for Exhibit D-2 each Phase of the project. This review shall also evaluate all mitigation identified in the EIR. The City may require as-built inspections and the submittal of as-built drawings for approval prior to the operation of any plant modifications. C-7 Safety Inspection, Maintenance And Quality Assurance Program Operator shall submit a detailed Safety Inspection, Maintenance and Quality Assurance Program (SIMQAP) for all facilities and pipelines which shall be implemented during construction and operations. Separate SIMQAP plans may be submitted for Phase 1 and Phase 2/3/4 activities. The SIMQAP shall be reviewed and approved by the City, including the Hermosa Beach City Community Development Department, Hermosa Beach Fire Department and the Monitor. Other City departments, as deemed necessary, may be consulted. The SIMQAP for construction shall be approved prior to construction, and the SIMQAP for operation shall be approved prior to operation for each Phase of the project. The plan is a dynamic document and, as such, updates including new procedures, safety and maintenance technologies and processes, shall be reviewed jointly by Operator and the City. The SIMQAP shall be revised as appropriate. The SIMQAP shall include, but not be limited to, evaluation of staffing levels for safe operation of the plant in emergency situations, establishing procedures for review of safety inspection records, regular maintenance and safety inspections, periodic safety audits, development of safety system testing protocols, training and experience standards for personnel and use of simulation techniques in training programs, inspections of all trucks carrying hazardous and/or flammable material prior to loading, monitoring of critical safety devices and systems, and review of the routing of all trucks carrying hazardous material. Operator shall implement the approved plan and shall provide for involvement of the Monitor, City staff, or its consultants in all inspections as appropriate. Prior to construction and operations, Operator shall demonstrate that employees (and subcontractors) are trained in the safety, inspection, maintenance and operations requirements of the project. All costs associated with this review process shall be borne by Operator. C-8 Emergency Response Plan Operator shall submit to the applicable City Departments and the City Fire Department an Emergency Response Plan (ERP) that addresses response procedures to be implemented by Operator for accidental events that pose significant threats to public health and safety, property, or the environment. Exhibit D-2 The ERP shall be reviewed and approved by the City Fire, Community Development and Public Works Departments prior to commencement of drilling operations. Separate ERPs may be required for Phase 1 and Phase 2/3/4 activities. The ERP shall include specific measures to avoid impacts on cultural resources, sensitive habitats, and sensitive biological resources identified in the project EIR whenever possible without affecting emergency response. Operator shall demonstrate the effectiveness of its ERP by responding effectively as determined by Fire to one emergency response drill prior to Phase 1 and prior to approval of the Plan by Fire. The ERP shall be submitted sufficiently prior to Operator’s projected start-up date so as to allow reasonable time for review and the planning of a drill required prior to ERP approval. The ERP shall be a dynamic document and, as such, shall be jointly reviewed by the City and Operator, and revised when warranted to incorporate new planning strategies or procedural changes, new technologies, and the acquisition of more effective, feasible response equipment as it becomes available. Any changes shall be submitted to the City Fire, Community Development and Public Works Departments for their review and approval, prior to implementation. Operator shall demonstrate the ongoing effectiveness of the ERP by responding to no more than two surprise drills each year which may be called by the City. If critical operations are underway, Operator need not respond to the drill at that time but shall explain the nature of the critical operations and why response is not possible. The City may then call for an additional surprise drill in the same year. Operator shall implement all reasonable changes based on review of drill performance, which will further enhance overall emergency response planning and capabilities. Upon E&B’s request and written approval from the Monitor, this plan may be combined with the emergency response plan required under FP-1d and FP-1e below. C-9 Hazardous Material and Waste Management Plan Prior to start-up, Operator shall submit a Hazardous Material and Waste Management Plan (HMWMP) to the City Fire Department and Community Development Department for all facilities. The HMWMP shall be reviewed and approved by Fire and Community Development prior to start-up. The Plan shall demonstrate compliance with the provisions of the Uniform Fire Code as adopted in Chapter 15 of the Hermosa Beach Municipal Code and the provisions of the Exhibit D-2 Health and Safety Code §25500 et seq, Chapter 6.95 Business Plan Requirements, with the exception of emergency response procedures which are complied with above. The Hazardous Material and Waste Management Plan shall include but not be limited to the following: a. Locations and methods for storing hazardous materials and wastes, both within the facility and along the OIL pipeline right-of-way. b. Treatment procedures, or justification where none are used, to reduce the hazardous nature of the materials before they are permitted to leave the site. c. Specific routes for transportation of hazardous waste materials to Class I disposal sites consistent with City policy. d. Letter of commitment that the materials are transferred by a carrier licensed in hazardous material transport. e. Letter of commitment ensuring complete accounting of intake, processing, and exit of hazardous material and wastes. f. Detailed description of a monitoring system to be installed, capable of detecting hazardous material and wastes that may escape from primary storage devices. g. A revised Hazardous Materials Business Plan which accurately reflects the revised chemical inventory of the project site to Environmental Health Services for review and approval, in accordance with the California Health & Safety Code, Chapter 6.95, Section 25,500 et seq. The HMWMP shall be a dynamic document and, as such, shall be jointly reviewed by the City and Operator, and revised when parties mutually agree it is warranted to incorporate new planning strategies, changes in procedures, new technologies, or changes in materials, or when required by law. Any changes requested by Operator or City shall be submitted to Fire and Community Development for their review and approval, prior to implementation. C-10 Site Security Plan Exhibit D-2 Prior to issuance of a Permit for Phase 1, Operator shall submit to the Community Development and the Hermosa Beach City Police Department for review and approval a site security plan. The plan shall describe the procedures to be implemented by Operator which will prevent intentional damage to the drilling and production facilities which may result in environmental damage or public safety hazards. The plan shall include placement of security cameras to the satisfaction of the Community Development and Police Departments, and employment of security personnel at all times during drilling stages (24 hours) (see condition 3.2 in D-1) and employment of security personnel from dusk until dawn at all other times. The plan shall be reviewed and revised as warranted to require incorporation of new planning strategies, new technologies or changes in plant operation, and changes in notification procedures. C-11 Fire Protection Plan All E&B Project facilities shall have fire protection features installed in accordance with the provisions of an E&B Project Fire Protection Plan (FPP), and as such features may be required under this Exhibit D. All facilities, construction activities, process equipment, and fire protection equipment shall comply with the standards of the National Fire Protection Association (NFPA), American Petroleum Institute, Uniform Fire Code as adopted in Chapter 15, Building and Construction of the Hermosa Beach Municipal Code, and the Hermosa Beach City Fire Department. In the event of a conflict between these standards, the Fire Marshal, in consultation with the Operator, shall make a cost/benefit decision regarding which standards apply. Prior to construction, Operator shall receive Fire Department approval of an FPP which addresses both construction and operation of the E&B Project. Operator shall distribute copies of the approved contingency plans to applicable City Departments and the City Fire Department. All plan recipients are to be notified of contingency plan changes via formal contingency plan updates. Separate FPPs may be submitted for Phase 1 and Phase 2/3/4 activities. The FPP shall include, but may not be limited to, discussions of the following: Onsite firefighting equipment and systems Fire and detection Access Vegetation management Exhibit D-2 Employee training and safe practices Process control and monitoring analysis Drainage and containment Safety, inspection (including City inspectors) and maintenance practices Upon E&B’s request and written approval from the Monitor, this plan may be combined with the emergency response plan required under FP-1d and FP-1e below. C-12 Prevention of Internal Pipeline Corrosion Operator shall implement techniques to prevent internal corrosion in accordance with the requirements of the California State Fire Marshal (Title 5 §51010-5-019 of the California Government Code), 49 CFR 192 Parts 150, 475 and 477, and 49 CFR 195.418 as part of the Oil and pipeline maintenance procedures. The internal inspection records shall be submitted to and reviewed by the appropriate governmental agencies. Such activities shall include routinely scheduled pigging of the pipeline to remove pockets of accumulated fluids that contribute to internal corrosion (such as hydrogen sulfide, carbon dioxide, and water), the use of corrosion inhibitors and corrosion coupons, and periodic testing by a state-of-the-art "smart pig" to identify areas where corrosion, pipewall thinning, dents, cracks and other defects have occurred. Specific measures are discussed below: a) Whenever any section of the pipelines are removed for any reason, they shall be inspected for possible internal corrosion and records retained for inspection by the State Fire Marshal. b) The pipeline shall be tested with a state-of-the-art "smart pig" to identify areas where corrosion, pipewall thinning, dents cracks and other defects have occurred. State-of- the-art pigging will be capable of defining wall-thickness contours around any area of reduced wall thickness. The smart pigging will be done prior to operation of the Oil and natural gas pipelines and at a subsequent interval to be determined by the California State Fire Marshal. A program of maintenance shall be developed to ensure that permits to perform the work are obtained as soon as possible and that pipeline defects are rectified within one month of securing the necessary permits for severe defects, and within six months for moderate defects. This procedure shall be noted in the SIMQAP and receive approval by the SSRRC prior to operations of either the OIL or natural gas pipelines. Exhibit D-2 C-13 Prevention of External Pipeline Corrosion Operator shall undertake the following provisions to avoid external pipeline corrosion: a) The Oil and natural gas pipelines shall be coated to reduce the potential for external corrosion. Final selection of pipeline coating will be demonstrated, to the satisfaction of the California State Fire Marshal, that the selected coating would provide the maximum level of protection of available coatings for all expected operating conditions; and b) A baseline pipe-to-soil cathodic profile and reading shall be obtained after the pipeline has been installed, but before any cathodic protection facilities are connected. Other utilities shall disconnect their bonds as well. This measure shall be included on the construction plans which shall be reviewed by the City. C-14 Pipeline Hydrotesting The oil and natural gas pipelines shall be hydrotested prior to operation, and every five years thereafter or sooner if warranted by major ground movement that has the potential to undermine the structural integrity of the pipeline. This procedure shall be noted in the SIMQAP which shall be reviewed and approved prior to operations. C-15 Structural Support for Underground Utilities Operator shall provide structural support for underground utilities in and near the construction area during work in the trench and backfilling operations to prevent damage to such facilities during construction activities. C-16 Underground Utility Damage Operator shall halt work in the immediate vicinity in the event of inadvertent damage to an underground utility, until the owner of the utility has been contacted and repairs have been effected. C-17 Underground Pipeline Warning Marker Exhibit D-2 A plastic ribbon or other suitable material shall be buried 12 to 18 inches above the oil and natural gas pipelines and shall cover the length of the pipeline. The material shall be brightly colored and be labeled with a warning that this area contains a hazardous liquid pipeline trench. This measure shall be noted on the design and construction plans to be reviewed and approved by the City. C-18 Pipeline Route Warning Signs The entire pipeline route shall be marked with pipeline warning signs a minimum of every 500 feet. Spacing of markers may be greater in agricultural areas provided markers are clearly within sight of each other. Bright colored markers shall be installed above new pipelines that extend offsite of the proposed facility. This type of measure helps reduce the likelihood of external mechanical interference, of which third party damage associated with excavation near the pipelines is the most common cause of pipeline failures. C-19 Underground Service Alert Notification Operator shall notify owners through the office of Underground Service Alert of any underground facilities (including electrical, water, petroleum pipelines, fiber-optics and agricultural water delivery and drainage pipelines) 48 hours in advance of excavation in the vicinity of these facilities. Operator shall have an electrical contractor on-call at all times during construction near the potentially affected facility to repair any circuits if required by the owner in the event they are damaged during construction. The appropriate response to hazards associated with damage to natural gas pipelines will be determined in consultation with Southern California Gas Company. The City Fire Department shall be notified of the schedule for construction activities in the vicinity of natural gas and other oil pipelines. C-20 Finished Pipeline Route Maps Upon completion of pipeline construction, Operator shall provide all jurisdictional agencies with at least two copies of maps showing the finished pipeline route and shall include locations accessible by fire department emergency response vehicles. Said maps shall be 7 1/2 minute quadrate scale, (one inch equals 24,000 inches), and shall represent topographical features. C-21 Supervisory Control and Data Acquisition and Emergency Shutdown Systems Exhibit D-2 The pipeline supervisory control and data acquisition (SCADA) and Emergency Shutdown (ESD) systems, including inspection, maintenance and quality assurance procedures for the SCADA and ESD systems, shall be reviewed and approved by the Fire Department and the Building Department and Public Works Department prior to operations of either the oil or natural gas pipelines, and as appropriate thereafter. The SCADA and ESD systems shall comply with the provisions of Fire Department Development Standard No. 7 and the National Electrical Code Article 760. Operator shall conduct a comprehensive safety and reliability analysis of the SCADA system as well as the processing facility and oil and natural gas pipelines control room prior to commencement of pipeline operations, and as appropriate thereafter. The analysis shall meet or exceed the guidelines developed by the Institute of Electronic and Electrical Engineers. Any improvements identified in the study shall be included in the suggested hardware and software. Results of the study shall be provided to the Community Development Department. Company shall design the project such that the entire project will integrate the supervisory control and data acquisition (SCADA) or other monitoring system for all the components of this project in a manner so as to provide timely and efficient detection, shutdown, notification and response to an emergency involving any of the project components. Any break, rupture, and/or damage to the facilities shall result in the orderly shutdown of the pumping operations, and will activate the shut off valves in a manner which will minimize environmental damage. C-22 Update of Operational Risk Assessment Upon City request, Operator shall fund the updating of the operational risk assessment subject to ministerial permitting, as needed, so that any surrounding land use proposals are aware of existing risk, if any. D. FACILITY DESIGN D-1 Submittal of As Built Drawings Within one year after initial start-up of the E&B Project (Phase 1), and again within one year Exhibit D-2 of commencement of Phase 2 operations, Operator shall submit as-built drawings of the entire facility(s) to City. Any facility modifications required for Phase 3 operations shall also be documented on facility as-built drawings within one year of their construction. Operator shall submit as many sets of drawings (up to ten sets) as requested by the Community Development Department. D-2 Solid Waste Disposal Solid waste generated on the site shall be collected by the City’s franchised commercial trash hauler. Construction waste shall be transported by E&B’s own efforts to a facility authorized to accept construction waste in accordance with the provisions of the Hermosa Beach Municipal Code. Hazardous waste shall be transported by E&B’s own efforts to a facility authorized to accept hazardous waste in accordance with all local, state and federal laws. D-3 Water Conservation Measures The design of all new and/or modified onsite facilities shall incorporate the use of cost- effective water-conserving fixtures, including by way of example indoor and outdoor plumbing fixtures and irrigation. D-4 Energy Conservation Measures Throughout the project life, as equipment is added or replaced, cost-effective energy conservation techniques shall be incorporated into project design, including by way of example indoor and outdoor lighting, HVAC, drill equipment, vehicles, and microturbines. E. ABANDONMENT E-1 Abandonment Procedures In implementing Section 26 of the Lease and Article VII of the Hermosa Beach Municipal Code - Oil Code Chapter 21A, Operator shall secure all necessary permits and proceed in accordance with a City Council approved abandonment and restoration plan within one year of permanent shut down. The abandonment plan shall be processed with environmental Exhibit D-2 review of the plan. Operator shall post a performance bond, or other security device acceptable to City Council, prior to commencement of Phase 1 construction for estimated costs of abandoning Phase 1 facilities. Operator shall also post a performance bond, or other security device acceptable to City Council, prior to commencement of Phase 2 for estimated costs of abandoning Phase 2 facilities. E-2. Abandonment Costs All costs associated with abandonment or removal shall be borne by Operator. E-3. Wellsites Prior to permanent shutdown or termination of this agreement or the lease, any well drilled by Operator shall be plugged and abandoned within three months from the date it is determined that such well is no longer capable of production, subject to weather and rig availability, and capped, in accordance with the rules and regulations of the State Division of Oil, Gas & Geothermal Resources. Thereafter, the wellsite shall be restored as near as practicable to its original condition. F. Miscellaneous Conditions F-1. Hydraulic Fracturing Prohibited The use of hydraulic fracturing as a well stimulation technique for enhanced hydrocarbon production shall be prohibited on the project site. F-2. Pipelines All pipelines installed for the Project shall not go below the depth authorized by the State Division of Oil, Gas & Geothermal Resources. After completion of the construction of any such pipelines, Operator shall restore the surface of the area impacted by the construction of such pipeline as nearly as practicable to its condition immediately prior to such construction. F-4. Fire Marshal Position Operator shall fund a full-time dedicated Fire Marshal position for the Hermosa Beach Fire Exhibit D-2 Department for the full Term of the Development Agreement. F-5. Training Operator shall pay for annual training for Hermosa Beach Fire Department personnel and fire personnel from the City’s automatic aide partners on fighting oil fires. F-6. Odor (from HIA) In the event of frequent reports of odor emanating from the site, Operator shall pay for additional studies and/or periodic air monitoring. If the studies or monitoring indicate that additional control measures should be implemented to reduce the frequency of noticeable odors, Operator shall include those measures as project conditions. F-7. Notice (from HIA) During Phase 3 pipeline construction, Operator shall provide written notification of impending construction activities, including the dates and times of activities that may produce excessive noise, to all residents within 100 feet of the construction activities. Notice shall be provided no less than 72 hours before construction begins. F-8. Light impact reduction (from HIA) Operator shall pay for or provide black-out blinds or curtains for bedrooms with direct line- of-sight to the exposed side of the electric drill rig that will be lit at night. The amount of payment or the brand of blinds/curtains shall be pre-approved by the City Manager, and may be provided through a direct mail program. F-9. Community Relations (from HIA) As recommended in Intrinsik’s Health Impact Assessment for the project, and at the City Council’s discretion, the Operator may be required to pay for the costs associated with (1) organizing a Community Liaison Committee; (2) a follow-up Community Health Assessment; and/or (3) a quality of life health survey. Exhibit D-2 Exhibit D-2 [Continue to following page for Mitigation Measures] Exhibit D-3 EXHIBIT “D-3” Mitigation Measures/Mitigation Monitoring Plan from Section 8.0 of FEIR (as revised at Hermosa Beach City Council certification hearing on July 8, 2014 per Resolution 14-6908). 8.0 Summary of Mitigation Measures and Mitigation Monitoring Plan 8.1 Mitigation Monitoring Program As the Lead Agency under the California Environmental Quality Act (CEQA), the City of Hermosa Beach (City) is required to adopt a program for reporting or monitoring regarding the implementation of mitigation measures for this Project, if it is approved, to ensure that the adopted mitigation measures are implemented as defined in this Environmental Impact Report (EIR). This Lead Agency responsibility originates in Public Resources Code Section 21081.6(a) (Findings) and the CEQA Guidelines Sections 15091(d) (Findings) and 15097 (Mitigation Monitoring or Reporting). 8.2 Monitoring Authority and Enforcement Responsibility The purpose of a Mitigation Monitoring, Compliance, and Reporting Program (MMCRP) is to ensure that measures adopted to mitigate or avoid significant impacts are implemented. A MMCRP can be a working guide to facilitate not only the implementation of mitigation measures by the Project proponent, but also the monitoring, compliance, and reporting activities of the City and any monitors it may designate. The City may delegate duties and responsibilities for monitoring to other environmental monitors or consultants as deemed necessary, and some monitoring responsibilities may be assumed by responsible agencies, such as affected jurisdictions and cities. The number of monitors assigned to the Project will depend on the number of concurrent activities and their locations. The City or its designee(s), however, will ensure that each person delegated any duties or responsibilities is qualified to monitor compliance. Any mitigation measure study or plan that requires the approval of the City must allow at least 60 days for adequate review time. When a mitigation measure requires that a mitigation program Exhibit D-3 be developed during the design phase of the Project, the Applicant must submit the final program to City for review and approval for at least 60 days before any activity begins. Other agencies and jurisdictions may require additional review time. It is the responsibility of the environmental monitor assigned to the Project to ensure that appropriate agency reviews and approvals are obtained. The City or its designee will also ensure that any deviation from the procedures identified under the monitoring program is approved by the City. Any deviation and its correction shall be reported immediately to the City or its designee by the environmental monitor assigned to the Project. The City is responsible for enforcing the procedures adopted for monitoring through the environ- mental monitor assigned to the Project. Any assigned environmental monitor shall note problems with monitoring, notify appropriate agencies or individuals about any problems, and report the problems to the City or its designee. 8.3 Mitigation Compliance Responsibility The Applicant is responsible for successfully implementing all the mitigation measures in the MMCRP, and is responsible for assuring that these requirements are met by all of its contractors and field personnel. Standards for successful mitigation also are implicit in many mitigation measures that include such requirements as obtaining permits or avoiding a specific impact entirely. Other mitigation measures include detailed success criteria. Additional mitigation success thresholds will be established by applicable agencies with jurisdiction through the permit process and through the review and approval of specific plans for the implementation of mitigation measures. 8.4 General Monitoring Procedures Environmental Monitors. The City and the environmental monitor(s) are responsible for integrating the mitigation monitoring procedures into the construction or operation process in coordination with the Applicant. To oversee the monitoring procedures and to ensure success, the environmental monitor assigned to the Project must be on site during that portion of the construction or operation that has the potential to create a significant environmental impact or other impact for which mitigation is required. The environmental monitor is responsible for ensuring that all procedures specified in the monitoring program are followed. Exhibit D-3 Construction and Operations Personnel. A key feature contributing to the success of mitigation monitoring will be obtaining the full cooperation of construction and operations personnel and supervisors. Many of the mitigation measures require action on the part of the supervisors or crews for successful implementation. To ensure success, the following actions, detailed in specific mitigation measures, will be taken: Procedures to be followed by construction or operations companies hired to do the work will be written into contracts between the Applicant and any contractors. Procedures to be followed by construction and operations crews will be written into a separate document that all personnel will be asked to sign, denoting agreement. One or more meetings will be held to inform all and train personnel about the requirements of the monitoring program. A written summary of mitigation monitoring procedures will be provided to supervisors for all mitigation measures requiring their attention. General Reporting Procedures. Site visits and specified monitoring procedures performed by other individuals will be reported to the environmental monitor. A monitoring record form will be submitted to the environmental monitor by the individual conducting the visit or procedure so that details of the visit can be recorded and progress tracked by the environmental monitor. A checklist will be developed and maintained by the environmental monitor to track all procedures required for each mitigation measure and to ensure that the timing specified for the procedures is adhered to. The environmental monitor will note any problems that may occur and take appropriate action to rectify the problems. Public Access to Records. The public is allowed access to records and reports used to track the monitoring program. Monitoring records and reports will be made available for public inspection by the City or its designee on request. 8.5 Mitigation Monitoring Table The Tables below present a summary of monitoring and reporting plan requirements for the mitigation measures identified in Chapter 4 of the EIR as applicable to the Proposed Project. The Table provides the following information, by column: Mitigation Measure (description of the mitigation measure identified in Chapter 4); Monitoring/Plan Requirements (monitoring or plan requirements necessary to verify compliance with the mitigation measure); Exhibit D-3 Method of Verification (this is how the responsible agency can determine if the mitigation measure has been implemented); Timing (this identifies when action needs to be taken on mitigation measure); and Responsible Agency (this is the agency that is responsible for assuring compliance with the mitigation measure). Table 8-1 Aesthetics and Visual Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party EM-1 Prior to issuance of the first grading and/or construction permits, the Applicant shall enter into agreements with the City to provide funding for the implementation and administration of an environmental monitoring program, including an environmental monitor, to ensure compliance with each Agency’s environmental Conditions of Approval. The monitor shall assist the Agencies in condition compliance and mitigation monitoring for all applicable construction and operational stages of the Oil Project, as specified in a scope of work, as approved by the Agencies. The monitoring program shall include a post‐construction program to monitor measures that extend beyond the construction period (e.g., success of landscaping, etc.), as well as monitor certain mitigation measures required during the operational phase. The monitor will prepare a working monitoring plan that reflects the Agencies ‐ approved environmental mitigation measures/conditions of approval. This plan will include: 1. Goals, responsibilities, authorities, and procedures for verifying compliance with environmental mitigations; 2. Lines of communication and reporting methods; 3. Daily and weekly reporting of compliance; 4. Construction crew training regarding environmental sensitivities; 5. Authority to stop work; and 6. Action to be taken in the event of non‐compliance. The environmental monitor shall be under contract to the Agencies. Costs of the monitor, monitoring program, and any Agency administrative fees, shall be paid by the Applicant. The Applicant shall also be responsible for funding work required by permit conditions requiring use of individuals with special expertise (e.g., geologist, Conditions included within the Development Agreement, including administrative measures to ensure bonding, payment methods and insurance Before the start of Phase 1 City of Hermosa Beach Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party noise engineer, etc.). The Agencies’ environmental monitor will coordinate the monitoring efforts of the specialist, including communication with the Agencies, reporting and availability (at appropriate times: prior to issuance of construction permits, or during construction, as required by applicable permit conditions). AE-1a Material choice of electrical drill rig acoustical shroud shall be of neutral sky color which is selected for its ability to reduce visual impact, in coordination with and approval by the City Community Development Director. Approval of Construction Documents and Specifications and field- demonstration Prior to issuance of permits City of Hermosa Beach AE-1b The sound attenuation wall shall be replaced by a permanent wall with design features installed at the end of Phase 3. The intent is to provide stability of views and opportunities for positive visual elements that partially mitigate the visual presence of the walls from the Hermosa Greenbelt and other sensitive views in the immediate Project vicinity. The permanent wall shall be allowed to be provided in lieu of the 16-foot block wall. Landscape design shall be allowed to be adjusted to respond to façade articulations, though quantities and densities shall be maintained. The permanent wall shall be designed with architectural features in coordination with and approval of the City Community Development Director. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2a Design of the sound attenuation wall exterior façade shall be required to include design articulations that are complementary to the character, scale, and quality of the surrounding environment. The intent is to mitigate the visual impact of the wall from the Hermosa Greenbelt and other sensitive views in the immediate project vicinity. The following measures of success shall be met: 1) Articulations of façade decrease scale and proportion of mass into smaller increments that more closely resemble those of adjacent buildings; and 2) Colors, detailing and material use are varied to a level consistent with existing visual environment. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party AE-2b Planting area growth medium shall be capable of supporting the long term health and growth of the landscape design. Requirements shall be: 1) Demonstrated free of debris and construction waste (asphalt, concrete, etc) to a minimum depth of 3 feet within all planted areas. Wall footings shall be designed to limit encroachment into planted areas; 2) Soils analysis report shall be conducted by a certified soil scientist. Report shall include recommendations to meet the intent of this mitigation measure; and 3) If soils are determined to be unsuitable to support plant growth, they shall be amended or removed/replaced to meet requirements of soils analysis for plant pallette selected. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2c Vine plantings where used shall meet the following conditions: 1) be self- attaching or structure supported; 2) have demonstrated success in the City; 3) be planted at a density to achieve full coverage at maturity; 4) be planted at a minimum 5 gallon size; and 5) be required on the visible portion of the west wall at the temporary parking facility. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-2d All trees shall be required to be a minimum of 20’ in height at installation and meet the American Standard for Nursery Stock (ANSI Z60.1-2004). If a tree species alternate is proposed, it shall be required to be an equal to the species proposed in the Project Application in the following characteristics: 1) Dense evergreen with similar form and habit; 2) Probability of achieving a minimum of 35-40 feet at maturity; and 3) Comply with Municipal Code Chapter 8.60 and 8.56. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-3a Pipeline alignments and valve box locations shall be designed to avoid the removal or modification of trees, hedgerows, and/or large shrubs to the extent feasible. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Hermosa Beach, Redondo Beach, and Torrance Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party AE-3b If landscaped areas, streetscapes, plazas and/or parklands are required to be temporarily disturbed, they shall be restored to their previous condition following completion of construction. Avoidance of disturbance shall be the preferred option, especially where landscape elements act to screen views (hedges, large shrubs, etc) or where they act as community gateways (Redondo Beach at Hwy-1). Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Hermosa Beach, Redondo Beach and Torrance AE-3c Block color/s selection and pattern (if applicable) shall be complementary to adjacent buildings. A buffer of shrubs and vines shall be planted to match the existing character and quality of the adjacent properties. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Hermosa Beach, Redondo Beach and Torrance AE-4a Final acoustical cover material selection shall be required to be fully opaque. Fully opaque shall be defined as completely blocking all light from passing through its surface. The exterior finish shall be low reflectivity and not capable of producing glare. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-4b Colors and finishes of equipment and surfaces within the soundwall (including the interior face of the soundwall, the interior face of the drill rig acoustical cover, and the physical structure of the drill rig within the acoustical shield) shall have a reflectivity rating of 0.3 or lower. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-4c All proposed site lighting fixtures associated with the drilling activities shall demonstrate compliance with the mandatory B-U-G ratings for area lighting as required by CalGreen mandatory measures in the 7/1/2012 supplement. The Lighting Zone used to demonstrate compliance shall be LZ-2. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5a Colors and finishes of surfaces within the facility, including the interior face of the soundwall, ground materials (darker or asphalt), wall paints and equipment Approval of Construction Prior to issuance of City of Hermosa Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party paints to the extent feasible shall have a low reflectivity rating of 0.3 or lower to reduce the potential for glow. Documents and Specifications and Inspection permits and during construction Beach AE-5b Final sound wall material/s selection/s (including gates) shall be fully opaque. Fully opaque shall be defined as completely blocking all light from passing through its surface. The exterior finish shall be low reflectivity and not capable of producing glare. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5c All proposed site lighting, including fixtures outside the wall, shall be fully shielded. Fully shielded shall be defined as: A luminaire constructed and installed in such a manner that all light emitted by the luminaire, either directly from the lamp or a diffusing element, or indirectly by reflection or refraction from any part of the luminaire, is projected below the horizontal plane through the luminaire’s lowest light-emitting part (IES/IDA, 2011) Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5d The LZ-2 parameters of the Model Lighting Ordinance (IES/IDA, 2011) shall be used to demonstrate that maximum vertical illuminance for the site are not exceeded. For site lighting inside the wall, Table B allowances shall be used. Lighting outside the wall at site entrances shall not exceed that of existing street lighting, which produces a maximum of 1 footcandle. For the purposes of measuring vertical illumination, the plane of the property line shall be extended to an elevation equal to the height of the electric drilling rig. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-5e All proposed site lighting fixtures shall demonstrate compliance with the mandatory B-U-G ratings for area lighting as required by CalGreen mandatory measures in the 7/1/2012 supplement. The Lighting Zone used to demonstrate compliance shall be LZ-2. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction City of Hermosa Beach AE-6a Any proposed metering station site lighting shall be fully shielded and shall incorporate permanent features (shields, hoods, etc.) shall incorporate permanent features which prevent light spillage beyond the property line. Approval of Construction Documents and Prior to issuance of permits and City of Redondo Beach Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Specifications and Inspection during construction AE-6b Light levels and quantities of fixtures shall not exceed that which is needed for security and safety. Approval of Construction Documents and Specifications and Inspection Prior to issuance of permits and during construction Cities of Redondo Beach and Torrance Table 8-2 Air Quality and GHG’s Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party AQ-1a The Applicant shall submit and implement a Fugitive Dust Control Plan that includes SCAQMD mitigations for fugitive dust mitigation, according to Rule 403, and SCAQMD CEQA Guidelines. Fugitive dust mitigation measures in the plan shall include the following (this mitigation is applicable to both the Proposed Oil Project and the Proposed City Maintenance Yard Project): - Apply water every 3 hours to disturbed areas and unpaved roads within a construction site (61 percent reduction). - Require minimum soil moisture of 12 percent for earthmoving, by using a moveable sprinkler system or water truck. Moisture content can be verified by lab sample or moisture probe (69 percent reduction). - Limit onsite vehicle speeds on unpaved roads to 15 mph and posting of speed limits. - All trucks hauling dirt, sand, soil, or other loose materials are to be tarped with a fabric cover and maintain a freeboard height of 12 inches (91 Plan review, site inspections Before and during construction Both Oil Project and City Yard SCAQMD City of Hermosa Beach Formatted Table Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party percent reduction). - Install gravel bed trackout apron (3 inches deep, 25 feet long, 12 feet wide per lane, and edged by rock berm or row of stakes) to reduce mud and dirt trackout from unpaved truck exit routes (46 to 80 percent reduction). - Water storage piles by hand or apply cover when wind events are declared, according to SCAQMD Rule 403 when instantaneous wind speeds exceed 25 miles per hour (90 percent reduction). - Appoint a construction relations officer to act as a community liaison concerning onsite construction issues, such as dust generation. AQ-1b The Applicant shall implement a NOx reduction program including the following, or equivalent, measures to the satisfaction of the SCAQMD (this mitigation is applicable to both the Proposed Oil Project and the Proposed City Maintenance Yard Project): - All off-road construction equipment shall be tuned and maintained according to manufacturers’ specifications. - Any temporary electric power shall be obtained from the electrical grid, rather than portable diesel or gasoline generators. - All off-road diesel construction equipment with greater than 100- horsepower engines shall meet Tier 3 NOx requirements. - Limit onsite truck idling to less than 5 minutes. - A copy of the certified tier specification, best available control technology documentation, or the CARB or SCAQMD operating permit for each piece of equipment shall be kept onsite during all operations. Plan review, site inspections Before and during construction SCAQMD City of Hermosa Beach AQ-3a The Applicant shall limit flaring during Phase 4 to a total of 5 hours per day at the full flaring capacity (or to an equivalent volume of flared gas) during all emergency or routine flaring events in order to ensure that NOx emissions are reduced below the thresholds. Lower NOx emission combustors or other equivalent measures can also be used to satisfy the requirement. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-3b The Applicant shall implement methods to reduce the off-gassing of muds by at Plan review, Before Phase SCAQMD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party least 90 percent through the installation of fully enclosed mud pit areas with vapor control (either through carbon canisters or vapor recovery) and/or the use of mud degassing units routed to vapor control systems. The Applicant shall monitor the muds vapor immediately above the muds exit point from the wellbore and at other areas above the mud pits where muds may be exposed to the atmosphere in order to ensure that hydrocarbon vapors are captured at the minimum rate of 90 percent. site inspections 2 and Phase 4 drilling City of Hermosa Beach AQ-4 The Applicant shall limit the microturbine PM emissions to 0.0035 lbs/mmbtu, or an equivalent reduction in the number and/or size of the microturbines, in order to reduce emissions to below the localized thresholds. The City shall be responsible for ensuring that the applicant will be subject to permit conditions that limit emissions from the set of microturbines, not just individual permit units. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-5a The Applicant shall at all times have a gas buster and SCAQMD-approved portable flare at the site and connected for immediate use to circulate out and combust any gas encountered during drilling. The flare shall be capable of recording the volume of gas that is flared. The operator shall report any flared gas from drilling to the Hermosa Beach Fire Chief and the SCAQMD. Plan review, site inspections Before Phase 2 drilling SCAQMD City of Hermosa Beach AQ-5b The Applicant shall install a compressor seal vent collection system. In the event of a seal leak, vapors shall be collected and sent to the vapor recovery system or flare for destruction. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-5c The Applicant shall develop and implement an Odor Minimization Plan, submitted to and approved by the City and the SCAQMD. The Odor Minimization Plan shall address reducing the frequency from potential sources of odors from all site equipment, including wells and drilling operations, temporary operations such as truck loading, and measures to reduce or eliminate these odors (e.g., containment, design modifications, carbon canisters). The Plan shall address issues such as facility information, buffer zones, signs with contact information, logs of odor complaints, the protocol for Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party handling odor complaints and odor release investigations and methods instituted to prevent a re-occurrence. The Plan shall require that all odor complaints and issues be immediately communicated to the City and that the City shall have the authority to implement and enforce contingency measures to ensure that any nuisance odors from the facility are eliminated. AQ-5d The Applicant shall develop and implement an Air Monitoring Plan. The Plan shall provide for the monitoring of total hydrocarbon vapors and hydrogen sulfide and total hydrocarbon vapors at all perimeter locations of the facility as well as at strategic locations near processing equipment. At all times during operations, drilling, redrilling and workover operations, the Operator shall maintain monitoring equipment that shall monitor and digitally record the levels of hydrogen sulfide and total hydrocarbon vapors. Such monitors shall provide automatic alarms that are audible and visible to the Operator of the drilling equipment, and gas plant, and shall be triggered by the detection of hydrogen sulfide or total hydrocarbon vapors. Alarm points shall be set at a maximum of 1 5 and 5 10 ppm H2S and 500 and 1,000 ppm hydrocarbons, with the higher level requiring shut-down of drilling or plant operations and the lower level requiring notification to appropriate agencies, including the Hermosa Beach Fire Department and SCAQMD. A meteorological station to monitor wind speed and direction under the guidance and specification of the SCAQMD shall be installed at the site. The Air Monitoring Plan shall be reviewed and approved by the City and the SCAQMD. Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach AQ-5e The Applicant shall use an odor suppressant spray system on the mud shaker tables, and shall install carbon capture canisters on all tanks (permanent and portable) that are not equipped with vapor recovery, containing potentially odiferous materials (for example; the mud baker-type tanks) for all drilling operations so that no odor can be detected at the closest receptor. Plan review, site inspections Before Phase 2 and Phase 4 Drilling operations SCAQMD City of Hermosa Beach AQ-5f The fugitive component leak detection program under Rule 1173 shall utilize a Leak Detection and Reporting (LDAR) level of monthly detections with an action Plan review, site inspections Before Phase 2 operations SCAQMD City of Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party level of 100ppm, the installation of bellows valves where applicable (valves 2 inches or smaller) and the use of IR cameras or equivalent during monthly detections to ensure that leaking components are minimized at the facility. Hermosa Beach AQ-6 The Applicant shall provide credits for all GHG emissions generated above the threshold of 10,000 MTCO2e per year. A GHG Reporting and Reduction Plan shall be submitted to the SCAQMD and the City detailing the measures to be implemented to achieve the required reductions, updated annually, and shall include specifications on the protocol, vintage, and registry for any offsite mitigation. The following mitigation credits shall not require prior City or SCAQMD approval: 1. Credits generated within Los Angeles County per an approved SCAQMD protocol; 2. Credits generated within the State of California per an approved SCAQMD protocol; 3. Credits that are generated and verified under the CAPCOA GHG Rx program; 4. Credits that are generated and verified under the voluntary SCAQMD Regulation XXVII; 5. Verified credits registered with the Climate Action Reserve or the American Carbon Registry. In addition, independently verified GHG credits available through other carbon registries that follow specific protocols may be eligible for offsite mitigation, subject to review and prior approval by the City and the SCAQMD. The general criteria for acceptable credits include: • Real: emission reduction must have actually occurred, as the result of a project yielding quantifiable and verifiable reductions or removals. • Additional/Surplus: an emission reduction cannot be required by a law, rule, or other requirement. • Quantifiable: reductions must be quantifiable through tools or tests that Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party are reliable, based on applicable methodologies, and recorded with adequate documentation. • Verifiable: The action taken to produce credits can be audited and there is sufficient evidence to show that the reduction occurred and was quantified correctly. • Enforceable: An enforcement mechanism must exist to ensure that the reduction project is implemented correctly. • Permanent: Emission reductions or removals must continue to occur for the expected life of the reduction project. Operational/drilling GHG emissions from stationary and mobile sources shall be quantified and reported to the City and to the SCAQMD annually. Emissions reporting will follow the same reporting format and procedures as required by the Mandatory Reporting Rule. AQ-7a All diesel equipment used at the site shall meet EPA Tier 3 emission requirements and be equipped with a CARB Level 3 diesel particulate filter to reduce Diesel PM emissions. Workover rigs operated at the project site shall have cumulative total DPM emissions below 1.5 lbs/year or shall utilize electric drive/sources . Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach AQ-7b Vapor recovery on crude oil tanks shall achieve a minimum of 99 percent recovery of fugitive emissions. Plan review, site inspections Before Phase 4 operations SCAQMD City of Hermosa Beach Table 8-3 Biological Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party BIO-1 To minimize potential impacts to nesting native bird species, and in compliance with the federal Migratory Bird Treaty Act and Sections 3503, 3503.5, or 3513 of the California Fish and Wildlife Code, initial vegetation removal/trimming shall be done outside the breeding season (breeding season is defined herein as January 15 through August 31 for raptors and February 15 through August 31 for all non- raptor species). If vegetation removal/trimming must be completed during this period, then surveys for nesting birds must be conducted by a qualified, City-approved Biologist, within 3 days prior to vegetation removal or other construction-related disturbances. If nesting birds are observed within the project area, then a minimum 100-foot buffer from any non-raptor species and 500 foot buffer from any raptor nest would be established and maintained for the duration of vegetation removal/trimming activities or until nestlings fledge from the nest. Plan review, site inspections Before and during construction City of Hermosa Beach BIO-2 The Applicant shall submit for City approval and shall implement an Emergency Response Plan that would, in compliance with the California State Oil Spill Contingency Plan (CDFW, OSPR 2014),address protection of biological resources and possible revegetation of any areas disturbed during an oil spill or cleanup activities. The Emergency Response Plan shall, at a minimum, include specific measures to avoid impacts to native vegetation and wildlife habitats, plant and animal species, and environmentally sensitive habitat areas during response and cleanup operations. The Emergency Response Plan shall include provisions for containment and cleanup measures and responsibilities. The plan shall contain: • Definition of the authorities, responsibilities, and duties of all entities involved in oil removal operations, and methods of emergency action agency coordination during and after an oil spill; • Agreements and statements from all resource agencies involved in an oil response and removal operation; • Procedures and frequencies for regular monitoring and inspections of Plan review Before construction City of Hermosa Beach OSPR Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party pipelines and facilities; • Procedures for early detection and timely notification of an oil discharge; • A description of the necessary onsite equipment and details on the placement of the material required to quickly control, contain, and remove any discharged oil; • Assurance that full resource capability is known and can be committed following a discharge; • A description of sensitive biological resources in the SMB that should be prioritized for clean-up activities in the case of an oil spill into the marine environment; • Actions for after discovery and notification of a discharge; • Procedures to facilitate recovery of damages and enforcement measures. The Emergency Response Plan shall be approved by the California Department of Fish and Wildlife (CDFW) Office of Spill Prevention and Response (OSPR). When habitat disturbance cannot be avoided, the Emergency Response Action Plan shall provide stipulations for development and implementation of site-specific habitat restoration plans and other site-specific and species-specific measures appropriate for mitigating impacts to local populations of special-status wildlife species and to restore native plant and animal communities to pre-spill conditions. Access and egress points, staging areas, and material stockpile areas that avoid specific habitat areas shall be identified. The Emergency Response Action Plan shall include species- and site-specific procedures for collection, transportation and treatment of oiled wildlife. The Emergency Response Plan shall be approved by the City prior to commencing any construction activities. ______________________________________________________________________________ _______________________________________ Table 8-4 Cultural Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party CR-1 Prior to beginning demolition of the existing City Maintenance Yard Building, guidelines shall be developed for the careful exposure of extant elements of the historic brick and mortar furnace. Once exposed, detailed documentation of the furnace shall be undertaken. Documentation shall be guided by the Historic American Engineering Record (HAER) standards. This documentation shall include production of high quality 35-mm photographs and plan drawings of building elements exposed, including but not limited to, a floor plan, any character-defining building features, and elevation drawings. All work carried out pursuant to the recordation of the furnace building shall be conducted by, or under the direct supervision of a person or persons meeting, at a minimum, the Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994) as an architectural historian. A written report detailing the HAER-like documentation shall be provided to the City upon completion the work. This report shall be produced on archivally stable materials and filed with the Hermosa Beach Historical Society. Development and implementation of a monitoring and documentation plan by a qualified archaeologist. During building demolition within areas of recorded historical resources. Project Proponent and Construction Contractor CR-2a The design of the New City Maintenance Yard Building shall be compatible in design, styling, material, and massing of the adjacent City Hall complex. The building design should not attempt to replicate the New Formalist style, but it shall not conflict or contrast with the existing building style. The buildings constructed in the New City Maintenance Yard shall be no more than two stories high. They shall not overpower or overshadow the existing building complex. Design of the New City Maintenance Building and landscape Design Phase Project Proponent and City CR-2b The landscaping associated with the proposed New City Maintenance Yard shall replicate the planting types surrounding the City Civic buildings, to the extent possible, in order to blend the new construction into the existing Complex. The final design of both the new building and landscape should be Design of the New City Maintenance Building and Design Phase Project Proponent and City Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party developed in consultation with an historic architect or architectural historian who meets Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994). landscape CR-3a Prior to any ground-disturbing activities or building removal within the Proposed Project sites, an Archaeological Monitoring Plan shall be developed by a qualified archaeologist with provision for review and input by concerned Native Americans and approval by the City. The Plan will also address worker safety during building demolition and ground disturbing activities and during the implementation of the Remedial Action Plan. The Plan is to include provisions for archaeological and Native American monitoring, detailed documentation of all early twentieth-century artifact-bearing deposits exposed during ground- disturbing site work, and development of a clear collection policy for both prehistoric and historic artifacts, subsequent artifact analysis, reporting of findings, and disposition and/or curation of any significant artifacts recovered. All reports of findings shall be filed with to SCCIC. Development and implementation of a monitoring plan by a qualified archaeologist in consultation with concerned Native American tribes. The monitoring plan shall be submitted for review by the City of Hermosa Beach and approval prior to beginning development. Plan shall be implemented prior to and during construction. Project Proponent and Construction Contractor CR-3b Any significant archaeological deposits remaining in the area of the previous City of Hermosa Beach Dump following over-excavation at the Proposed Oil Development Project site must be protected in place. Stabilization and covering of these archaeological deposits shall be monitored by a qualified historical archaeologist meeting the Secretary of the Interior’s Professional Qualifications Standards (48 FR 44738-39 as revised in 1994). Following construction any remaining archaeological deposits must be stabilized and covered for protection. Following over- excavation Project Proponent and Construction Contractor CR-4 Should Project-related excavations be designed to exceed 45 feet in depth at the City Dump, or depths greater than 15 feet along the pipelines, or otherwise A paleontological The monitoring Project Proponent Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party be shown to have the potential to impact intact San Pedro Sand deposits as described above, a Paleontological Resources Monitoring and Mitigation Plan (PRMMP) shall be developed by a qualified paleontologist in consultation with the City and implemented prior to or during Project-related ground disturbing activities. The Plan will also address worker safety during building demolition and ground disturbing activities and during the implementation of the Remedial Action Plan. resource monitoring and mitigation program (PRMMP) for treatment of the paleontological resources will be developed and implemented. plan shall be submitted for review by the City of Hermosa Beach and approval prior to beginning development. Plan shall be implemented prior to and/or during construction. and Construction Contractor CR-5 Ground-disturbing activities in the area of the discovery shall immediately be halted or redirected. A temporary construction exclusion zone shall be established surrounding the site to allow for further examination and treatment of the find. A City representative shall immediately notify the Los Angeles County Coroner’s office by telephone. By law, the Coroner will determine within two working days of being notified if the remains are subject to his or her authority. If the Coroner recognizes the remains to be Native American, he or she shall contact the Native American Heritage Commission who will appoint the Most Likely Descendent (MLD). Additionally, if the remains are determined to be Native American, a plan will be developed regarding the treatment of human remains and associated burial objects and the plan will be implemented under the direction of the MLD. The Native American Heritage Commission (NAHC) must be contacted by the Los Angeles County Coroner, and a Most Likely Descendant must be designated. Any further Upon discovery of human remains. Project Proponent and Construction Contractor Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party treatment of the remains will occur in consultation with the MLD, the NAHC, and a qualified archaeologist. ______________________________________________________________________________ ____________________________ Table 8-5 Fire Protection and Emergency Response Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party FP-1a The Applicant shall ensure adequate (3,000-5,000 gpm) water supplies are available from the existing water lines and hydrant system, by extending the 8 inch water main or some other source for water supplies that provides sufficient water supply rates, pressure and duration to comply with codes, standards and requirements of the LACFD and the HBFD. Installation of a fire pump, or installation of a piping connection to area water mains that can supply the flows, may be required to ensure the appropriate water flow and pressure requirements. The Applicant shall ensure that all area hydrants and water supplies are tested annually as to the NFPA standards for water flows and pressures, and shall ensure that the results are reported to the City of Hermosa Beach and the Hermosa Beach Fire Department. Review of water flow calcs and tests, annual reviews Before Phase 2 City of Hermosa Beach HBFD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party FP-1b The Applicant shall coordinate with the HBFD to integrate a community alert notification system for the proposed project into the City's existing alert system to automatically notify area residences and businesses in the event of an emergency at the project site that would require residents to take shelter or take other protective actions. The Applicant shall implement programs to ensure that all immediate neighbors are provide ample opportunity to participate in the notification system. Review and testing of system Before Phase 2 City of Hermosa Beach HBFD FP-1c The Applicant shall fund an additional FTE position at the HBFD, or equivalent, for personnel with specific capabilities in inspection and code compliance associated with oil and gas production facilities. This arrangement shall be to the satisfaction of the HBFD. Training and hiring completed at HBFD Before Phase 2 City of Hermosa Beach HBFD FP-1d The Applicant shall develop emergency response plans addressing the facility's fire-fighting capabilities pursuant to the most recent NFPA requirements, Los Angeles County Fire Code, LACFD, California Code of Regulation, and API requirements, in coordination with and to the satisfaction of the LACFD and the City of Hermosa Beach Fire Department. These plans shall include, but not be limited to, fire monitor placement, water capabilities, fire detection capabilities, fire foam requirements, facility condition relating to fire-fighting ease and prevention, and measures to reduce impacts to sensitive resources. The plan should also address coordination with local emergency responders and area schools and daycare facilities. Review and approval of plans Before Phase 2 City of Hermosa Beach HBFD FP-1e The Applicant shall ensure that the emergency response planning includes development of evacuation plans of neighbors for an emergency scenario at the facility,. The plan shall be reviewed by the LACFD, HBFD and the City annually and updated as needed. The relevant portions of the plan shall be distributed to the public utilizing a method determined by the reviewing Agencies. Review of plan revision Before Phase 2 and Phase 4 City of Hermosa Beach HBFD FP-1f The Applicant shall ensure and make funding available to 1) upgrade the dispatch system and procedures within Hermosa/Torrance/Redondo to implement a CAD-to-CAD system to improve dispatch times; and 2) extend the Review of Mutual Aid agreement Before Phase 2 and Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party mutual aid agreements to become automatic aid agreements between the Hermosa Beach Fire Department, Redondo Beach Fire Department and the Torrance Fire Department and to include the Torrance HAZMAT unit, or provide for funding to provide additional equipment and to train a sufficient number of Hermosa Beach, Redondo Beach and/or Manhattan Beach Emergency Response personnel to provide first response HAZMAT capabilities. revision HBFD FP-1g The Applicant shall ensure, during Phase 2 and Phase 4, that the site shall have sufficient water containment capabilities, as per guidance and approval of the Fire Department. Area storm drains along 6th Street and Cypress Avenue shall be equipped with flapper-type valves to enable the closure of the storm drain system in the event of potential overflow. Review of plan and onsite inspections Before Phase 2 and Phase 4 City of Hermosa Beach HBFD FP-2a The Applicant shall ensure that design and construction comply with applicable codes and standards for equipment spacing, particularly those related to flare location and distances to public areas and distances from well drilling equipment to buildings. If this cannot be achieved, additional requirements shall include the construction of thermal radiation barriers or insulation on the crude oil tanks, installation of thermal barriers/walls around the flare stack, increasing the height of the flare stack during drilling, relocation of the flare stack, providing thermal radiation modeling to estimate the impacts of equipment on the crude tanks and process piping and public areas and the design and construction of blast walls as per API 752. Fire rated barriers shall be established, as per LACFD requirements, to ensure that all buildings within 100 feet of well drilling would be protected from thermal radiation. Thermal assessments shall be completed to ensure that the thermal radiation from the flare is within acceptable levels (as per API RP 521) and does notproduce damage to other equipment or nearby walls/soundwalls. The design and construction compliance status shall be verified by third-party audits under the direction of the City. Third party audit report review Before Phase 2 and Phase 4 City of Hermosa Beach HBFD FP-2b Fire protection measures specific to the crude oil containment system shall be Review of Before Phase City of Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party provided, including the installation of manual fire foam systems with automatic detection and notification (to both the operators and the HBFD) capable of foaming in the perimeter of the crude oil containment system, wellhead area and the area immediately adjacent to combustion or spark producing equipment within or immediately adjacent to the crude oil containment area. The system shall be capable of being remotely activated from a safe location in the event of a crude oil fire. The highest level electrical classification achievable shall be designated for all equipment located within the crude oil containment and wellhead area. design documents 2 and Phase 4 Hermosa Beach HBFD ______________________________________________________________________________ _______________________________________ Table 8-6 Geological Resources/Soils Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party GEO-1a In coordination with the Caltech Seismological Laboratory, the Applicant shall install an accelerometer at the Project Site to determine site-specific ground accelerations as a result of any seismic event in the region (Los Angeles/Orange County and offshore waters of the Santa Monica Bay and San Pedro Channel). The drilling operator shall cease operations and inspect all onsite oil field-related pipelines, storage tanks, and other infrastructure following any seismic event that exceeds a ground acceleration at the Project Site of 13 percent of gravity (0.13 g). The drilling operator shall not reinstitute operations at the Project Site and associated pipelines until it can be determined that all oil field infrastructure is structurally sound. Inspection by a California Registered Civil Engineer Following any seismic event that results in substantial ground accelerations at the Project Site, as pre- determined by a California- licensed geotechnical City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party engineer. GEO-1b All seismic related recommendations provided by NMG Geotechnical (2012) shall be incorporated into the Proposed Oil Project design. These measures shall include, but not be limited to the following: - Drilled-in-place piles or cast-in-drilled-hole piles shall be constructed for foundations in the landfill area, i.e., northeast Project Site, to reduce seismically induced settlement. - Ground improvement techniques, including high pressure grout injection, i.e., compaction grouting, shall be used in the landfill area to reduce seismically induced settlement and allow construction of conventional shallow foundations. - Seismic design criteria for horizontal and vertical accelerations, identified in Tables 10 and 11 of the geotechnical report, shall be used during Proposed Project design (including incorporation of updated seismic design criteria from the 2013 California Building Code). - During Phase 1, the upper 2 to 4 feet of soil in the vicinity of the proposed well cellars shall be excavated and replaced with compacted fill. In addition, the basement under the maintenance building shall be removed and filled in with compacted fill. In addition, the basement under the maintenance building shall be removed and filled in with compacted fill. - During Phase 3, the eastern portion of the site shall be excavated approximately 7 feet deeper than the majority of the proposed building pad, with a minimum of 3 feet of overexcavation below design grades, and recompacted to provide a uniform fill blanket below proposed tanks, compressors, and other equipment. - Asphalt pavement and underlying subgrade soils shall be designed to accommodate the proposed drill rig. Positive surface drainage shall be provided to direct runoff away from slopes and structures and toward suitable drainage devices. Ponding of water on structural pads shall not be allowed. Review and approval of geotechnical report. Approve geotechnical report prior to issuance of grading permit. City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party GEO-2a Injection pressures associated wastewater injection shall not exceed reservoir fracture pressures as specified in California Code of Regulations Title 14, Division 2, Section 1724.10, and as approved by the California Division of Oil, Gas, and Geothermal Resources.. Comparing pressure measurements on each injection well to formation fracture pressure During waste water injection operations California Division of Oil and Gas and Geothermal Resources (DOGGR) and Hermosa Beach Public Works Department GEO-2b In coordination with the Caltech Seismological Laboratory, the Applicant shall install an accelerometer at the Project Site to determine site-specific ground accelerations as a result of any seismic event in the region (Los Angeles/Orange County and offshore waters of the Santa Monica Bay and San Pedro Channel). Readings from the accelerometer shall be recorded at the Oil Field and transmitted in real-time to the Caltech Seismological Laboratory. The drilling operator shall cease operations and inspect all onsite oil field-related pipelines, storage tanks, and other infrastructure following any seismic event that exceeds ground acceleration at the Project Site of 13 percent of gravity (0.13 g). The drilling operator shall not reinstitute operations at the Project Site and associated pipelines until it can be determined that all oil field infrastructure is structurally sound. Monthly City of Hermosa Beach GEO-2c In the event that monitoring indicates that Proposed Oil Project-induced seismicity is occurring, wastewater injection operations shall be adjusted to alleviate such seismicity. The drilling operator shall first receive approval from the California Division of Oil, Gas, and Geothermal Resources prior to any change (increase) in the injection operations. Seismicity monitoring Following monthly monitoring, as necessary City of Hermosa Beach GEO-3 All slope stability related recommendations provided by NMG Geotechnical (2012) shall be incorporated into the Proposed Oil Project design. Temporary Submit temporary Prior to permit issuance City of Hermosa Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party excavations shall be stabilized per the latest edition of Cal/OSHA requirements for loose sands, including shoring or laying back of trench walls. Shoring along the northern perimeter of the Project Site shall be designed by an experienced structural engineer due to the proximity to existing buildings that must be protected from potential settlement and lateral movements. shoring plans and calculations. Beach GEO-4a Prior to approval of the first Phase 4 drilling permit, the Applicant shall have submitted and the City of Hermosa Beach and the California Coastal Commission shall have approved a Subsidence Monitoring and Avoidance Program, for both onshore and offshore areas. The onshore monitoring plan shall be completed throughout the life of this project, in accordance with Appendix A, Subsidence Monitoring Program, of the Subsidence and Induced Seismicity Technical Report, E&B Oil Development Project (Geosyntec Consultants 2012), included as Appendix _F of this EIR. The offshore monitoring plan shall be completed throughout the life of this project in accordance with the Offshore Subsidence Monitoring Program and Possible Mitigation Measures, Hermosa Beach, California (Coastal Environments 1998), included as Appendix _F of this EIR. The latter shall be updated, as applicable, to reflect advances in science since 1998. In addition, Section 7.6, Mitigation of Onshore Subsidence, of the latter report, shall not be applied to this mitigation measure, as the onshore monitoring program would be completed in accordance with the Geosyntec Consultants (2012) report. Monitor subsidence with GPS technology. Prior to Phase 4 Annually Hermosa Beach Public Works Department GEO-4b The Subsidence Monitoring Program shall include: Ground elevation survey methodologies with high vertical resolution; including onshore surface elevations and offshore bathymetric elevations; Prior to Phase 4 II drilling, establishment of a network of onshore and offshore survey or subsidence monitoring locations, including continuous GPS stations, GPS benchmarks, and tautly anchored offshore monitoring points, positioned within the City, outside the City, and in offshore areas, that are sufficiently Monitor subsidence with GPS technology. Prior to Phase 4 Annually Hermosa Beach Public Works Department Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party spaced to draw conclusions about subsidence within the zone of influence of the Project; Because subsidence can occur for a variety of reasons, establishment of control points outside the zone of influence to allow differentiation of possible subsidence effects related to other activities; Use of InSAR imagery technology to evaluate regional subsidence patterns both within and beyond the proposed oil field; Sufficient monitoring frequency to establish trends in subsidence in order to distinguish background ground movement from any subsidence caused by proposed oil field operations; Reservoir monitoring, including documentation of produced fluid volume (oil, gas and water) and reservoir pressures at similar frequency to ground elevation measurements; Reporting requirements; and Action levels, as specified in the onshore and offshore subsidence monitoring reports. Surveying for both vertical and horizontal ground movement shall be completed along the perimeter and throughout the interior of the oil field, including both onshore and offshore areas, utilizing Global Positioning System technology in combination with a network of ground stations. The onshore continuous monitoring GPS stations shall include: Hermosa Beach Pier. The pier will serve as the furthest offshore point in the onshore monitoring program. Longfellow Outfall. This Outfall is larger and more structurally stable than some of the other outfalls along the City’s coast. King Harbor Jetty. This location was selected to achieve a distribution of continuous monitoring points along the coast of Hermosa Beach. This will help provide a limited regional picture of the subsidence between survey events. GEO-4c An onshore and offshore baseline subsidence report shall be completed and Coordinate with At least two Hermosa Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party made available to the City of Hermosa Beach and the California Coastal Commission at least two months and no more than six months prior to planned commencement of Phase 4 II drilling operations. Subsidence monitoring reports shall be completed annually and the results shall be forwarded to the California Coastal Commission and the City of Hermosa Beach for review, no more than one month following the end of each annual monitoring cycle. In addition, results shall be forwarded to the adjoining City of Redondo Beach and City of Manhattan Beach. Hermosa Beach Public Works Department months prior to Phase 4 2 drilling operations Beach Public Works Department GEO-4d In the event that the Global Position System monitoring indicates that significant subsidence, as defined by the onshore and offshore subsidence monitoring reports described in GEO-4a, is occurring in and/or around the Proposed Project area, wastewater or water reinjection operations shall be increased to alleviate such subsidence. The Applicant shall coordinate with the California Division of Oil, Gas and Geothermal Resources, which will approve increased levels of wastewater or water reinjection operations in accordance with the approved Subsidence Monitoring Program. The Applicant will also coordinate with the City of Hermosa Beach, Public Works Department, to verify that subsidence has been mitigated sufficiently. The Applicant will also coordinate with the City of Hermosa Beach, Public Works Department, to verify that subsidence has been mitigated sufficiently. Coordinate with California Division of Oil and Gas and Geothermal Resources (DOGGR) Following monitoring results indicating subsidence California Division of Oil and Gas and Geothermal Resources (DOGGR) and Hermosa Beach Public Works Department GEO-4e In the unlikely event that subsidence related mitigation induces seismicity, corrective actions related to subsidence shall proceed until baseline surface elevations have been achieved, as subsidence related damage would likely be more pronounced in comparison to damage associated with Project related micro-seismicity. Upon reestablishment of baseline elevations, drilling operations shall cease until a balance between subsidence avoidance and induced seismicity avoidance can be established, as agreed upon by the California Division of Oil, Gas and Geothermal Resources, the California Coastal Commission, and the City of Hermosa Beach. Coordinate with California Division of Oil and Gas and Geothermal Resources (DOGGR) Following monitoring results indicating subsidence California Division of Oil and Gas and Geothermal Resources (DOGGR) and Hermosa Beach Public Works Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Department GEO-6 A Registered Civil Engineer shall analyze surficial and near-surface soils at the Project Site subsequent to grading and prior to on-site construction, to determine whether expansive soils are present. Similarly, soils at the Proposed City Maintenance Yard Project Site and along the proposed pipeline route shall be analyzed for soil expansion potential. In the event that clay-rich, expansive soils are present, foundations shall be designed to accommodate expansive soils and pipelines shall be placed within a blanket of non-expansive soils to prevent structural damage and/or failure. Foundation and pipeline design shall be reviewed and approved by a Registered Civil Engineer. Soil auger and analytical laboratory Prior to final design City of Hermosa Beach GEO-7a Proposed Oil Project design must conform to the recommendations of HDR Schiff (2012), included within Appendix C in NMG Geotechnical (2012), or as per the City Engineer, and should occur prior to completion of the final Project design. Design for protection against corrosion Prior to final design City of Hermosa Beach GEO-7b All buried metal pipelines shall be coated and placed under impressed cathodic protection. To monitor for internal corrosion, corrosion coupons or equivalent measures can be utilized. Under impressed cathodic protection Prior to final design City of Hermosa Beach GEO-7c External pipe inspections shall be conducted for the exposed pipeline sections to ensure atmospheric coatings are in good conditions. All external inspections shall be documented and reviewed by the operations management and repairs documented, when necessary. Visual inspections Monthly City of Hermosa Beach GEO-7d In accordance with California Division of Oil, Gas, and Geothermal Resources pipeline regulations (Public Resources Code Sections 3013 and 3782), a pipeline management plan shall be implemented for the Project Site. Similarly, in accordance with United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration regulations, a pipeline management plan shall be implemented for proposed pipelines located beyond the perimeter of the Project Site. These plans shall include, but not be limited to mechanical Prepare under guidance of California Department of Conservation Division of Oil, Gas, and Prior to final design California Division of Oil and Gas and Geothermal Resources (DOGGR), United States Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party testing, including ultrasonic and hydrostatic testing. Geothermal Resources and United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration Department of Transporta- tion, Pipeline and Hazardous Materials Safety Administra- tion, and Cities of Hermosa Beach, Redondo Beach, and Torrance GEO-7e All concrete in contact with the high sulfate or corrosive soils shall be Type V concrete in accordance with the 2010 California Building Code. Pour proper concrete adjacent to corrosive soils During construction City of Hermosa Beach ______________________________________________________________________________ _____________________________ Table 8-7 Safety, Risk of Upset and Hazards Proposed Oil Project and Pipeline Mitigation Measures Mitigation Requirements Compliance Verification Measure Method Timing Responsible Party SR-1a The Applicant shall cause to be prepared an independent third-party audit, under the direction and supervision of the City, of the gas and crude oil plants and pipelines, once constructed, including the well pads, to ensure compliance with Fire Code, applicable API and NFPA codes, EPA RMP, OSHA PSM, DOGGR and SPCC and emergency response plans requirements. All audit items shall be implemented in a timely fashion, and the audit shall be updated annually, as directed by the City and the Los Angeles County Fire Departments. The final installation of the facilities shall include a seismic assessment, including walkthroughs, of equipment to withstand earthquakes prepared by a registered Structural Engineer in compliance with Local Emergency Planning Committee Region 1 CalARP guidance and the seismic assessment shall be updated, with walkthrough inspections, annually to ensure compliance with the codes and standards at the time of installation. Review of audit reports Before Phase 4 operations and annually thereafter LACFD HBFD Cities of Redondo Beach and Torrance SR-1b The Applicant shall ensure that the crude oil spill containment areas shall be designed as Class I Division I areas according to NFPA and NEC, or that spark producing equipment (such as the flare) would be isolated from the containment area, in order to reduce the potential for crude oil fires. The refrigeration system shall utilize non-flammable refrigerant. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-1c The Applicant shall ensure that all crude-oil truck haulers and a sufficient number of onsite personnel (at least two per shift) are trained in HAZMAT (to the HAZWOPER technician level at least) spill response and that each truck carries a spill response kit. Site inspections, review of contracts Before Phase 2 drilling City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1d The Applicant shall install automatic valves on the gas pipeline that will automatically shut down under a low pressure scenario at the Processing Facility Area for all pipelines leaving the processing plant, and shall install a backflow prevention device at the main gas pipeline tie-in location, to prevent the release of gas from the main transmission pipeline in the event of a rupture in the gas pipeline. The second, return pipeline shall remain isolated from the main gas pipeline during normal operations. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-1e The Applicant shall ensure that warning tape is installed above the pipelines within the pipeline trench to warn third parties that pipelines are located below the warning tape and that the pipelines are capable of utilizing a smartpig. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-1f The odorant system shall have its own, smaller containment area around it limiting the spilled pool size to the minimum size attainable, in order to prevent any offsite impacts. Transfer of odorant shall utilize carbon canisters and a canister change-out/maintenance program to ensure that filling of odorant tanks do not cause offsite impacts. Review of design documents Before Phase 3 construction City of Hermosa Beach HBFD Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party SR-1g The comingled produced gas shall be continuously monitored for hydrogen sulfide. If H2S levels in the produced gas from any individual well exceeds 100 ppm, then that well shall be shut in and abandoned as per DOGGR requirements. Wells shall be tested when fluids first flow, when the well is placed into production and periodically thereafter in order to ensure that all wells operate below 100 ppm H2S. Review of design documents and in-field inspections Before Phase 2 drilling City of Hermosa Beach HBFD Cities of Redondo Beach and Torrance SR-2 The Applicant shall sample soil during Phase 1 grading to ensure that soil lead contamination levels are below 9,500 mg/kg and that soil contaminated with TPH are below the regulatory guidelines. If soils are encountered above these levels, then those soils shall be removed from the site and transported to a disposal site. This may necessitate implementing the RAP during Phase 1 if substantial amounts of contamination are encountered. Review of design documents and in-field inspections Phase 1 City of Hermosa Beach ______________________________________________________________________________ _______________________________________ Table 8-8 Hydrology and Water Quality Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2a The Applicant shall properly maintain the associated crude oil pipelines, storage tanks, and processing facilities within and outside the Project Site, including smart-pigging according to State of California Office of the State Fire Marshal requirements and the standards outlined by the Department of Oil, Gas and Geothermal Resources, and the Los Angeles Regional Water Quality Control Board. The Applicant shall visually inspect onsite storage tank and processing equipment at least daily and provide a visual inspection of the crude oil pipeline right-of-way inspections on a weekly basis. Review of maintenance reports Before Phase 4 operations Annually Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2b The Applicant shall install a leak detection system for crude pipelines to the Exxon Mobil Refinery transfer of custody location. The system shall include pressure and flow meters, flow balancing, supervisor control and data acquisition system, and a computer alarm system in the event of a suspected leak. Temperature, pressure, and flow shall be monitored at each pipeline entry and exit. If any variable deviates by more than 10 percent of the normal operating range, the system shall trigger both audible and visual alarms. Flow balancing shall be conducted every 5 minutes, 1 hour, 24 hours, and 48 hours with the accuracy defined once the system is established and tested. Review of system design and testing results Before Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2c Personnel at the site shall be trained in equipment use and containment and cleanup of an oil spill. Dry cleanup methods, such as absorbents, shall be used on paved and impermeable surfaces and shall be included in a spill trailer maintained onsite. Spills in dirt areas shall be immediately contained with an earthen dike and the contaminated soil shall be dug up and discarded in accordance with local and state regulations. Review of training and equipment Before Phase 2 and Phase 4 operations and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2d Oil spills shall be contained and cleaned according to measures outlined in the then-current California Stormwater Quality Association Best Management Practice Handbook. Review of training and incident reports Before Phase 2 and Phase 4 operations, and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2e A United States Environmental Protection Agency, Spill Prevention, Control, and Countermeasure Plan, approved by the City of Hermosa Beach Fire Department, shall be implemented in the event of a spill. The Plan, which shall include a spill response trailer, equipment, and personnel training shall be completed prior to Phase 2 and Phase 4, and in compliance with the California State Oil Spill Contingency Plan (California Department of Fish and Game, Office of Spill Prevention and Response 2010) and the Los Angeles/Long Beach Oil Spill Contingency Plan (California Department of Fish and Wildlife 2011). Spill cleanup shall be completed under the oversight of the lead regulatory agency, with respect to oil spills, as identified in the Spill Prevention, Control, and Countermeasure Plan. Review of reports Before Phase 2 and Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2f The well cellar shall be lined with an impermeable membrane to prevent oil- based substances from seeping into groundwater supplies. All drilling muds storage shall be contained within Baker-type enclosed tanks, which shall be sized to accommodate high intensity rainfall events without overtopping. Review of design documents, field inspection Before Phase 2 and Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2g The Applicant shall install a check valve in the crude oil pipeline at the Herondo and Valley drive where the crude oil pipeline turns eastward and starts uphill. Review of design documents, field inspection Before Phase 4 operations Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party HWQ-2h The Applicant shall fund and install, under the direction of the Hermosa Beach Public Works Department, an oil/grit separators or oil/water separator located along Herondo Street downstream of Valley Drive, in order to capture small to medium sized spills before they reach the ocean. Installation and maintenance costs shall be provided by the Applicant and the devices shall be inspected by the Applicant to ensure that the "trap" is operational before any storm events. Review of design documents, field inspection Before Phase 4 operations, and intermittently thereafter Cities of Hermosa Beach, Redondo Beach, and Torrance HWQ-2i The Applicant shall utilize a smaller 6" ERW pipe and a heat and impact resistant coating at a minimum comparable to a 3-layer fusion bonded epoxy (such as BrederoShaw 3LPP) and weld coverings equivalent to sleeves with epoxy primer. Specification of the pipe and coating shall approved by the City. Review of design documents, field inspection Before Phase 4 operations City of Hermosa Beach, CSFM HWQ-2j The Applicant shall install a 3 sack slurry starting 6 inches above the pipe to the base of the pavement or ground surface and lay strips of warning tape over the top to prevent third-party damage. Review of design documents, field inspection Before Phase 4 operations City of Hermosa Beach Table 8-9 Noise and Vibration Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-1a Increase the height of the noise barrier on all sides of the site to 24-feet (24-feet is the maximum feasible height for a noise barrier during Phase 1). Minimum sound insulation performance of the barrier shall remain at STC-25. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach NV-1b The gates on the east and south sides of the site shall be 24-feet high, consistent with the height of the acoustical barrier around the perimeter of the site. The gates shall have no holes or gaps in them and shall be designed to deliver a minimum sound insulation performance of STC-25. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach NV-1c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 1 City of Hermosa Beach NV-2a Increase the height of the noise barriers on all sides of the site from 32-feet to 35-feet (35-feet is the maximum height allowed). Minimum sound insulation performance of the barrier material should be STC-32. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2d Install pads on the V-door and other appropriate areas, timbers and pads on the drill deck, pads between drill and casing pipe while in storage and pad and timbers at the boards on the mast to reduce metal-on-metal noise. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2e Provide full acoustical enclosures around the mud pumps. The enclosures shall be factory-assembled by a manufacturer with a proven track-record of building noise-reducing enclosures for industrial applications. The total sound power level radiated by the enclosure shall not exceed 77 dBA, including noise contributions from: the access door(s), observation windows, ventilation openings and ventilation fans (if required). Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2f Provide enhanced inlet and outlet silencers for the Hydraulic Power Unit enclosure and upgrade the walls, roof and floor of the enclosure as necessary to limit the total sound power level radiated by the enclosure to 77 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2g The acoustical shroud around the drilling mast shall be comprised of acoustical blankets material with a minimum STC rating of 25. The acoustical blankets material shall provide continuous coverage of three sides of the mast and shall cover the uppermost 26-feet of the fourth side. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-2h Provide acoustical treatment within the combustor fan housing and/or at the ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2i Eliminate use of the combustor during drilling in Phase 2 or prior to the initiation of production occurring concurrent with drilling in Phase 2, acoustical treatment shall be provided: within the combustor fan housing and/or ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA; and to the combustor stack to limit the power level radiated by the stack to 80 dBA.. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-2j During the drilling portion of Phase 2, implement a “Super-Quiet Mode” of operation between the hours of 2AM and 5AM, during which time drilling would essentially be suspended to minimize noise. Super-Quiet Mode would impose the following additional measures and limitations: no pipe-handling of any kind anywhere on the project site, shakers switched off, top drive and rig floor completely enclosed on four sides by acoustical blankets material with a minimum STC rating of 25, operation of the top drive limited to “exercising” the pipe string only, top drive travel limited to the bottom half of the drilling rig mast. Super-Quiet Mode shall be implemented from the outset of drilling work during Phase 2; however, if monitoring shows consistently that noise emissions for normal drilling operations (with mitigation measures NV2a through NV2i in place) would result in less-than-significant impact during all or part of the period between 2AM and 5AM, the Applicant may, at the discretion of the City, be permitted to reduce the hours Super-Quiet Mode operations, or eliminate Super-Quiet Mode altogether. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-3a Increase the height of the noise barriers on all sides of the site from 32-feet to 35-feet (35-feet is the maximum height allowed). Minimum sound insulation performance of the barrier material should be STC-32. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-3b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-3c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-3d Provide acoustical treatment within the combuster fan housing and/or at the ventilation openings, as necessary to limit the total sound power level radiated by the housing (including contributions from the door and ventilation openings) to 86 dBA. Review of design documents and in-field inspections Before Phase 2 City of Hermosa Beach NV-4a Increase the height of the noise barrier on all sides of the site to 24-feet (24-feet is the maximum feasible height for a noise barrier during Phase 3). Minimum sound insulation performance of the barrier shall remain at STC-25. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-4b The gates on the east and south sides of the site shall be 25-feet high, consistent with the height of the acoustical barrier around the perimeter of the site. The gates shall have no holes or gaps in them and shall be designed to deliver a minimum sound insulation performance of STC-25. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach NV-4c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. Review of design documents and in-field inspections Before Phase 3 City of Hermosa Beach NV-6a Increase the height of the noise barriers on all sides of the site from 32-feet to35-feet (35-feet is the maximum height allowed by zoning code). Minimum sound insulation performance of the barrier material shall be STC-32. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6b The gates on the east and south sides of the site shall have no holes or gaps in them and shall be designed to deliver a minimum STC of 32. Any gaps above the gates must be closed off, by extending the acoustical barrier material from the sides. The intent is to maintain the acoustical integrity of the STC-32 noise barrier in all locations. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6c All acoustical barriers around the site shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.49, 0.72, 0.74, 0.29, 0.21, 0.14. In the event that a permanent 35-foot wall is built, the interior surfaces of the wall (i.e. those facing inwards towards the drilling and production operations) shall be treated with exterior grade acoustical panels offering equivalent sound absorption performance to that specified in this Measure above a height of 10-feet from the ground. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-6d Install pads on the V-door and other appropriate areas, timbers and pads on the drill deck, pads between drill and casing pipe while in storage and pad and timbers at the boards on the mast to reduce metal-on-metal noise. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6e Provide full acoustical enclosures around the mud pumps. The enclosures shall be factory-assembled by a manufacturer with a proven track-record of building noise-reducing enclosures for industrial applications. The total sound power level radiated by the enclosure shall not exceed 77 dBA, including noise contributions from: the access door(s), observation windows, ventilation openings and ventilation fans (if required). Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6f Provide enhanced inlet and outlet silencers for the Hydraulic Power Unit enclosure and upgrade the walls, roof and floor of the enclosure as necessary to limit the total sound power level radiated by the enclosure to 77 dBA. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-6g The acoustical shroud around the drilling rig mast shall be comprised of acoustical blankets material with a minimum STC rating of 25. The acoustical blankets material shall provide continuous coverage of three sides of the mast and shall cover the uppermost 26-feet of the fourth side. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-6h During the drilling portion of Phase 4, implement a “Super-Quiet Mode” of operation between the hours of 2AM and 5AM, during which time drilling would essentially be suspended to minimize noise. Super-Quiet Mode would impose the following additional measures and limitations: no pipe-handling of any kind anywhere on the project site, shakers switched off, top drive and rig floor completely enclosed on four sides by acoustical blankets material with a minimum STC rating of 25, operation of the top drive limited to “exercising” the pipe string only, top drive travel limited to the bottom half of the drilling rig mast. Super-Quiet Mode shall be implemented from the outset of drilling work during Phase 4; however, if monitoring shows consistently that noise emissions for normal drilling operations (with mitigation measures NV6a through NV6g in place) would result in less-than-significant impact during all or part of the period between 2AM and 5AM, the Applicant may, at the discretion of the City, be permitted to reduce the hours of Super-Quiet Mode operations, or eliminate Super-Quiet Mode altogether. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-7a Increase the height of the masonry walls on the north and west sides of the site to a minimum of 27-feet. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach NV-7b Apply outdoor acoustical panels to all available surfaces of the north and west walls that face the production operations above a height of 10-feet above the ground. The purpose of the acoustical panels is to control reflection of production noise in the direction of the sensitive uses to the east and south. The acoustical panels shall offer the following minimum sound absorption performance: Center Frequency (Hz), 125, 250, 500, 1k, 2k, 4k - Sound Absorption Coefficient, 0.28, 0.68, 0.95, 0.86, 0.89, 0.72. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party NV-7c Well workover rigs shall be powered by electric drive/sources or “ultra-quiet” generators or engines - either diesel or natural gas-powered - that are capable of operating below the noise significance thresholds for daytime operation. Review of design documents and in-field inspections Before Phase 4 City of Hermosa Beach Table 8-10 Transportation and Circulation Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-1a For Phases 1-3, the Applicant shall fund, through and in consultation with the School District and Safe Routes to School, an afternoon crossing guard to be stationed at the Project Site area to ensure pedestrians passing nearby the Project Site have assistance in crossing the streets and the entrances/exit of the Project Site. Alternately, the Applicant shall ensure that trucks do not travel to and from the Project Site unless school is in session (i.e. truck travel prohibited on Valley Drive after 2:48 p.m., on Wednesdays after 1:45 p.m. or on school minimum days after 12:45 p.m.). The Applicant shall consult with the School District to ensure timing is current. Review of contracts and site inspections Prior to construction activities City of Hermosa Beach TR-1b For Phases 1-3, the Applicant shall install, subject to the approval of the City Public Works Department, warning signs and blinking yellow lights one block north and south (if applicable with possible one-way on Valley Drive) of the Project Site warning vehicle traffic that trucks may be entering and exiting the roadway. Blinking lights shall only operate when trucks are utilizing the roadway (not 24 hours per day). Review of design documents and site inspections Prior to construction activities City of Hermosa Beach TR-1c The Applicant shall ensure that all trucks accessing the Project Site and utilizing the Pier Avenue/Valley Drive intersection are less than 65 feet long to prevent safety hazards at the double intersection on Pier Avenue between Valley Drive and Ardmore Avenue. If trucks longer than 65 feet are required, then flagger shall be used at the Pier Avenue and Valley/Ardmore intersection. Review of contracts and site inspections Phase 1-4 Prior to construction activities City of Hermosa Beach Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-1d For Phases 1-3, the Applicant shall, with the approval and coordination of the City Public Works Department, either 1) restripe Valley Drive south of Pier Avenue to be a southerly directed one-way street. No on-street parking shall be allowed on Valley Drive between 6th Street and 8th Street to allow for sufficient line of sight for trucks entering and exiting the Project Site; or 2) restripe the section of Valley Drive between 2nd Street and Herondo Street to make it two- way and direct all truck traffic along Herondo Street to approach the project site from the south. Review of design documents and site inspections Prior to pipeline construction activities City of Hermosa Beach TR-2a Pipeline construction activities within the Pipeline right-of-way shall be limited to weekday between the hours of 9:00 a.m. and 3:00 p.m., unless the applicable municipality approves a specific exception to the time limit for periods of limited duration, subject to measures required by the municipality to protect the public health and safety. The Applicant shall coordinate with adjacent jurisdictions throughout the design and construction phase. Review of design documents and site inspections Prior to pipeline construction activities Cities of Hermosa Beach, Redondo Beach, and Torrance TR-2b The applicant shall implement a Construction Traffic Management Plan (CTMP) during Pipeline construction that includes the following pursuant to the procedures and subject to approval of the applicable municipality: 1) Require the Pipeline contractor(s) to obtain and follow street construction permits in the affected areas (Cities of Hermosa Beach, Redondo Beach, and Torrance, and Caltrans facilities - PCH and Hawthorne Boulevard); 2) Develop detour and traffic management plans consistent with the affected City’s standard roadway plans (e.g., Torrance Street Standard T603), the California Manual of Uniform Traffic Control Devices (MUTCD), or the Work Area Traffic Control Handbook (WATCH); 3) Revise Pipeline construction schedules to minimize access impacts to adjacent residents and businesses; and 4) Ensure that all affected residences and business have adequate emergency access during all times and phases of construction. The Applicant shall coordinate with adjacent jurisdictions throughout the design and construction phase. Approval of CTMP Prior to pipeline construction activities Cities of Hermosa Beach, Redondo Beach, and Torrance Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party TR-3a The applicant shall be prohibited from routing Proposed Oil Project-related heavy truck exceeding 20,000 pounds on 190th Street between Anza Avenue and PCH, except during Pipeline construction. The Applicant shall comply with all requirements of the applicable city. Use of alternative route Phases 1-4 Cities of Hermosa Beach, Redondo Beach, and Torrance TR-3b The applicant shall route inbound and outbound heavy (>20,000 pounds) truck traffic along PCH and Artesia Boulevard, which are designated truck routes. Use of alternative route Phases 1-4 Cities of Hermosa Beach, Redondo Beach, and Torrance TR-3c Applicant shall supply private parking sufficient to meet all parking demands and shall direct all employees and contractors to park within Applicant’s private parking areas, or to utilize an alternative parking program approved by the City. Review of Plans and onsite inspections Phase 1-4 City of Hermosa Beach TR-4a The City shall design the permanent Proposed City Maintenance Yard so that it does not enter/exit directly onto Valley Drive. Review of Plans Phase 3 City of Hermosa Beach TR-4b If the permanent Proposed City Maintenance Yard Project affects the sidewalk, then the design shall incorporate a sidewalk design along Valley Drive which utilizes a landscape buffer to separate the pedestrians from the street. Review of Plans Phase 3 City of Hermosa Beach Table 8-11 Water Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party WR-1 Prior to approval of demolition and new construction, a Registered Civil Engineer in the State of California shall evaluate the capacity of the existing sewer line system, beginning at the proposed tie-ins on Valley Drive for the Proposed City Maintenance Yard Project and 6th Street for the Proposed Oil Project, and continuing downstream to the Sanitation Districts of Los Angeles County sewer system, prior to any connections. A 7-day capacity performance test shall be performed, based on Sanitation Districts of Los Angeles County average wastewater generation factors, to determine baseline and peak flows, and to ensure the sewer has adequate capacity in the downstream areas. The capacity analysis shall be submitted to the City Public Works Department and the Districts for review and approval. In the event that existing sanitary sewer facilities are insufficient to accommodate increased flows from the Project Site, the Applicant shall provide mobile sanitary facilities (i.e., toilet, sink, and urinal) for onsite personnel, as necessary. Area study of the proposed sewer line and a 7-day performance capacity test should be performed at select downstream locations to verify the adequacy of the existing sewer. Prior to issuance of permit City of Hermosa Beach WR-2 Implement MM HWQ-2a through HWQ-2d. See HWQ-2a through HWQ- 2d See HWQ-2a through HWQ- 2d See HWQ-2a through HWQ-2d WR-3a The Applicant shall complete a site-specific Area of Review/Zone of Endangering Influence analysis, per Division of Oil, Gas, and Geothermal Resources requirements, to determine if oil and gas wells are present that might serve as conduits for injected liquids to migrate upward to underground sources of drinking water. In the event that such wells are present, those wells shall be plugged and abandoned such that underground sources of drinking water (i.e., less than 10,000 mg/L total dissolved solids) are protected. Plugging and abandonment of those wells shall include zonal isolation plugs outside all casings and shall be completed per current Division of Oil, Gas, and Geothermal Resources standards. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to initiation of injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources Proposed Oil Project and Pipeline Mitigation Measures Mitigation Measure Requirements Compliance Verification Method Timing Responsible Party WR-3b The Applicant shall confine injected fluids into the intended zone of injection in order to adequately protect underground sources of drinking water. Injection well cement shall be placed at the base of all underground sources of drinking water, and not just at the base of fresh water, to protect water with total dissolved solids content ranging from 3,000 mg/L to 10,000 mg/L. Coordination with Division of Oil, Gas, and Geothermal Resources During injection well drilling and injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources WR-3c The Applicant shall complete step-rate tests, using bottom-hole and surface pressure gauges, such that maximum allowable surface injection pressures are set at a maximum of 95 percent of the fracture pressure of the formation being injected. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources WR-3d The Applicant shall ensure that the hydrostatic pressure in overlying West Coast Basin aquifers is not exceeded during injection over the active life of the disposal wells. To ensure that this does not occur, the static reservoir pressure shall be monitored on a periodic basis, per Division of Oil, Gas, and Geothermal Resources requirements, and injection into the receiving zone shall cease if and when the hydrostatic pressure is exceeded. Coordination with Division of Oil, Gas, and Geothermal Resources Prior to injection operations City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources WR-3e The Applicant shall meet with Division of Oil, Gas, and Geothermal Resources staff annually to review the status of the waste water injection wells. Any deficiencies identified by Division of Oil, Gas, and Geothermal Resources staff shall be immediately rectified by the Applicant. Coordination with Division of Oil, Gas, and Geothermal Resources Annually following initiation of Phase 2 City of Hermosa Beach and Division of Oil, Gas, and Geothermal Resources October 9, 2014 Honorable Mayor and Members of Regular Meeting of The Hermosa Beach City Council October 14, 2014 E&B’S PROPOSED OIL DRILLING AND PRODUCTION PROJECT PART A Public Hearing on placement of a measure on the March 3, 2015 ballot to present to the electorate for its consideration a Ballot Measure Ordinance proposing various legislative changes, a Development Agreement, and an oil and gas pipeline franchise and making CEQA findings in order to lift the ban on oil drilling and allow the Proposed E&B Oil Drilling & Production Project at the site of the current City Maintenance Yard at 555 Sixth Street, Hermosa Beach, CA, 90254 Recommendation: PART A: Hold a public hearing to consider placing a measure on the March 3, 2015 ballot to allow the Proposed E&B Oil Drilling & Production Project at the site of the current City Maintenance Yard at 555 Sixth Street, Hermosa Beach, CA, 90254. The public hearing also serves as an opportunity for the public to raise objections to the oil and gas pipeline franchise before being placed on the ballot. Should the Council elect to place the Project on the March 3, 2015 ballot, the Council should: (1) Adopt the following resolution attached this report: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA, CALLING AND GIVING NOTICE OF THE HOLDING OF A SPECIAL MUNICIPAL ELECTION ON TUESDAY, MARCH 3, 2015, FOR SUBMISSION OF AN ORDINANCE TO THE ELECTORATE RELATING TO A PROPOSED OIL AND GAS DRILLING AND PRODUCTION PROJECT PROPOSED BY E&B NATURAL RESOURCES MANAGEMENT CORPORATION FOR THE CITY MAINTENANCE YARD AT 555 SIXTH STREET; and (2) Proceed to Part B of this agenda item to consider four additional resolutions pertaining to submitting to the voters a measure on the proposed E&B oil drilling/production project at a Special Municipal Election on March 3, 2015 Should the Council determine that the item is not yet ready to be placed on the ballot, it is recommended that Council continue this hearing to its regular meeting of October 28, 2014 to allow additional time to address remaining open issues. Background: Consideration by the electorate of the proposed E&B Oil Drilling & Production Project implements a 2012 Settlement Agreement between the City of Hermosa Beach, E&B Resources Management Corporation (“E & B”) and Macpherson Oil Company (for itself and Windward Associates) to resolve a lawsuit brought by Macpherson Oil Company against the City for breach of contract regarding oil drilling at the site of the existing City Maintenance Yard at 555 Sixth Street. The litigation stems in part from adoption of Proposition E, a 1995 decision by the Hermosa Beach voters to restore a ban on oil drilling in the City. This ban is still in effect and can only be lifted by another vote of the people. The Settlement Agreement obligates the City, at the Applicant’s request, to ask the voters whether or not to approve an oil drilling and production project at the proposed Project site. Thirty-four years remain on the lease that the City entered into with Macpherson Oil Company in 1992, which was assigned to the E&B, allowing the Project to occur on the City Maintenance Yard. The Applicant proposes to develop the 1.3-acre Project site at 555 Sixth Street, Hermosa Beach, currently used as the City Maintenance Yard, as an onshore oil drilling and production site using directional drilling to access oil and gas reserves in the tidelands and uplands within the Torrance Oil Field, with 30 production wells, 4 water injection wells, liquid and gas separating equipment, and gas processing unit. In addition, the proposed Project would result in the installation of offsite underground pipelines for the transportation of the processed crude oil and gas from the Project Site within the Valley Drive right-of-way to and within the Cities of Redondo Beach and Torrance to refineries. The Applicant proposes a laydown site for supply staging/storage within the basement level of the industrial building at 601 Cypress Avenue during the construction phases. The Applicant also proposes to construct a parking lot at 636 Cypress Avenue for use by some of its construction employees/contractors on weekdays and by the public at other times; this would replace public parking eliminated by the project on the Project site and along Sixth Street. The Proposed Oil Project would occur in the following four phases: Phase 1: Site Preparation, including relocation of the City Maintenance Yard to the temporary facility; Phase 2: Drilling and Testing of three oil wells and one water disposal/injection well; Phase 3: Final Design and Construction of both the oil and gas facility and the permanent City Maintenance Yard; and Phase 4: Development and Operations, including drilling of the remaining wells over 30 months and re-drill of wells periodically through the life of the project. The Applicant proposes a facility designed for a maximum capacity of 8,000 barrels per day (bpd) of crude oil and 2.5 million standard cubic feet per day (scfd) of produced gas at completion of the drilling stage of the Proposed Oil Project in Phase 4. The timeframe from commencement of the proposed Project until the permanent oil and gas facility would be operational is estimated to be approximately 3.25 years. All aspects of the proposed project are fully described in the Final Environmental Impact report (FEIR) dated June 2014. The FEIR is available on the City’s website at http://www.hermosabch.org/index.aspx?page=755 or by contacting the Community Development Department at (310) 318-0242. The Project site is the City’s Maintenance Yard at 555 Sixth Street, which E&B will utilize pursuant to a lease for development of its Project should the voters approve a ballot measure lifting the ban on oil drilling. In 1993, the City also approved a Conditional Use Permit on the site for oil drilling and production. The CUP itself will be superseded by the Development Agreement for this project; however, the still relevant CUP conditions will be binding on the project as conditions in the Development Agreement, to the extent not inconsistent with the mitigation measures recommended in the FEIR. The proposed project has also been designed consistent with the still relevant 1993 CUP conditions, which are included in the Project Description as integral elements of the project. The CUP conditions incorporated in the Development Agreement remain unchanged, except for the deletion of a few conditions that have been superseded by stricter Mitigation Measures in the EIR. The City Council certified the Final EIR for this Project on July 8, 2014. The Settlement Agreement between the City and E&B requires the City Council to submit to the voters at a special election the question whether to amend the Hermosa Beach Municipal Code to allow E&B’s oil and gas drilling and production project to proceed at the City maintenance yard located at 555 Sixth Street and to approve a development agreement that would afford E&B a vested right to proceed with its project. The Agreement to Implement the Settlement Agreement entered into between the City and E&B on July 23, 2014 calls for the special election to take place on March 3, 2015. The Planning Commission held a public hearing and considered the legislative changes, development agreement and findings that have been prepared for presentation to the Hermosa Beach voters on June 23, 2014. The Commission found that legislative changes would be necessary for the E&B Oil Project to be approved and to be consistent with the General Plan, Coastal Land Use Plan and Hermosa Beach Municipal Code, and recommended that the City Council submit the Ballot Measure to the Hermosa Beach voters. The Ballot Question The form of the ballot question was presented to the City Council at its September 8 and 30, 2014 study sessions. The question is limited to 75 words, must be impartial (and not misleading), precise and must include mention of each of the separate actions being asked of the voters. The question must start with the word “shall” and solicit a “yes” or “no” answer. It seems important for the sake of clarity to identify the project by name (i.e. E&B) and to identify the location of the proposed project by its address. Several alternative versions of the ballot question were submitted at the September 30 , 2014 study session by members of the public, two organizations and Councilmember Barragan. Several Councilmembers expressed a desire to include some of the information contained in the alternative versions. Council asked that staff return with a single ballot question for consideration. A revised ballot question is included in the Resolution calling the election; it is responsive to the Council direction to include additional information and in the City Attorney’s judgment, meets the above requirements. The Ballot Measure Ordinance The Ballot Measure Ordinance, Attachment A to the Resolution calling the election, would: 1. Amend the Hermosa Beach Coastal Land Use Plan (part of the City’s General Plan) to change the land use designation for the City Maintenance Yard and to adopt energy policies consistent with E&B’s Project; 2. Amend various provisions of the City’s Municipal Code to allow E&B’s Project to proceed, but continue to prohibit oil drilling elsewhere in the City, and to remove the restriction on the City’s use of Project royalties for open space and parkland; 3. Approve a Development Agreement between the City and E&B in order to provide E&B with a statutory vested right to proceed with its Project and to set forth all conditions of approval and mitigation measures that will govern the Project; 4. Approve an oil pipeline franchise allowing E&B to construct and operate subterranean pipes for the transmission of oil and gas from the drill site to a location outside the City; and 5. Adopt a legally-required statement that the Project is the most desirable, feasible alternative and that its benefits outweigh its significant unavoidable impacts. The Ordinance has four attachments: A. New Chapter to the Coastal Land Use Plan with policies for coastal oil and gas development; B. Diagram of the Coastal Land Use Plan Map Amendment reflecting the change in designation from Open Space to Industrial (IND); C. Diagram of the oil and gas pipelines for the pipeline franchise; and D. The Development Agreement. Legislative Changes The Ballot Measure Ordinance includes all of the legislative changes needed for the project to proceed. These changes would make the Project consistent with the Hermosa Beach Municipal Code and General Plan. More specifically, E&B’s project requires the following land use actions in order to proceed, which are reflected the Ballot Measure Ordinance.1 1 A strikethrough version of the various amendments is available as part of the Planning Commission’s July 23, 2014 staff report. http://hermosabeach.granicus.com/DocumentViewer.php?file=hermosabeach_24a8cfbf40344fcef200765d3946ea cd.pdf&view=1. The strikethrough was also presented to the City Council as part of its July 8, 2014 agenda packet. • Amendment to Section 17.28.020 (Permitted uses, Light Manufacturing M-1 Zone) of the Hermosa Beach Municipal Code to allow oil and gas production and processing as a permitted use, subject to Section 17.42.140. (Ordinance Section 2) • Addition of Section 17.42.140 to Chapter 17.42 (General Provisions, Conditions and Exceptional Uses) of the Hermosa Beach Municipal Code to permit oil production and processing on City-owned property located at 555 Sixth Street in the M-1 Zone subject to approval of a Development Agreement and without a precise development plan. (Ordinance Section 4) • Amendment to 17.28.030(D) (Standards and Limitations, Light Manufacturing M-1 Zone) to specify oil and gas operations may exceed the 35 foot building height for a temporary period of time to a height as set forth in an approved Development Agreement. (Ordinance Section 3) • Amendment to Section 5.56.010 to Chapter 5.56 of the Hermosa Beach Municipal Code to continue to prohibit allow oil and gas wells in the city except as provided above. (Ordinance Section 5) • Repeal of Section 5.56.020 of the Hermosa Beach Municipal Code which restricted disposition of city funds derived from hydrocarbon recovery for acquisition, maintenance, and improvement of available excess school or other properties for open space and parkland purposes. (Ordinance Section 6) • Amendment to Title 21 Oil Production Code of the Hermosa Beach Municipal Code to amend the definition of Grade and Process Operations. (Ordinance Section 8) The Ballot Measure Ordinance also changes the Hermosa Beach Coastal Land Use Plan- Land Use Map designation for the Project site at 555 Sixth Street from Open Space to Industrial (IND) consistent with the proposed use. (Ordinance Section 9) The Ordinance includes a new chapter to the Hermosa Beach Coastal Land Use Plan entitled Coastal Industrial (Oil and Gas) Development. This chapter sets forth the policies that govern oil and gas drilling and production in the City and have been prepared in consultation with, and require approval by, the California Coastal Commission. The policies can be found at Attachment A to the ballot measure ordinance. (Ordinance Section 7) Franchise for Oil and Gas Pipelines A pipeline franchise for oil and gas pipelines is required from the City to allow the oil and gas pipelines within the City. The pipelines will run underground in the right-of-way of Southbound Valley Drive to the City of Hermosa Beach border with Redondo Beach at Herondo Street. Even if the voters approve the franchise, the pipeline will still require a ministerial encroachment permit setting forth appropriate conditions as required by the Municipal Code and implementing the mitigation measures set forth in the Final Environmental Impact Report (“EIR”) and conditions incorporated in the Development Agreement. The term of this franchise shall be co- terminus with the term of the Lease. The franchise also includes an annual franchise fee, payable to the City as follows: Pipelines with an Internal Diameter of: Base Rate Per Lineal Foot 0-4 inches .590 4-6 inches .895 6-8 inches 1.197 The dimensions of the pipelines would be an 8" crude oil pipeline and two 4" gas pipelines. The portion of the pipelines within the City of Hermosa Beach will each run for approximately 0.43 miles. The initial annual fee calculates to roughly $7647.79 per year. The applicable base rate will be adjusted annually by any increase in the CPI. The franchise also provides that the surface of City roads shall be placed in a condition that is as good and as serviceable as existed at the beginning of this work and must be to the satisfaction of the City Engineer. State law provides procedures to be followed when the City Council grants a franchise. While it is not entirely clear that the procedures apply to this situation where the voters will approve a franchise, the Council determined that it would be prudent to follow the procedures by adopting a resolution of intention and providing an opportunity for the public to object to the franchise before placing the franchise on the ballot. The City Council adopted a resolution declaring its intention to submit the proposed franchise for oil and gas pipelines to the electorate on September 23, 2014. The public hearing tonight also serves as a time to receive any objections to placing the franchise before the voters for approval. The Ballot Measure Ordinance includes a provision awarding the pipeline franchise on the above terms. (Ordinance Section 10) Development Agreement The Project includes a Development Agreement and provides E&B with a vested right to proceed with the Project as required by the Settlement Agreement in exchange for a package of public benefits. In addition to the lengthy contractual obligations between the parties, the agreement incorporates the EIR mitigation measures, the updated 1993 CUP conditions and additional conditions of approval drafted specifically for this Project. The DA was drafted in accordance Government Code Section 65865, and as required by state law and the HBMC Hermosa Beach Municipal Code includes the duration of the agreement; the permitted uses of the property; the density and intensity of use; the maximum height and size of proposed buildings; and the permissive content allowed by Section 65865.2. The Development Agreement can be found as Attachment D to the Ballot Measure Ordinance. (Ordinance Section 11) The provisions of the Agreement highlighted in yellow are still under discussion as of the writing of this staff report; any new developments regarding those provisions will be provided to the Council as a supplemental. A redline version of the Development Agreement also included as an attachment to this agenda item shows the changes made to the Development Agreement since it was presented to the City Council on September 30, 2014. The Development Agreement also has multiple attachments: Exhibit A-1: Legal Description for 555 6th Street Exhibit A-2: Legal Description for 601 Cypress Avenue Exhibit A-3: Legal Description for 636 Cypress Avenue Exhibit B: Project Description from the Final EIR Exhibit C: Explanation of Public Benefits Exhibit D1: Conditions of Approval from 1993 Conditional Use Permit for Oil Development at the City Maintenance Yard, Exhibit D2: Additional Project Conditions Exhibit D3: Mitigation Measures/Mitigation Monitoring Plan- from Section 8.0 of Final Environmental Impact Report The focus of the Council’s discussions of the Development Agreement has been on the public benefits being proposed by E&B, which are enumerated in Exhibit C to the Agreement. Below is a summary of the negotiations on public benefits being conducted by the Council Subcommittee (Councilmembers DiVirgilio and Fangary). In bold is the status of each item as of the writing of this staff report. a) Expenditure of Oil Revenues by the City: E & B initially suggested that the City consider a public process to determine what revenues from the lease would be used for, to occur following a successful ballot measure. The City subcommittee expressed that this should occur through normal City processes rather than a contractually required process. The Development Agreement no longer includes this language. b) Supplemental School Funding: E & B proposed additional funds for the schools to supplement the lease royalties to be provided by way of a separate agreement with the Education Foundation or other non-profit organization that would cover or offset the revenues from the lease that would go to the State. E & B has continued to assert that this benefit is an important part of the Development Agreement. The City Council has previously given direction that it not be included in the DA; that notwithstanding, E&B has continued to insist that it be included in the Agreement due to the fact that schools are not receiving as much funding as originally contemplated due to State distribution issues. Councilmember Fangary has been clear in negotiation discussions with E&B that his position is that it not be in the Agreement. Councilmember DiVirgilio has stated that he would be agreeable to including E&B’s proposed additional contribution (1% of gross revenues) if it was clear that the School District had the discretion to accept the funds if the oil ban was lifted. If the School District did not accept the additional contribution, then the funds would go to the Hermosa Beach Education Foundation if approved by them. If the School District and the Education Foundation both declined the additional contribution, then E&B would be relieved of the obligation. E&B still prefers that the contribution go directly to the Education Foundation. Since the City’s negotiation team is divided on this issue, Council should provide input on this item. Exhibit C includes both E&B’s proposed language and Councilmember DiVirgilio’s preferred language. c) Remedial Action Plan: E & B will pay the entire cost of soils remediation at the maintenance yard should the oil ban be lifted and the project move forward to Phase 3 – full production. If the ban is lifted and the oil project does not go forward past Phase 2, E & B will clean up the site to be used for industrial and commercial purposes. E&B will not be responsible for remediation of the Ballot Measure fails. The Subcommittee is in agreement with this proposal. d) Temporary and Permanent Relocation of City Maintenance Yard: E & B initially proposed to advance more funds than the $50,000 (temporary) and $500,000 (permanent) called for in the lease. E & B clarified that would entail converting the figures above into current dollars. At the May 27, 2014 City Council meeting, the suggestion was made that E & B pay the entire cost of permanent and temporary relocation of the maintenance yard. The City subcommittee made this request at the June 2nd meeting. The subcommittee also clarified that E & B could also suggest a viable option for the temporary relocation of the City yard. E&B has proposed that if the ban is lifted and it decides to proceed with Phase 3 of the project, it will advance $6,500,000 to the City for the permanent relocation of the City Maintenance Yard. E & B has further agreed to forgive the City’s $3.5 million obligation if the project does not go to Phase 3. These funds could be used for projects at the discretion of the City such as a temporary or permanent relocation of the City Maintenance Yard. The City’s projected cost of the temporary relocation ($3 million) and permanent relocation ($10 million) comes to a total of $13 million. The City had planned on doing a temporary facility due to the uncertainty of whether or not E&B would continue the project after Phase 3. This proposal reduces this uncertainty and is supported by the Subcommittee. e) Timing of Revenues: E & B initially proposed that the minimum royalty to the City be paid after 1 year of drilling, rather than in the 4th year as is provided in the lease. E & B clarified that the minimum payment would be $500,000 per each year, nonrefundable. At City Council meetings, the suggestion was made to increase the amount of the accelerated Minimum Royalty from $500,000 to $4 million per year, to be available for City general fund purposes. The City Subcommittee made this request with the caveat that it would be an advance from uplands revenue. E & B has agreed to provide an additional unrestricted contribution to the City in the amount of $500,000. E&B has stated that both payments totaling $1 million would now occur at the 4th year. The Subcommittee should confirm its position on this item at the meeting. f) E & B Matching Funds to Achieve City Goals: E & B proposed additional funds to the City, beyond the royalties, on a 50/50 matching basis for “off-set” projects such as converting the City fleet to be carbon neutral and undergrounding of utilities. On September 30, 2014, Council directed the Subcommittee to remove this section from the DA. E&B has now proposed that it would provide $30 million in matching funds for the undergrounding of utilities citywide. Undergrounding utilities has not been a priority of the City and is not included in the City’s 5-year Capital Improvement Program. The Subcommittee should confirm its position on this item at the meeting. g) Benefits to Nearby Property Owners: Similar to its project in Huntington Beach, E & B proposed setting up and funding an account that would stabilize proven impacts to property values for 5 years (during drilling) for properties in close proximity to the project. E & B clarified that the timeframe was undecided at this time. It further clarified that the residents would need to voluntarily apply for this program. A more detailed program proposal was promised. In response to comments from Council on May 27, 2014, the City subcommittee clarified that the term “proven impacts” would need to be precisely defined. A summary of the Residential Property Trust program is included in Exhibit C to the Development Agreement. E & B has now proposed that the program will be available to properties within 600 feet of the project and the fund have a minimum balance of $1 million and payments on claims will be capped at $20 Million. E&B has agreed to place another $4 million in the fund over time. Any funds left over in the fund will be distributed to properties within 300 feet of the project. The Subcommittee is in conceptual agreement with this proposal. Proposals by the City for inclusion in the Development Agreement: a) Acceptable limits of insurance coverage. New insurance language has been incorporated into the Agreement and is still under review by the parties’ insurance advisors. b) An explicit ban on the practice of fracking. Language included in the Development Agreement. c) Inclusion of all mitigation measures from the FEIR and other conditions of approval- see notes above. Language included in the Development Agreement. d) At the City Council meeting of May 27, 2014, it was suggested that if the ballot measure passes, E & B agree to forgive the $17.5M debt, even if E & B ultimately does not obtain other required approvals or proceed with the project. The City subcommittee made this request at the June 2nd meeting. E & B has rejected this request. e) At the City Council meeting of May 27, 2014, it was suggested that E & B pay a street damage fee to compensate for asphalt wear and tear due to the anticipated truck traffic. The City subcommittee made this request at the June 2nd meeting. Language included in the Development Agreement. f) The City’s legal counsel suggested that the City negotiate a condition requiring that upon expiration of the lease, the maintenance yard site be returned to the City in a specified condition. The City subcommittee made this request at the June 2nd meeting. Language is included in the Development Agreement. g) Expiration of Lease – the City’s subcommittee requested that if the voters did not lift the oil ban, then E&B would agree that the lease would expire. This would require a separate agreement with E & B if the oil ban is not lifted by the voters. E & B rejected this offer. The City Attorney provided an update on this issue at the September 30, 2014 meeting. h) Recommendations in the reissued HIA dated July 2014. Language Included in the Development Agreement. Other Development Agreement Issues: a) Introduction Language – E & B would like to include language in the introduction of the Public Benefits Section (Exhibit C) that shows a range of potential oil royalties to the City. The low amount of the range would be the estimate from the City’s Cost Benefit Analysis and the high amount would be E & B’s estimate of $500 million. The City DA Subcommittee has stated that this should not be in the agreement. E&B and the Subcommittee have discussed the concept of including Figure 1 from the Cost Benefit Analysis (CBA) in the Statement of Overriding Considerations Figure 1 shows the CBA estimates and E&B’s estimates. Staff is unclear whether both members of the subcommittee support this plan. b) Technical Legal issues: Councilmember Fangary submitted language changes for the Agreement. Those that are agreeable to the parties have been included in the Agreement; provisions where there is still disagreement have been highlighted in yellow. Councilmember Fangary has also proposed adding a provision that would require E&B to provide the City with notice of any litigation in which it is a defendant party that relates to oil drilling operations, and/or any enforcement orders/cleanup and abatement orders that any governmental agency issues to it during the term of the Agreement. From: Dave Andrews [mailto:dandrews@deviousmedia.com] Sent: Tuesday, October 28, 2014 2:58 PM To: Terri Dinubilo; Elaine Doerfling Cc: Tom Bakaly; Ann Yang Subject: Supplemental Documents for item 5a Dear City Council members: I have seen a ton of reports that have come out yesterday and today about the price of oil dropping dramatically. Goldman Sachs is stating it will be $70 a barrel. http://fuelfix.com/blog/2014/10/27/goldman-sachs-expect-u-s-crude-to-fall-to-70-next-year/ Another expert is stating $65 a barrel and that companies will stop drilling. http://video.cnbc.com/gallery/?video=3000325088 Another guy says oil is going the way of whale oil. I guess he said it could hit $10 a barrel. http://video.cnbc.com/gallery/?video=3000324916 Traders are not surprised it is under $80 a barrel: http://video.cnbc.com/gallery/?video=3000325040 My questions for you is, and something that you may wish to ask E&B Oil: 1. “At what price per barrel does E&B stop drilling typically? “ 2. “At what price per barrel does E&B stop drilling on this project, which will be very capital intensive?” It would be nice to know. If the city is going to be out money for loans and “advances” to move the city yard and hoping to repay that loan with royalties from the oil drilling then what happens if they stop drilling because it does not make financial sense. E&B wants all kinds of things in the Development Agreement. They call out Hermosa’s oil in their CBA at $105. This is not the case based on what is happening in the market. The Hermosa CBA has $100 a barrel. The price of oil had a high in 2012 and has dropped the past two years. Basically, as of this estimate from Goldman Sachs, Hermosa may be losing 30% minimum on today’s prices and long term this probably won’t go up significantly. Maybe the city has the CBA revised to reflect the price per barrel at $30, $40, $50, $60, $70, $80, $90 so voting citizens can see the dramatic difference. It may not make financial sense at a certain price per barrel where the city does not make any money and actually owes money! What is the city’s break even on the price per barrel? If we have not figured this number out, we should. Outside of the nine significant and unavoidable impacts according to the certified environmental impact report the city is open to risk financially. In other words, the financials on this are all very, very speculative. Added to this, there is a wide range of speculative figures regarding what any actual production/amounts would theoretically be. Are we at a time in the oil industry that could be similar to the housing crash in terms of value? Tesla Motors started 11 years ago. They now have the highest rated car ever using no gas. They have charging stations across the US and building them across Europe. They are spending money on massive battery factories. All automobile manufacturers have to comply with the law 54.5 mpg by 2025 or 10 years after the vote. This will be twice the current mpg today. To me it looks like the demand will start to go down. For your review I have included the following attachments for your review to better understand my thoughts: 1. Goldman Sachs/ Expect U.S. crude to fall to $70 next year o This is the article discussing the price of oil. 2. World oil market chronology from 2003 - Wikipedia o This wikipedia page discusses the historical reasons for the prices of oil to rise or fall each year. 3. Price of oil per year o This is a 20 year look at the price of oil per year based on the CBA’s reference to California Midway Sunset pricing 4. Break Even Shale Drilling o I know this is shale drilling but as you can see each company has a point as to when they no longer drill because it is does not make financial sense. What is E&B’s. 5. cba price per barrel o This is what price per barrel that the independant 3rd party who did the Cost Benefit Analysis used. o We should have a revisions of the CBA available to citizens. 6. EB Price per barrel o This is the price per barrel that E&B’s paid consultants used. 7. U.S. Sets Much Higher Fuel Efficiency Standards - NYTimes.com 1. This article covers the new mpg regulations for the future. Just some thoughts. I probably won’t make it tonight because I am waiting on the pregnant wife and taking care of the kid but will be trying to watch. Thank you for all your long hours and hard work. Sincerely, Dave Andrews 10/28/14, 2:49 PMU.S. Sets Much Higher Fuel Efficiency Standards - NYTimes.com Page 1 of 3http://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.html?_r=0&pagewanted=print August 28, 2012 U.S. Sets Higher Fuel Efficiency Standards By BILL VLASIC DETROIT — The Obama administration issued on Tuesday the final version of new rules that require automakers to nearly double the average fuel economy of new cars and trucks by 2025. The standards — which mandate an average fuel economy of 54.5 miles per gallon for the 2025 model year — will increase the pressure on auto manufacturers to step up development of electrified vehicles as well as sharply improve the mileage of their mass-market models through techniques like more efficient engines and lighter car bodies. Current rules for the Corporate Average Fuel Economy, or CAFE, program mandate an average of about 29 miles per gallon, with gradual increases to 35.5 m.p.g. by 2016. The new rules represent a victory for environmentalists and advocates of fuel conservation, but were attacked by opponents, including the Republican presidential nominee Mitt Romney, as too costly for consumers. While the regulations have been in development for more than a year, the White House’s decision to make them final on the first full day of the Republican National Convention seemed intended to highlight one of President Obama’s proudest accomplishments at a time when Mr. Romney has laid out a different energy and environmental agenda. The administration called the new rules “historic,” and estimated that Americans would reduce their oil consumption by 12 billion barrels over the course of the program. “These fuel standards represent the single most important step we’ve ever taken to reduce our dependence on foreign oil,” Mr. Obama said in a statement. But the Romney campaign has criticized the new rules as “extreme” and said the standards would limit the choices when consumers shop for a new car. “The president tells voters that his regulations will save them thousands of dollars at the pump, but always forgets to mention that the savings will be wiped out by having to pay thousands of dollars more upfront for unproven technology that they may not even want,” said Andrea Saul, a spokeswoman for the Romney 10/28/14, 2:49 PMU.S. Sets Much Higher Fuel Efficiency Standards - NYTimes.com Page 2 of 3http://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.html?_r=0&pagewanted=print campaign. The transportation secretary, Ray LaHood, said the standards would save Americans $1.7 trillion in fuel costs, resulting in an average savings of more than $8,000 a vehicle by 2025. The fuel savings, he said, would easily exceed the estimated $2,000 to $3,000 that the more efficient vehicles would cost consumers to buy. “You put better technology in the car and the price is going to go up,” Mr. LaHood said in a conference call with reporters. “But it goes up a fraction of what you save on gas.” The administration also said the rules would cut greenhouse gas emissions in half by 2025, eliminating six billion tons over the course of the program. Proponents of the rules contend that they could also generate hundreds of thousands of jobs by increasing the demand for new technologies. “Our nation will be more secure, our environment will be cleaner, and consumers will have more money in their pockets as a result of the new rule,” said Phyllis Cuttino, director of the Pew Clean Energy Program, an environmental organization based in Washington. Thirteen major automakers, including General Motors, Ford and Chrysler, endorsed the new standards during lengthy negotiations last year. The companies fought for and won inclusion of a critical midprogram review period in the final rule. The review, to be conducted at the end of the decade, is meant to assess the progress made toward achieving the 54.5 m.p.g. goal. The standard could then be altered if the manufacturers are struggling to meet the new guidelines. One industry trade group, the Alliance of Automobile Manufacturers, said a “rigorous midterm review” was necessary to determine how consumers reacted to new models that had better mileage but might be more expensive. “Compliance with higher fuel-economy standards is based on sales, not what we put on the showroom floor,” the alliance said in a statement. Auto dealers also expressed concern that higher prices for new cars might exclude some consumers from the market. “This increase shuts almost seven million people out of the new car market entirely,” said Bill Underriner, chairman of the National Auto Dealers Association. 10/28/14, 2:49 PMU.S. Sets Much Higher Fuel Efficiency Standards - NYTimes.com Page 3 of 3http://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.html?_r=0&pagewanted=print Auto companies are expected to take different approaches to meeting the more stringent guidelines. Some, like the Japanese automaker Nissan, are counting on consumers gravitating to all-electric models like its Leaf. Others, like Chrysler, will focus their efforts on improving engines and transmissions on traditional gasoline-powered cars. Ford is offering its new Focus compact car with a variety of power sources, ranging from an electric version to a regular gas engine. Still, American consumers have so far been slow to buy electric cars, despite gas prices that are near $4 a gallon. General Motors is planning to shut down production temporarily of the Chevrolet Volt plug-in hybrid to reduce a backlog of unsold inventory. For the most part, automakers will have to accelerate their efforts to improve mileage by reducing the weight of vehicles, using more aerodynamic designs and decreasing engine size without sacrificing power. “The vast majority of vehicles will be more efficient without using electric or hybrid powertrains,” said Daniel F. Becker, director of the Safe Climate Campaign, a Washington-based environmental advocacy group. “These cars won’t look any different than today unless you check under the hood.” Even if the 54.5 m.p.g. goal is reached, most cars and trucks will get lower mileage in real-life driving. Credits for air-conditioning units in vehicles will reduce the average mileage to about 49 m.p.g., and actual driving conditions could reduce it further. John M. Broder contributed reporting from Washington. 10/28/14, 1:00 PMFuel Fix » Goldman Sachs: Expect U.S. crude to fall to $70 next year Page 1 of 3http://fuelfix.com/blog/2014/10/27/goldman-sachs-expect-u-s-crude-to-fall-to-70-next-year/ Home Oil Field Pipelines Refining Power Washington Voices Jobs & Career Advice chron.com Search Fuel Fix GO Email Print 43 TweetTweet 53 Share 1 The Scream, by Edvard Munch. Goldman Sachs: Expect U.S. crude to fall to $70 next year Posted on October 27, 2014 at 2:48 pm by Ryan Holeywell in Crude oil, General, Markets HOUSTON — U.S. benchmark crude prices will fall to $70 per barrel next year, according to a new forecast published by Goldman Sachs Monday, suggesting that the recent and pronounced slide in oil prices isn’t a temporary phenomenon. The decline is due to oil production growing at a faster pace than demand, leading to global oil market that’s oversupplied. The report called the change inevitable, noting that “getting to a point where the market shifted back into surplus was only a matter of time.” The report predicts that West Texas Intermediate will fall to $70 per barrel in the second quarter of 2015, while Brent, the international crude standard, will fall to $80 per barrel during the same period. WTI was trading at $81.02 per barrel Monday afternoon, while Brent was at $85.79. Oil prices will be at their lowest points of 2015 during the second quarter. During the rest of 2015, the study predicts $75 WTI for the first quarter and second half of 2015 and $85 Brent. In the longer-term — 2016 and beyond — it forecasts WTI at $80 and Brent at $90. That slight rebound of prices will occur when OPEC countries cuts their own production, once it’s clear that a slowdown in U.S. production growth has slowed as well. Until recently, U.S. producers have benefited from oil inventories that remained relatively stable since mid-2012, as their shale production has coincided with disruptions among OPEC suppliers. At the same time, they’ve enjoyed growing global demand for crude. Today, Goldman Sachs writes, that equilibrium is unraveling. U.S. production is strong but OPEC disruptions that has once faced Libya, Iran and Nigeria have eased. Global economic growth — and thus, demand for crude oil — has slowed. As OPEC production has bounced back, core OPEC countries like Saudi Arabia aren’t expected to slow their output to keep prices high, as they might have in the past. Still, the authors noted that the forecast could certainly change, in part because of questions about the price points at which various shale operations become unprofitable. “The uncertainty around the required price to slowdown US shale oil production growth is a key risk to our updated price forecast,” Goldman Sachs wrote. FOLLOW FUEL FIX SIGN UP FOR THE FUEL FIX NEWSLETTER Your email address SIGN UP FEATURED VIDEOS CATEGORIES Select Category ShareShare 19 Lightning strike creates oil spill KOCO - Oklahoma City, OK Oil & Gas Sites A Concern In Flooding Aftermath CBS Denver Central Texans Battle High Gas Prices KWTX - Waco, TX Oil industry reactions to falling crude Share this gallery: 1 of 10 10/28/14, 12:54 PMWorld oil market chronology from 2003 - Wikipedia, the free encyclopedia Page 1 of 20http://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003 Medium term crude oil prices since May 1987. New York Mercantile Exchange prices for West Texas Intermediate since 2000, monthly overlaid on daily prices to show the variation World oil market chronology from 2003 From Wikipedia, the free encyclopedia This article is a chronology of events affecting the oil market. For a discussion of the energy crisis of the same period, see 2000s energy crisis and Effects of 2000s energy crisis. For current fuel prices see Gasoline usage and pricing. From the mid-1980s to September 2003, the inflation adjusted price of a barrel of crude oil on NYMEX was generally under $25/barrel. Then, during 2004, the price rose above $40, and then $50. A series of events led the price to exceed $60 by August 11, 2005, and then briefly exceed $75 in the middle of 2006. Prices then dropped back to $60/barrel by the early part of 2007 before rising steeply again to $92/barrel by October 2007, and $99.29/barrel for December futures in New York on November 21, 2007.[1] Throughout the first half of 2008, oil regularly reached record high prices. On February 29, 2008, oil prices peaked at $103.05 per barrel,[2] and reached $110.20 on March 12, 2008,[3] the sixth record in seven trading days.[4][5] Prices on June 27, 2008, touched $141.71/barrel, for August delivery in the New York Mercantile Exchange (after the recent $140.56/barrel), amid Libya's threat to cut output, and OPEC's president predicted prices may reach $170 by the Northern summer.[6][7] The most recent price per barrel maximum of $147.02 was reached on July 11, 2008.[8] After falling below $100 in the late summer of 2008, prices rose again in late September. On September 22, oil rose over $25 to $130 before settling again to $120.92, marking a record one-day gain of $16.37. Electronic crude oil trading was temporarily halted by NYMEX when the daily price rise limit of $10 was reached, but the limit was reset seconds later and trading resumed.[9] By October 16, prices had fallen again to below $70, and on November 6 oil closed below $60.[10] As the price of producing petroleum did not rise significantly, the price increases have coincided with a period of record profits for the oil industry. Between 2004 and 2007, the profits of the six supermajors - ExxonMobil, Total, Shell, BP, Chevron, and ConocoPhillips - totaled $494.8 billion.[11] 10/28/14, 12:54 PMWorld oil market chronology from 2003 - Wikipedia, the free encyclopedia Page 2 of 20http://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003 Oil prices for Brent in US$ (blue) and Euro (red) Contents 1 2003 2 2004 to 2008: rising costs of oil 3 2008: oil prices peak and then decline 4 2009 5 2010 6 2011 7 2012 8 2013 9 2014 10 References 11 External links 2003 United States crude oil prices averaged $30 a barrel in 2003 due to political instability within various oil producing nations. It rose 19% from the average in 2002.[12] The 2003 invasion of Iraq marked a significant event for oil markets because Iraq contains a large amount of global oil reserves.[13] The conflict coincided with an increase in global demand for petroleum, but it also reduced Iraq's current oil production and has been blamed for increasing oil prices.[14] However, oil company CEO Matthew Simmons emphasizes the peaking and decline of oil-exporting in Mexico, Indonesia and the United Kingdom is the reason for the price gouging. According to Simmons,[15] isolated events, such as the Iraq war, affect short-term prices but do not determine a long-term trend. Simmons cites the use of enhanced oil recovery techniques in large fields such as Mexico's Cantarell,[15] which maintained production for a few years until it eventually declined. Pumping oil out of Iraq may reduce petroleum prices in the short term, but will be unable to perpetually lower the price. From Simmons' point of view, the invasion of Iraq is associated with the start of long-term increase in oil prices, but it may mitigate the decline in oil production by retaining a partial amount of Iraq's oil reserves. As a direct consequence, the oil production capacity was diminished to 2 million barrels (320,000 m3) per day.[16] 2004 to 2008: rising costs of oil 10/28/14, 12:54 PMWorld oil market chronology from 2003 - Wikipedia, the free encyclopedia Page 3 of 20http://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003 July 2006, San Francisco, California After retreating for several months in late 2004 and early 2005, crude oil prices rose to new highs in March 2005. The price on NYMEX has been above $50 per barrel since March 5, 2005. In June 2005, crude oil prices broke the psychological barrier of $60 per barrel. After the destruction of Hurricane Katrina in the United States, gasoline prices reached a record high during the first week of September 2005. The average retail price was, on average, $3.04 per U.S. gallon.[17] The average retail price of a liter of petrol in the United Kingdom was 86.4p on October 19, 2006, or $6.13 per gallon.[18] Oil production in Iraq continued to decline as result of the nation's ongoing conflict causing a decrease in production to 1 million barrels per day (160,000 m3/d).[19] In mid-2006, crude oil was traded for over USD 79 per barrel (bbl),[20] setting an all-time record. The run-up is attributed to a 1.9 increase in gasoline consumption, geopolitical tensions resulting from North Korea's missile launch. The ongoing Iraq war, as well as Israel and Lebanon going to war are also causative factors. The higher price of oil substantially cut growth of world oil demand in 2006, including a reduction in oil demand of the OECD.[21] After news of North Korea's successful nuclear test on October 9, 2006, oil prices rose past $60 a barrel, but fell back the next day. On October 19, 2007, U.S. light crude rose to $90.02 per barrel due to a combination of ongoing tensions in eastern Turkey and the reducing strength of the U.S. dollar.[22] Prices fell briefly on the expectation of increased U.S. crude oil stocks, however they quickly rose to a peak of $92.22 on October 26, 2007.[23] On January 2, 2008, U.S. light crude surpassed $100 per barrel before falling to $99.69 due to tensions on New Years Day in Nigeria, and on suspicion that U.S. crude stocks will have dropped for the seventh consecutive week. A BBC report from the following day stated a single trader bid up the price; Stephen Schork, a former floor trader on the New York Mercantile Exchange and the editor of an oil market newsletter, said one floor trader bought 1,000 barrels (160 m3), the smallest amount permitted, and immediately sold it for $99.40 at a $600 loss.[24] Oil fell back later in the week to $97.91 at the close of trading on Friday, January 4, in part due to a weak jobs report that showed unemployment had risen.[25] On March 5, 2008, OPEC accused the United States of economic "mismanagement" that was pushing oil prices to record highs, rebuffing calls to boost output and laying blame at the George W. Bush administration.[26] Oil prices surged above $110 to a new inflation-adjusted record on March 12, 2008 before settling at $109.92.[27] On April 18, 2008 the price of oil broke $117 per barrel after a Nigerian militant group claimed an attack on an oil pipeline.[28] Oil prices rose to a new high of $119.90 a barrel on April 22, 2008,[29] before dipping and then rising $3 on April 25, 2008 to $119.10 on the New York Mercantile Exchange after a news report that a ship contracted by the U.S. Military Sealift Command fired at an Iranian boat.[30] On June 6, prices rose $11 in 24 hours, the largest gain in history due to the possibility of an Israeli attack on Iran.[31] The combination of two major oil suppliers reducing supply generated fears of a repeat of the 1973 oil crisis. The mid-July decision of Saudi Arabia to increase oil output caused little significant influence on prices. 10/28/14, 12:54 PMWorld oil market chronology from 2003 - Wikipedia, the free encyclopedia Page 4 of 20http://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003 March 2009, Dunellen, New Jersey According to the oil minister of the Islamic Republic of Iran, Gholam-Hossein Nozari, the world markets were saturated[32] and a Saudi promise of increased production would not lower prices.[33] Several Asian refineries were refusing Saudi petroleum in late June because they were over priced grade.[34] On July 3, "the Brent North Sea crude contract for August delivery rose to $US145.01 a barrel" in Asian trade.[35] London Brent crude reached a record of $145.75 a barrel, and Brent crude for August delivery peaked to a record $145.11 a barrel on London's ICE Futures Europe exchange, and to $144.44 a barrel on the NYMExchange.[36][37] By midday in Europe, crude rose to $145.85 a barrel on the NYME while Brent crude futures rose to a trading record of $146.69 a barrel on the ICE Futures exchange.[38][39] 2008: oil prices peak and then decline On July 15, 2008, a bubble-bursting sell-off began after remarks by President Bush the previous day that the ban on oil drilling would be lifted.[40] This precipitated an $8 drop, the biggest since the first US-Iraq war. By the end of the week, crude oil fell 11% to $128, also affected by easing of tensions between the US and Iran.[41] By August 13, prices had fallen to $113 a barrel.[42] By the middle of September, oil price fell below $100 for the first time in over six months,[43] falling below $92 in the aftermath of the Lehman Brothers bankruptcy.[44] A stronger US dollar and a likely decline in European demand were suggested to be among the causes of the decline.[45] By October 24, the price of crude dropped to $64.15,[46] and closed at $60.77 on November 6.[10] 2009 In January 2009, oil prices rose temporarily because of tensions in the Gaza Strip.[47] From mid January to February 13, oil fell to near $35 a barrel.[48] 2010 On May 21, 2010, the price of oil had dropped in two weeks from $88 to $70 mainly due to concerns over how European countries would reduce budget deficits; if the European economy slowed down, this would mean less demand for crude oil. Also, if the European economic crisis caused the American economy to have problems, demand for oil would be reduced further.[49] Other factors included the strong dollar and high inventories. 10/28/14, 12:54 PMWorld oil market chronology from 2003 - Wikipedia, the free encyclopedia Page 5 of 20http://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003 According to the U.S. Energy Information Administration, gas prices nationwide averaged $2.91 on May 10, dropping to $2.79 two weeks later. The Deepwater Horizon oil spill was not a factor in gas prices since the well had not produced.[50] Prices rose back to $90/barrel in December 2010.[51] The US average for a gallon of 87 octane regular unleaded averaged $3.00/gallon on December 23, sparking fear of a second recession if prices reached $100/barrel and $4.00/gallon gasoline, as forecasted for spring 2011. The price increases in December were based on global demand and the Arctic blasts affecting North America and Europe. 2011 Political turmoil in Egypt, Libya, Yemen, and Bahrain drove oil prices to $95/barrel in late February 2011. A few days prior, oil prices on the NYMEX closed at $86. Oil prices topped at $103 on February 24 where oil production is curtailed to the political upheaval in Libya.[52] Oil supplies remained high, and Saudi Arabia assured an increase in production to counteract shutdowns. Still, the Mideast and North African crisis led to a rise in oil prices to the highest level in two years, with gasoline prices following. Though most Libyan oil went to Europe, all oil prices reacted. The average price of gasoline in the United States increased 6 cents to $3.17.[53] On March 1, 2011, a significant drop in Libyan production and fears of more instability in other countries pushed the price of oil over $100 a barrel in New York trading, while the average price of gas reached $3.37. Despite Saudi promises, the sour type oil the country exported could not replace the more desirable sweet Libyan oil.[54] On March 7, 2011, the average price of gas having reached $3.57, individuals were making changes in their driving.[55] The weakened U.S. Dollar resulted in a spike to $112/barrel with the national average of $3.74/gallon - with expectations of damaging the U.S. economy suggestive of a long-term recession.[56] As of April 26, the national average was $3.87 - with a fear of $4/gallon as the nationwide average prior to the summer driving season.[57] The national average rose on May 5, 2011 for the 44th straight day, reaching $3.98. However, that same day, West Texas Intermediate crude fell below $100 a barrel, the lowest since March 16.[58] This came after crude oil for June delivery reached $114.83 on May 2, the highest since September 2008, before closing at $97.18 on May 6, a day after dropping 9 percent, the most dramatic single-day drop in over two years. Gas prices fell slightly on May 6, and experts predicted $3.50 a gallon by summer.[59][60][61] In mid-June, West Texas Intermediate crude for July delivery fell nearly $2 to $93.01, the lowest price since February. The dollar was up and the euro and other currencies down, and the European economic crisis made investors concerned. London Brent crude fell 81 cents to $113.21. On June 15 the Energy Information Association said oil consumption was down 3.5 percent from a year earlier, but wholesale gasoline demand was up for the first time in several weeks. The price of gas on June 17 was $3.67.5 a gallon, 25.1 cents lower than a month earlier but 96.8 cents above a year earlier.[62] On June 24, the price of gas was $3.62.8 and expected to go much lower due to the opening of the Strategic Petroleum Reserve. U.S. oil prices fell below $90 before 10/28/14, 12:54 PMWorld oil market chronology from 2003 - Wikipedia, the free encyclopedia Page 6 of 20http://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003 Brent versus WTI rising again, and Brent crude fell two percent.[63] However, on June 29, West Texas intermediate crude had risen to $94.96, almost $5 above the lowest point reached after the previous week's action. One reason was the falling dollar, as Greece appeared less likely to default on its debt; concern over the Greek debt crisis had caused falling oil prices.[64][65] After another week, oil for August delivery had risen from $90.61 to $98.67 and gas prices were up five cents. Increased worldwide demand was one reason.[66] Brent Crude remained high at $118.38 partly due to supply problems in Europe, including lower North Sea production and the continuing war in Libya.[67] On August 4, the price of oil dropped 6 percent to its lowest level in 6 months. On August 5, the price had dropped $8.82 in a week to $86.88 per barrel on the New York Mercantile Exchange. The same pessimistic economic news that caused stock prices to fall also decreased expected energy demand, and experts predicted a gas price drop of 35 cents per gallon from the average of $3.70.[68] On August 8, oil fell over 6 percent, in its largest drop since May, to $81, its lowest price of the year.[69] On September 24, oil reached $79.85, down 9 percent for the week, due to concerns about another recession and the overall world economy. The average price of gas was $3.51, with predictions of $3.25 by November, but it was below $3 in some markets.[70] During October, the price of oil rose 22 percent, the fastest pace since February, as worries over the U.S. economy decreased, leading to predictions of $4 by early 2012. As of November 8, the price reached $96.80. Gas prices were not following the increase, due to lower demand resulting from the economy, the normal decrease in travel, lower oil prices in other countries, and production of winter blends which cost less. The average rose slightly to $3.41 but predictions of $3.25 were made.[71] 2012 Shortages of oil could have resulted if Iran closed the Strait of Hormuz, through which one-fifth of exported oil travels, as a result of sanctions due to the country's nuclear policies. The price of oil stayed near $100 throughout January because of concerns over supplies, and the European debt situation. The average price of gas was $3.38 on January 20, up 17 cents from a month earlier.[72][73] Another factor was planned closing of refineries in the U.S. and Europe due to lower demand.[74] By early February, the national average was $3.48, though oil prices were at $98, the lowest in six weeks, and U.S. demand was the lowest since September 2001.[75] On February 20, benchmark March crude oil reached $105.21, the highest in nine months. This came one day after Iran's oil ministry announced an end to sales to British and French companies; though this would have little actual impact on supplies, fears resulted in higher prices. Also, approval of the bailout plan for Greece was expected, and China's action to raise the money supply was likely to stimulate the economy.[76] Brent crude was up 11 percent for the year to $119.58 on February 17, with cold weather in Europe and higher Third World demand, and West Texas Intermediate crude was up 19 percent to $103.24. The average price of gas was 10/28/14, 12:54 PMWorld oil market chronology from 2003 - Wikipedia, the free encyclopedia Page 7 of 20http://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003 $3.53.[77] On February 29, the average was $3.73.[78] The average peaked at $3.94 early in April,[79][80][81][82] and on April 24, it was $3.85 compared to $3.86 a year earlier; it had been two years since gas prices were lower than the previous year. Crude oil prices were down; West Texas Intermediate was $103.55 a barrel,[83] down from over $107 late in March,[84] and Brent Crude $118.16[83] after peaking above $128 in March.[85] On May 7, benchmark U.S. crude reached $95.34, the lowest price of the year, after voters in France and Greece ousted government officials who would cut spending to solve the debt crisis.[86] Benchmark oil in New York actually rose for two days straight early in June, to $84.29. With U.S. oil supplies the highest since 1990, gas reached $3.57 on June 5.[87] After falling again to its lowest price since October 2011, Benchmark crude rose 5.8 percent to $82.18 on June 29, with Brent crude up 4.5 percent to $95.51. European bailout efforts included lending money to banks, decreasing likelihood of failures. Also, European countries decided not to buy Iranian oil. The price of gas was $3.35, the lowest since January 6.[88] On July 17, Benchmark Crude reached $89.22 and Brent crude $104 after good economic news in the United States. Gas rose to $3.40.[89] On August 7, a California refinery fire contributed to a jump in oil futures. Other refinery problems, a pipeline leak, fears about Iran, the crisis in Syria, North Sea problems, and Tropical Storm Ernesto all contributed to a 20 percent jump in oil prices in six weeks. The price of gas reached $3.63 but was not expected to go much higher.[90] Good economic news in the United States contributed to oil reaching its highest price since May on August 17, with Benchmark Crude reaching $96.01, while Brent crude fell slightly to $113.71.[91] Early in September, a mix of bad economic news from the United States and good economic news from Europe caused the price of oil to fall slightly. On September 4, Benchmark Crude reached $95.41, with Brent crude at $114.84. The price of gas went down slightly to $3.82[92] but was still the highest ever for Labor Day weekend.[93] Hurricane Isaac contributed to a temporary spike in gas prices, but on September 12 gas once again rose, to $3.86, as refineries cut production prior to the switch from summer blend gasoline to winter blend. Benchmark Crude also reached its highest level since early May and continued to rise above $99 after Federal Reserve announcements of actions to improve the economy and the 2012 diplomatic missions attacks. Brent crude rose slightly to nearly $116.[94][95][96] Early in October, the average gas price was $3.78 and falling, though still a record for the month.[97] Late in the month, the average reached $3.62 after a 13-cent drop in a week, the most since November 2008. Brent crude was down $8 in the previous month.[98] By the start of November, the average was $3.54, partly due to lower demand after Hurricane Sandy.[99] Crude oil futures fell after Barack Obama was re-elected November 6.[100] After Thanksgiving, lower U.S. oil inventories, good economic news in the United States and good news relating to the Greek bailout helped push Brent crude up to $111.04, and benchmark oil for January delivery to $87.92; benchmark oil reached $86.24 on November 28, and gas was $3.41.[101][102] On December 13, Brent crude was down to $109.20, while benchmark oil fell slightly due to U.S. fiscal cliff concerns and rose due to Federal Reserve efforts to help the U.S. economy, ending the day at $86.77.[103] In mid-December, gas prices reached $3.25, the lowest for 2012.[104] Oil was trading for between $84 and $90.[105] 10/28/14, 12:54 PMWorld oil market chronology from 2003 - Wikipedia, the free encyclopedia Page 8 of 20http://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003 2013 On January 17, with good economic news in the United States, Benchmark oil reached its highest level since September, going over $95. Brent crude rose above $110. Gas was at $3.29.[106] Refinery shutdowns led to a dramatic rise in gas prices. Late in February, gas was at $3.78, up 14 cents from a week earlier.[107][108] On February 25, with European stock markets doing well, Benchmark crude for April rose above $94 after a significant drop the previous week due to news the Federal Reserve might end its stimulus efforts, making the dollar stronger. Brent crude was over $115.[109] Two days later gas reached its highest point, $3.79 a gallon. By mid-April, with low demand expected due to negative economic news, gas was down to $3.56 as Brent crude fell to $103.04, its lowest price since July.[110] With economic problems worldwide leading to low demand, gas prices fell 3 percent in April, the most in a month in ten years, to the lowest level for that month since 2010.[111] Before Memorial Day, when gas was $3.63,[112] gas supplies fell even though oil supplies were the highest in 35 years. U.S. economic news was also negative. On May 30, Benchmark crude for July rose slightly to $93.61 after falling the previous day, and Brent crude fell slightly to $102.19.[113] On June 5 the price of oil rose again with supplies lower. Benchmark crude rose above $94. The price of gas was $3.62.[114] On June 12, the International Energy Agency said demand for oil would still rise in 2013, but not as much as previously believed due to the economy. Also, May OPEC production was the highest in seven months. Benchmark crude fell slightly to $95.31, and Brent crude rose to $103.27.[115] On June 20, with the Federal Reserve stating that its stimulus program could end if the U.S. economy continued to improve, as well as economic problems in China, Benchmark crude fell below $97. Brent crude fell to $104.24.[116] On July 10, oil prices were the highest in more than a year as a result of lower supplies and trouble in Egypt. In the past week, Brent crude had climbed 7 percent to $108.51. Because too much oil was being produced for the infrastructure to handle it, West Texas Intermediate was lower than Brent crude for several years; it has returned to being consistent with Brent.[117][118] On July 5 it reached $103.22.[119] On July 19 with good economic news in the United States, Benchmark crude reached $108.05, while gas was $3.67, the highest on a Friday since March 22. Brent crude was at $108.07.[120] Gas was $3.63 on August 1, though good economic news in the U.S., China and Europe meant oil was going up again after a decline the previous week. Benchmark crude reached $107.89, while Brent crude was $109.54.[121] On August 16 Benchmark oil was $107.46 after six days of increases as Egypt's problems continued. The concern was access to the Suez Canal, which appears unlikely to be a problem but still concerns companies. Brent crude was $110.48 on August 19.[122] On August 28 West Texas intermediate reached $110.10, the highest since May 2011, and Brent crude reached $116.61, its highest point since February 19, due to concern about U.S. involvement in Syria. Meanwhile, inventories in the United States had their biggest increase in four months.[123] Benchmark crude rose to $107.56 on September 11 due to lower supplies after dropping due to hopes for a peaceful Syria solution; Brent crude rose to $111.50.[124] 10/28/14, 12:54 PMWorld oil market chronology from 2003 - Wikipedia, the free encyclopedia Page 9 of 20http://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003 Gas was $3.59 at the start of the month, but at the end of September, the price of gas was $3.39, the lowest for the time of year since 2010. The New York Mercantile Exchange price on September 27 was $102.87. Refineries had no hurricanes or other problems.[125][126] Benchmark crude fell to $103.31 on October 3 after the U.S. government shutdown, and Brent crude was $109.[127] On October 21, Benchmark crude was $99.22, the first time below $100 since July. Higher supplies and fewer threats from the Middle East were the reasons. Brent crude was $109.64 and gas reached $3.35.[128] On November 13, Brent crude reached $107.12 and was $13.24 higher than West Texas Intermediate, the largest difference since April, due to trouble in Libya and sanctions against Iran.[129] On November 25, Benchmark crude decreased to $93.92 while Brent crude reached $110.41 after the agreement regarding Iran's nuclear program.[130] On December 16, Benchmark crude rose to $97.44 and Brent crude reached $110.53 with good economic news from Europe and more Libya trouble. Gas was $3.23, three cents higher than a month earlier.[131] On December 27, due to a better economy in the United States leading to higher demand, oil closed about $100 for the first time since October. Gas was $3.27, two cents below a year earlier.[132] 2014 On January 2, Benchmark crude fell by the most in one day since November 2012 to close at $95.44. Brent crude was $107.78. Gas was $3.33.[132] With the Iran agreement and increased production from Libya and the North Sea, Benchmark oil was around $92 on January 13 and Brent crude was $105.98.[133] After good economic news from Japan, Benchmark crude fell slightly from its highest close of 2014, $98.23 on January 30. Brent crude fell to $107.25. The difference between the two fell below $10 for the first time since November, partly due to cold weather in the United States which resulted in high heating oil demand.[134] Early in February gas was $3.27.[135] Cold weather led to the price of oil staying above $100 for most of February, but lower prices were expected. With United States fourth quarter economic growth expected to be lower than an early estimate, Benchmark crude fell slightly on February 27 to $102.40, with Brent crude reaching $108.61.[136] On March 24, due to the dispute over Crimea, problems in Libya, and the Houston Ship Channel collision, Benchmark crude rose above $100 and Brent crude rose to $107.41. Economic problems in China kept prices from going even higher.[137] Later in the week, good economic news from the United States, lower oil supplies in Oklahoma and a force majeure by Shell Nigeria pushed prices slightly higher, to $102.12 for Benchmark crude and $108.29 for Brent.[138] On April 7, Benchmark crude fell below $101 and Brent crude fell to $105.64 with news that Libya might open more terminals in May,[139] but more Ukraine problems pushed the prices back up on April 8.[140] Gas was $3.59, matching the level in 2013.[135] Continued Ukraine problems pushed oil higher on April 24, with Benchmark crude at $101.94 and Brent crude at $110.33, though an April 23 report said U.S. oil supplies were higher than expected. The price of gas was $3.68.5, the highest since March 2013.[141] On April 30, Benchmark crude dropped below $100 for the first time in three weeks as oil supplies continued to rise and the unusually cold winter resulted in negative U.S. economic news. Gas was up 14 cents for the month, the most in three years.[142] More Ukraine trouble pushed 10/28/14, 12:54 PMWorld oil market chronology from 2003 - Wikipedia, the free encyclopedia Page 10 of 20http://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003 Benchmark crude above $100 and Brent crude over $108 on May 12,[143] and further problems in Libya helped push Benchmark crude over $102 and Brent crude over $110 by May 15, though negative economic news in the U.S. and an unexpected increase in oil stockpiles pushed Benchmark crude back down temporarily.[144][145] Continued concerns over Ukraine and Libya pushed oil back above $104.[146] The price of gas was $3.65.[112] Trouble in Iraq resulted in higher prices for oil and gas in June. West Texas crude reached $106 and Brent crude $115.75. At the end of the month Benchmark crude was just above $105 while Brent crude fell below $113.[147][148] The price of gas was $3.66.[149] After three weeks of going down, U.S. crude fell below $100 for the first time since May on July 15. However, with Middle East and Ukraine problems sending oil higher, Benchmark crude finished July 18 just above $103, with Brent crude staying above $107.[150] With low demand and plentiful supplies, and despite good economic news from China and the United States, Brent crude fell below $107 on July 24, and U.S. crude dropped to $102.10.[151] On July 28, gas was $3.52, down five cents from a week earlier, due to refiners cutting prices.[152] Two weeks later gas was $3.48, less than a year earlier.[153] And on August 14, light sweet oil was $95.58, the lowest since January, while Brent crude reached $102.01, the lowest since June, after falling the most in one day since January. Production in Libya was up, and economic slowdowns were expected in Europe and China, making even lower prices likely.[154] As of Labor Day, gas was $3.41, 18 cents lower than in 2013. Low demand and high North American production cancelled out effects of troubles in the Middle East and Ukraine. West Texas crude was below $94 on August 27 and Brent crude below $103.[147] On October 16, West Texas crude fell below $80 for the first time in more than two years, while Brent crude reached $82.60, the lowest since November 2010. OPEC Members were not expected to act as increases in the U.S. supply resulting from high oil shale production added to a worldwide surplus.[155] References 1. ^ "Oil reaches new record above $99" (http://news.bbc.co.uk/2/hi/business/7105044.stm). BBC. November 21, 2007. Retrieved 2007-11-29. 2. ^ "Oil prices pushed to fresh high" (http://news.bbc.co.uk/2/hi/business/7270392.stm). BBC News. 2008-02-29. Retrieved 2009-12-31. 3. ^ David Goldman (March 12, 2008). 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"Oil price rises on housing outlook" (http://www.beaumontenterprise.com/business/article/Oil-price-rises-on-housing-outlook-3713204.php). Beaumont Enterprise. Associated Press. 90. ^ Steve Hargreaves (August 7, 2012). "Gas prices climb 30 cents a gallon" (http://money.cnn.com/2012/08/07/news/economy/gas-prices/?source=cnn_bin). CNNMoney. 91. ^ Samantha Bomkamp (August 7, 2012). "Oil rises; U.S. considers release from reserves" (http://www.myrtlebeachonline.com/2012/08/17/3005587/oil-rises-us-considers-release.html). The Sun News. Associated Press. 92. ^ Jonathan Fahey (September 4, 2012). "Oil slides on economic concerns" (http://www.boston.com/business/news/2012/09/04/oil-prices-slide-economic- concerns/KOImYzMEdNcSH9MVD6UxlL/story.html). Boston Globe. Associated Press. 93. ^ Jonathan Fahey (September 4, 2012). "U.S. gas prices at highest ever for Labor Day weekend" (http://www.foxnews.com/us/2012/09/03/us-gas-prices-at-highest-ever-for-labor-day-weekend/). Fox News. Associated Press. 94. ^ Chris Isidore (September 12, 2012). "Gas spike hits drivers" (http://money.cnn.com/2012/09/11/news/economy/gas- prices/index.html). CNNMoney. 10/28/14, 12:54 PMWorld oil market chronology from 2003 - Wikipedia, the free encyclopedia Page 16 of 20http://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003 95. ^ "Oil climbs above $99; gasoline at avg. $3.86" (http://www.stltoday.com/news/oil-price-up-after-attack-on-us- consulate-in-libya/article_542991f4-5a26-55cd-8bb3-6f004570919e.html). St. Louis Post-Dispatch. Associated Press. September 17, 2012. 96. ^ "Oil rises after Fed takes steps to boost economy" (http://www.usnews.com/news/business/articles/2012/09/13/oil- price-up-after-attack-on-us-consulate-in-libya). U.S. News & World Report. Associated Press. September 13, 2012. 97. ^ Jason Dearen (October 4, 2012). "Calif gas prices spike 8 cents a gallon overnight" (http://www.seattlepi.com/news/article/Calif-gas-prices-spike-8-cents-a-gallon-overnight-3919533.php). Seattle Post- Intelligencer. Associated Press. 98. ^ Steve Everly and The Associated Press (October 26, 2012). "Gasoline prices dive toward $3 a gallon" (http://www.kansascity.com/2012/10/25/3885791/gasoline-prices-dive-toward-3.html). The Kansas City Star. 99. ^ "Gas prices plunge, partly due to Sandy" (http://www.nbcnews.com/business/gas-prices-plunge-partly-due-sandy- 1C6855748). NBC News. Reuters. 100. ^ Jerry A. Dicolo (November 7, 2012). "Oil Prices Slump" (http://online.wsj.com/article/SB10001424127887324439804578104783227265730.html?mod=googlenews_wsj). Wall Street Journal. 101. ^ Pablo Gorondi (November 27, 2012). "Oil prices up on brisk US retail sales, Greek deal" (http://www2.counton2.com/business/2012/nov/27/oil-prices-up-on-brisk-us-retail-sales-greek-deal-ar-5055276/). WCBD. Associated Press. 102. ^ Pablo Gorondi (November 27, 2012). "'Fiscal cliff' worries pressure oil prices" (http://www.kansascity.com/2012/11/27/3937509/oil-near-87-after-oecd-cuts-growth.html). The Kansas City Star. Associated Press. 103. ^ Pablo Gorondi (December 13, 2012). "Oil slips on US talks impasse, weak demand outlook" (http://www.miamiherald.com/2012/12/12/3138508/oil-price-rises-above-86-on-fed.html). Miami Herald. Associated Press. 104. ^ "Oil rises on new hope of ‘fiscal cliff’ resolution; pump prices hit $3.25 a gallon, 2012 low" (http://www.washingtonpost.com/business/oil-rises-to-near-87-a-barrel-amid-hopes-for-increased-economic-stimulus-in- japan-china/2012/12/17/057750f2-4828-11e2-8af9-9b50cb4605a7_story.html). The Washington Post. Associated Press. December 17, 2012. 105. ^ "Oil Prices Lifted by Progress on Fiscal Cliff Talks" (http://www.foxbusiness.com/news/2012/12/17/oil-prices-lifted- by-progress-on-fiscal-cliff-talks/). Fox Business. Dow Jones Newswires. December 17, 2012. 106. ^ "Oil prices rise above $95 on strong US housing data and encouraging signs for job market" (http://www.washingtonpost.com/business/oil-falls-to-94-a-barrel-as-us-supplies-remain-ample/2013/01/17/ba0e8178- 6071-11e2-bc4f-1f06fffb7acf_story.html). The Washington Post. Associated Press. January 17, 2013. 107. ^ Jonathan Fahey (February 21, 2013). "Oil prices down sharply for a 2nd day" (http://www.newsobserver.com/2013/02/21/2695802/oil-prices-drop-below-95-per-barrel.html). News & Observer. Associated Press. 10/28/14, 12:54 PMWorld oil market chronology from 2003 - Wikipedia, the free encyclopedia Page 17 of 20http://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003 108. ^ Pablo Gorondi (February 22, 2013). "Oil levels off after 2 days of steep losses" (http://www.newsobserver.com/2013/02/22/2698121/oil-snaps-2-days-of-steep-losses.html). News & Observer. Associated Press. 109. ^ Pablo Gorondi (February 25, 2013). "Oil price gains to above $94 on weaker dollar" (http://www.newsobserver.com/2013/02/25/2706035/oil-gains-shrugs-off-weak-china.html). News & Observer. Associated Press. 110. ^ Jonathan Fahey (April 13, 2013). "Oil Falls 2 Percent, Gas Prices to Keep Dropping" (http://abcnews.go.com/US/wireStory/oil-falls-percent-gas-prices-dropping-18944278). ABC News. Associated Press. 111. ^ Javier David (April 30, 2013). "Gas Prices See Cheapest April in Three Years: AAA" (http://www.cnbc.com/id/100690734). CNBC. 112. ^ a b Jonathan Fahey (May 24, 2014). "Gasoline Prices Have Familiar Look as Summer Nears" (http://abcnews.go.com/Health/wireStory/gasoline-prices-familiar-summer-nears-23854802). ABC News. Associated Press. 113. ^ "Oil rises on signs US economy still needs stimulus" (http://www.seattlepi.com/business/energy/article/Oil-rises-on- signs-US-economy-still-needs-stimulus-4561882.php). Seattle Post-Intelligencer. Associated Press. May 30, 2013. 114. ^ "Oil rises as US supplies of oil, gasoline drop" (http://www.chron.com/business/article/Oil-rises-as-US-supplies-of-oil- gasoline-drop-4579388.php?World_Business_News=). Houston Chronicle. Associated Press. June 5, 2013. 115. ^ "Oil price down slightly on lower demand forecast" (http://www.stltoday.com/news/oil-price-rises-on-drop-in-us- supplies/article_542991f4-5a26-55cd-8bb3-6f004570919e.html). St. Louis Post-Dispatch. Associated Press. June 12, 2013. 116. ^ Pablo Gorondi (June 20, 2013). "Price of oil down below $97 a barrel after Federal Reserve says stimulus pullback likely" (http://www.startribune.com/politics/national/212285101.html). Star Tribune. Associated Press. 117. ^ Steve Hargreaves (July 10, 2013). "Oil prices surge above $105, gasoline tops $3.50" (http://money.cnn.com/2013/07/10/news/economy/oil-prices/). CNNMoney. 118. ^ Anna Louie Sussman (July 10, 2013). "Update 9-U.S. crude soars to 16-mth high; discount to Brent under $2" (http://www.reuters.com/article/2013/07/10/markets-oil-idUSL4N0FG11G20130710). Reuters. 119. ^ Grant Smith and Ben Sharples (July 9, 2013). "WTI Crude Trades Near 14-Month High Before U.S. Inventory Data" (http://www.businessweek.com/news/2013-07-08/wti-trades-near-14-month-high-as-u-dot-s-dot-stockpiles-seen- declining). Bloomberg Businessweek. Reuters. 120. ^ "Oil little changed near $108; pump price at $3.67" (http://www.seattlepi.com/business/energy/article/Oil-little- changed-near-108-pump-price-at-3-67-4674794.php). Seattle Post-Intelligencer. Associated Press. July 19, 2013. 121. ^ "Oil rises nearly 3 pct. on global manufacturing strength and US jobs data" (http://www.washingtonpost.com/world/the_americas/oil-price-pushes-toward-106-after-us-economy-shows-steady- growth-in-2q/2013/08/01/ae87cce8-fa6c-11e2-89f7-8599e3f77a67_story.html). Washington Post. Associated Press. August 1, 2013. 122. ^ "Oil price falls as stock markets stall" (http://www.cbsnews.com/8301-34227_162-57599086/oil-price-falls-as-stock- markets-stall/). CBS News. August 19, 2013. 10/28/14, 12:54 PMWorld oil market chronology from 2003 - Wikipedia, the free encyclopedia Page 18 of 20http://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003 123. ^ Grant Smith (August 29, 2013). "WTI Oil Falls From 2-Year High as Syria Strike Debated" (http://www.bloomberg.com/news/2013-08-29/wti-oil-drops-from-two-year-high-u-s-crude-stockpiles-advance.html). Bloomberg News. 124. ^ "Oil posts slight gain as market watches Syria" (http://www.washingtonpost.com/world/middle_east/price-of-oil- drops-to-near-107-per-barrel-after-diplomatic-efforts-strengthen-over-syria/2013/09/11/475d49e4-1aa1-11e3-80ac- 96205cacb45a_story.html). Washington Post. Associated Press. September 11, 2013. 125. ^ Jonathan Fahey (September 27, 2013). "Gas Prices Fall as Weather, Output Calm Markets" (http://abcnews.go.com/Business/wireStory/gas-prices-fall-weather-output-calm-markets-20400071). ABC News. Associated Press. 126. ^ "Gas prices have fallen 29 days in a row" (http://www.wrbl.com/story/23584915/gas-prices-have-fallen-29-days-in-a- row). WRBL. Associated Press. October 1, 2013. 127. ^ "Crude oil slips below $104 a barrel as US government shutdown continues" (http://www.washingtonpost.com/world/asia_pacific/price-of-oil-falls-below-104-per-barrel-after-report-shows-us-crude- inventories-rising/2013/10/03/607a17d6-2bef-11e3-b141-298f46539716_story.html). Washington Post. Associated Press. October 3, 2013. 128. ^ "Oil: Price drops below $100 for 1st time since July" (http://www.tulsaworld.com/business/oilandgasactivity/oil-price- drops-below-for-st-time-since-july/article_5998c5a4-3a8e-11e3-b441-0019bb30f31a.html). Tulsa World. Associated Press. October 21, 2013. 129. ^ Mark Shenk (November 13, 2013). "Crude Rises as Fuel-Price Gain Spurs Demand for Oil" (http://www.bloomberg.com/news/2013-11-13/brent-wti-crude-spread-gains-to-seven-month-high-on-libya.html). Bloomberg News. 130. ^ "Oil prices drop after Iran nuclear deal" (http://longisland.news12.com/news/oil-prices-drop-after-iran-nuclear-deal- 1.6490998?firstfree=yes). News 12 Long Island. Associated Press. November 25, 2013. 131. ^ "Oil Above $97 on Europe Hopes, Libyan Disruption" (http://abcnews.go.com/Business/wireStory/oil-97-europe- hopes-libyan-disruption-21234639). ABC News. Associated Press. December 16, 2013. 132. ^ a b Pablo Gorondi (January 2, 2014). "Oil price falls below $96" (http://www.newsobserver.com/2014/01/02/3500681/oil-prices-start-year-with-rise.html). News & Observer. Associated Press. 133. ^ "Oil Prices Remain Near $92 on Iran, Libya Outlook" (http://abcnews.go.com/International/wireStory/oil-price-falls- 92-21510366). ABC News. Associated Press. January 13, 2014. 134. ^ Pablo Gorondi (January 31, 2014). "Oil slips below $98 after climbing to 2014 high" (http://finance.yahoo.com/news/oil-slips-below-98-climbing-113214451.html). Yahoo News. Associated Press. 135. ^ a b "Scant relief: Summer gas prices expected to dip just a penny" (http://www.dallasnews.com/business/business- headlines/20140408-scant-relief-summer-gas-price-to-dip-a-penny.ece). The Dallas Morning News. April 8, 2014. 136. ^ Pablo Gorondi (February 27, 2014). "Oil Down Ahead of Expected Trimming in US Growth" (http://abcnews.go.com/International/wireStory/oil-prices-stay-102-demand-expectations-22695229). ABC News. Associated Press. 10/28/14, 12:54 PMWorld oil market chronology from 2003 - Wikipedia, the free encyclopedia Page 19 of 20http://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003 137. ^ Pablo Gorondi (March 24, 2014). "Crude oil rises to above $100 a barrel amid Russia, Libya supply risks and Texas oil spill" (http://www.usnews.com/news/business/articles/2014/03/24/oil-near-99-after-china-manufacturing-drops). U.S. News. Associated Press. 138. ^ Pablo Gorondi (March 28, 2014). "Oil Price Rises on Nigeria Supply Woes, US Growth" (http://abcnews.go.com/International/wireStory/oil-price-rises-nigeria-supply-woes-us-growth-23097633). ABC News. Associated Press. 139. ^ Pablo Gorondi (April 7, 2014). "Oil Prices Slip Below $101 After Libyan Deal" (http://abcnews.go.com/International/wireStory/oil-prices-slip-101-libyan-deal-23219528). ABC News. Associated Press. 140. ^ Pablo Gorondi (April 8, 2014). "Oil up Above $101 on Renewed Unrest in Ukraine" (http://abcnews.go.com/US/wireStory/oil-prices-asia-ahead-weekly-us-data-23232841). ABC News. Associated Press. 141. ^ "Oil Near $102 on Ukraine Crisis; US Gas Prices Up" (http://abcnews.go.com/Business/wireStory/oil-prices-recoup- earlier-losses-ukraine-woes-23450107). ABC News. Associated Press. April 24, 2014. 142. ^ "Oil below $100; gas prices near peak, AAA says" (http://www.washingtonpost.com/world/europe/oil-price-eases- following-russia-sanctions/2014/04/30/e55e5e50-d02f-11e3-a714-be7e7f142085_story.html). Washington Post. Associated Press. April 30, 2014. 143. ^ Pablo Gorondi (May 12, 2014). "Ukraine Jitters Push Crude Oil Above $100" (http://abcnews.go.com/Business/wireStory/ukraine-jitters-push-crude-oil-100-23686285). ABC News. Associated Press. 144. ^ "Oil below $102 on weak US economic data" (http://mtstandard.com/business/oil-below-on-weak-us-economic- data/article_40a4c315-b7d5-5cc4-9903-91acaf01cc02.html). The Montana Standard. Associated Press. May 15, 2014. 145. ^ Pablo Gorondi (May 20, 2014). "Oil Steady Above $102 as Libya Tensions Flare" (http://abcnews.go.com/International/wireStory/oil-hovers-102-libya-tensions-flare-23789430). ABC News. Associated Press. 146. ^ Pablo Gorondi (May 28, 2014). "Oil higher above $104 on crises in Ukraine, Libya" (http://bigstory.ap.org/article/oil- stays-above-104-crises-ukraine-libya-0). Associated Press. 147. ^ a b Gary Strauss (August 27, 2014). "Labor Day gas prices cheapest since 2010" (http://www.usatoday.com/story/money/business/2014/08/27/labor-day-gas-prices-cheapest-since-2010/14679557/). USA Today. 148. ^ "Oil price weakens ahead of China data" (http://www.cbsnews.com/news/oil-price-weakens-ahead-of-china-data/). CBS News. Associated Press. June 30, 2014. 149. ^ "Highest gas prices since 2008 expected for July 4th weekend" (http://www.baltimoresun.com/business/bs-bz-gas- prices-rise-20140701,0,1198068.story). Baltimore Sun. July 1, 2014. 150. ^ Jonathan Fahey (July 18, 2014). "Oil Price Remains High on Global Turmoil" (http://abcnews.go.com/Business/wireStory/oil-rises-past-103-geopolitical-turmoil-24608764). ABC News. Associated Press. 151. ^ Anna Louie Sussman (July 24, 2014). "UPDATE 7-Brent oil dips below $107, market well-supplied" (http://www.reuters.com/article/2014/07/24/markets-oil-idUSL4N0PZ1I520140724). Reuters. 152. ^ "Gas prices down thanks to refinery competition" (http://www.wlwt.com/news/gas-prices-down-thanks-to-refinery- competition/27177876#!bqX2Kp). WLWT. July 28, 2014. 10/28/14, 12:54 PMWorld oil market chronology from 2003 - Wikipedia, the free encyclopedia Page 20 of 20http://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003 153. ^ Jesse Solomon (August 12, 2014). "Iraq crisis: Why aren't gas prices spiking?" (http://money.cnn.com/2014/08/11/investing/iraq-oil-prices/). CNNMoney. 154. ^ Nicole Friedman (August 14, 2014). "Oil Prices Keep Tumbling to Multi-Month Lows" (http://online.wsj.com/articles/oil-lower-after-unexpected-rise-in-u-s-stockpiles-1408011661). The Wall Street Journal. 155. ^ Grant Smith (October 16, 2014). "WTI Crude Falls Below $80 for First Time Since June 2012" (http://www.businessweek.com/news/2014-10-15/wti-extends-rout-from-two-year-low-amid-rising-u-dot-s-dot- supplies). Bloomberg Businessweek. External links U.S. DOE EIA energy chronology and analysis (http://www.eia.doe.gov/emeu/cabs/MEC_Past/index.html) Oil Price History and Analysis (http://www.wtrg.com/prices.htm) Retrieved from "http://en.wikipedia.org/w/index.php? title=World_oil_market_chronology_from_2003&oldid=630948727" Categories: Oil market timelines 2000s energy crisis This page was last modified on 24 October 2014 at 16:16. Text is available under the Creative Commons Attribution-ShareAlike License; additional terms may apply. By using this site, you agree to the Terms of Use and Privacy Policy. Wikipedia® is a registered trademark of the Wikimedia Foundation, Inc., a non-profit organization. POSSIBLE MODIFICATIONS TO VARIOUS PROVISIONS IN RESPONSE TO E&B’S CORRESPONDENCE OF OCTOBER 24, 2014 DEVELOPMENT AGREEMENT TEXT 4.1.2 (c) The proposed purchaser, transferee or assignee has a documented record of performance failures operating oil drilling and production projects at other locations that resulted in substantial environmental damage, injuries to person or property or other conditions or circumstances detrimental to public health, safety and welfare; 5.1.3 (last sentence) Additionally, in the event of a court finding in an action brought by the City (1) a violation of this development agreement or the conditions of approval in Exhibit D to this Agreement resulting in a condition detrimental to the public health or safety and following notice and an opportunity to cure pursuant to Section 5.1.2, or (2) a violation of an order issued under Hermosa Beach Oil Code Section 21-A- 10.1 (following disposition of an appeal if any filed under Section 21-A-10.2), a court may impose civil penalties up to $10,000/per day for each day in which E&B is determined to be non-compliant. Any such civil penalty may not be collected until a final adjudication by the courts. 5.1.4.2 (punitive damages sentence) “In no event shall the City be entitled to consequential or punitive damages for any breach of this Agreement; provided that nothing herein shall preclude an award of punitive or consequential damages arising from tortious conduct. 6.26 Within 15 days of receipt, E&B shall notify the City Manager and City Attorney of any lawsuits, formal claims, notices of violation or notifications of administrative or governmental agency investigations concerning alleged or actual violations of any law or permit condition arising from or relating to E&B’s oil and gas drilling or production operations within the State of California (excluding claims and lawsuits involving workers’ compensation claims or other employment claims). Together with the notification required by this Paragraph 6.26, E&B shall provide City with two (2) copies (one to City Manager, one to City Attorney) of the document initiating such lawsuit, claim, notice of violation or notification of administrative or governmental agency investigation, if such documents are in E&B’s possession, custody or control; otherwise, copies of such documents shall be submitted to City within three (3) days of receipt by E&B. Any additional documents pertaining to the matter, including documents filed by E&B in response to any such lawsuit, claim, notice of violation or notification of administrative or governmental agency investigation, as well as the final decision, determination, agency or administrative action of findings, shall be submitted to City upon request. E&B’s routine correspondence to said agencies need not be routinely submitted to City, but shall be made available to City promptly upon City’s written request. EXHIBIT C TO DEVELOPMENT AGREEMENT Paragraph 1: Accelerated Unrestricted Royalty Payments Commencing with Issuance of City Drilling Permit for First Well: E&B shall pay to the City a non-refundable, accelerated royalty payment of One Million Dollars ($1,000,000) as an advance against future Unrestricted Royalties, as further defined hereinafter, starting on the date of the issuance by the City of the drilling permit for the first well and continuing on the anniversary of that date until the Minimum Royalty payment in the Lease commences (“Accelerated Royalty Payment” or collectively, “Accelerated Royalty Payments”). (For clarity, this period is estimated to continue for approximately five years, for a total of Five Million Dollars ($5,000,000).) The Accelerated Royalty Payments are being advanced only against the Unrestricted Royalties described in Paragraph 1 and Paragraph 2(i) of Exhibit B of the Lease. The Accelerated Royalty Payments are not restricted and may be used in accordance with applicable City laws. Each $1,000,000 Accelerated Royalty Payment would be adjusted by any Unrestricted Royalties received by the City in that year to ensure that the City receives a minimum of $1,000,000 each year into the City’s general fund. The Accelerated Royalty Payments shall be repaid by the City from the Unrestricted Royalties without interest, subject to the repayment process set forth in Section 13.d(4) of the Lease, as modified by this paragraph. If Unrestricted Royalties are not sufficient to repay the Accelerated Royalty Payments, then the City is not required to repay the Accelerated Royalty Payments. Paragraph 2: Bonus Payments During Years 4-13 of the Lease To Ensure $1,000,000 Amount: The Lease provides for a “Minimum Royalty” of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled and continuing to the 13th anniversary (“Years 4-13”). If all royalties, as specified in Exhibit B to the Lease, paid to the City during Years 4-13 do not exceed One Million Dollars ($1,000,000), E&B shall pay to the City an additional bonus amount equal to the difference between the Minimum Royalty and One Million Dollars ($1,000,000) (“Bonus Payment”). For clarity, given that the Minimum Royalty is Five Hundred Thousand Dollars ($500,000), this Bonus Payment would be an additional amount of up to Five Hundred Thousand Dollars ($500,000), for a total of One Million Dollars ($1,000,000) annually. The Bonus Payments are not restricted and may be used in accordance with applicable City laws. The Bonus Payments are bonuses to the City as Lessor under the Lease, are designed to be an additional benefit to the City pursuant to this Development Agreement, and shall not be considered royalties or otherwise subject to the allocation formula under Exhibit B of the Lease. SECTION 12.E OF THE BALLOT ORDINANCE See attached comparison of E&B language received today (shown in red inside the text box) as compared with the language in the agenda packet. October 28, 2014 To: Honorable Hermosa Beach City Council City Manager Tom Bakaly City Attorney RE: October 28, 2014 City Council Meeting / Proposed Oil Project I took time this week to review the proceedings from the prior October 14th council meeting. The council’s consensus on the ballot language was a good step forward. Not to dismiss the efforts of our Development Agreement sub-committee and team, I feel that there are still many items in the Development Agreement that have nuanced, legal language, that serve E&B well at the city’s expense. However, I do appreciate the revisions that you have been able to make. I do not like the language pertaining to the significant unavoidable impacts as noted in the FEIR. I reviewed, in particular, the City Council and the Applicant’s comments on the two items that have been brought back and voted on to REMOVE from the D.A. on at least three (3) separate occasions by the majority of the Council. They are: 1) The Undergrounding of Utilities Proposal (Matching Funds): Mayor Tucker stated, “this is not feasible and would generate a tremendous amount of controversy-perhaps even more than the oil issue itself”. Would pit neighbor against neighbor. He noted all the complications involved, including assessment districts, Edison decisions/determinations-they may not even want this done, very costly for residents per home (estimated at $30,000-40,000 eight to ten years ago), very labor intensive for the city, and the considerable amount of money that the city lost in the past from this type of project….” OCTOBER 14, 2014: Voted against by majority of City Council for third time 2) E&B’s School Funding Proposal (announcement of intent in their press release): While I appreciate Councilmember DiVirgilio’s desire to find a way to appease E&B on this issue, the fact remains that the School District is a separate entity, with their own independently elected board. The HBEF, also has its own board, rules and processes. Looking at the past, MacPherson had a deal that they negotiated directly with the school district. Mr. Finch, of E&B, said that their reason now for including this in D.A. was to “hold them accountable” and so that this was “codified in a document so that it wasn’t some verbal promise from E&B”. The majority of our City Council has decided now, three times at least, that the city should not insert this “verbal promise to independent third party organizations” in the D.A. Way too much about this is “fuzzy”: they will try to give to school district first, and if school district doesn’t take it, then maybe to the HBEF, then who knows. Another red flag: this is a creative way to go around state funding laws regarding the schools. HBCSD is a ‘revenue limited district’ – and this is E&B’s solution to get around those rules. Mr. Finch said, “So what do you do. You try to donate to a third party”. Here are two ideas: 1) Mayor Tucker suggested that E&B send a letter of intent to the school district or HBEF. Up to them to figure it out. 2) E&B has the option to donate money to the school district and HBEF events whenever they chose to. Finally, I read through most of the attachments from Ms. Carlsen regarding other Development Agreements. These are comparing apples to oranges. These other agreements are mainly building projects (eg: housing, hotels, etc.) not oil exploration, drilling and processing projects. There are some government laws- approved formulas, etc. -that mandate percentages towards things like affordable housing, day care, public art, etc. But I didn’t find anything that was similar to this situation. If you want closure on this, as has been said, you need to “agree to disagree” on these items and move on. They didn’t agree to our big ask, and the negotiating team moved on. Sincerely, Lauren Lauren Pizer Mains Hermosa Beach Comparison of Public Benefit List in Ordinance Section 12.E (City’s proposed in black, E&B’s proposal in red text box) 1. E & B will pay the entire cost of soils remediation at the maintenance yard should the oil ban be lifted and the Project move forward to Phase 3 – full production. If the ban is lifted and the Project does not go forward past Phase 2, E & B will clean up the site to be used for industrial and commercial purposes; 2. If the oil ban is lifted and E&B decides to proceed with Phase 3 of the Project, E&B will advance $6,500,000 to the City for the permanent relocation of the City Maintenance Yard. E & B has further agreed to forgive the City’s $3.5 million obligation if the Project does not go to Phase 3. These funds could be used for projects at the discretion of the City such as a temporary or permanent relocation of the City Maintenance Yard; 3. E&B will pay royalties to the City, as set forth in Section 3 of the Lease. E&B and the City’s independent consultant through its Cost Benefit Analysis prepared separate royalty payment estimates for the project; 5. Relocation of City Maintenance Yard Upon the issuance by the City of the drilling permit for the first well, the City shall not be required to repay $3,500,000, plus interest, to E&B as required in the Lease. E&B will also advance $6,500,000 to the City for the permanent relocation of the City Maintenance Yard if the Project proceeds to Phase 3, full production. These funds could be used for projects at the discretion of the City, including a temporary or permanent relocation of the City Maintenance Yard. 4. Remediation of City Maintenance Yard E & B will pay for and implement the Remedial Action Plan for the Project to remediate soil contamination at the City Maintenance Yard if the Project proceeds to Phase 3, full production. If the Project does not proceed to Phase 3, E & B will conduct remediation activities at the City Maintenance Yard to allow the site to be used for industrial and commercial purposes. 1. Gross Revenues to the City The Project is estimated to provide gross revenues to the City, ranging from One Hundred Forty Six Million Seven Hundred Thousand Dollars ($146,700,000) to Four Hundred Seventy Nine Million Two Hundred Thousand Dollars ($479,200,000), as depicted in Figure 1 of the City’s Cost Benefit Analysis. 4. In addition to the minimum royalty payments required under the Lease, E & B has agreed to provide an additional unrestricted contribution to the City in the amount of $500,000; 5. E&B will pay to the City, as an advance, One Million Dollars ($1,000,000) per year, starting on the date of the issuance by the City of the drilling permit for the first well and continuing on the anniversary of that date until the Minimum Royalty payment in the Lease commences (“Drilling Permit Advance” or collectively, “Drilling Permit Advances”). (For clarity, this period is estimated to continue for approximately five years, for a total of Five Million Dollars ($5,000,000).) The Drilling Permit Advances are not restricted and may be used in accordance with applicable City laws; 6. E & B will create and fund an account that would stabilize proven impacts to property values for 5 years (during drilling) for properties in close proximity to the Project. The program will be available to properties within 600 feet of the Project and the fund will have a minimum balance of $1 Million, with 3. Bonus Payments to Minimum Royalty During Years 4-13 of the Lease to Ensure $1,000,000 to City In addition to the $500,000 Minimum Royalty in the Lease during years 4-13, E&B shall pay an additional bonus equal to the difference between the Minimum Royalty and $1,000,000 to ensure that City receives at least $1,000,000 during those years. 2. Accelerated Unrestricted Royalty Payments of $1,000,000 Annually Commencing with Issuance of City Drilling Permit for First Well With the issuance of the City’s drilling permit for the first well (one of the three test wells), E&B shall pay to the City an accelerated unrestricted royalty payment of $1,000,000 annually as an advance on future unrestricted royalties until the Minimum Royalty of $500,000 commences (estimated to continue for five years for a total of $5,000,000). The City is not required to repay these accelerated royalty payments if the unrestricted royalties are not sufficient to cover these payments. payments on claims capped at $25 Million. E&B will place another $4 million in the fund over time. Any funds left over in the fund will be distributed to properties within 300 feet of the project; 7. The City will receive additional property tax revenue levied on the value of the oil reservoir, as identified in the Cost Benefit Analysis; and 8. Pursuant to the terms of the Settlement Agreement, the City will be relieved of its obligation to pay E&B $17.5 Million. 9. The City will receive additional property tax revenue levied on the value of the oil reservoir, as identified in the Cost Benefit Analysis; and 7.The City will receive additional property tax revenue levied on the value of the oil reservoir, as identified in the Cost Benefit Analysis; and 8. Pursuant to the terms of the Settlement Agreement, the City will be relieved of its obligation to pay E&B $17.5 Million 6. Hermosa Beach Residential Property Fund E & B will establish an independent Fund to provide assurance to residential property owners within 600 feet of the Project site that they will incur no loss, as a result of the Project, to their property’s fair market value in the event of a sale of the property. The Fund will pay the difference between an eligible property’s actual negotiated sale price and the appraised market value of the property as if the Project had not been built. There is no cost to the property owners to receive the benefits of the Fund. The Fund will commence upon issuance by the City of the drilling permit for the first well, and will continue for at least six years or one year after completion of the final well (whichever is later), or until the Fund has been fully disbursed to participants. Residential property owners within 600 feet of the Project are eligible to participate, with a $25,000,000 cap on the total amount of benefits to be paid out. The Fund will have a minimum balance of $1,000,000, with additional funding of a maximum of $4,000,000 based on 1.5% of gross project revenues. At the expiration of the Fund term, the remaining balance, of at least $1,000,000 up to a maximum of $5,000,000, will be distributed to the residential property owners within 300 feet of the Project site 7. Additional Property Tax The City will receive additional property tax revenue levied on the value of the oil reservoir, as identified in the Cost Benefit Analysis 8. City’s Obligation to Pay $14 Million Forgiven Pursuant to the terms of the Settlement Agreement, the City will be relieved of its obligation to pay E&B $14,000,000. 1 October 27th, 2014 City Council City Hall – 1315 Valley Drive Hermosa Beach, CA 90254 Dear Honorable Mayor and Members of the Hermosa Beach City Council: I’m shocked after reading several of the proposed updates to the Ballot Ordinance as described in the Staff Report dated October 23, 2014. Two of the proposed updates present oil spill frequency that is inconsistent with the Final EIR and the proposed Statement of Overriding Considerations is factually incorrect. Below is a short description of the issues associated with the proposed updates: 1. Section 12D was proposed to be updated in the following manner: However, no justification is provided for this update and the data above is inconsistent with the oil spill frequency analysis on page 4.8-89 of the Final EIR (both items (i) and (ii)). Additionally, in a follow up letter provided by MRS on October 8th, 2014 in response to the iterative pipeline design proposals supplied by E&B, MRS closes the letter by stating “... the preliminary analysis presented here remains speculative and does not constitute substantial evidence to support a CEQA-based finding that the concept would reduce the risk of a spill over the life of the Project.” Please ensure that the data in the Ballot Ordinance on environmental impacts is consistent with the Final EIR. Besides that point, please explain in detail how the two offending figures above were arrived at. 2. Section 12E was proposed to be updated in the following manner: The added language to the statement of overriding considerations is very troubling and should be removed. First, the statement “the much needed influx of revenue to the City “ makes an emotional plea on behalf of the oil company. Second the statement “outweighs the remote risks of environmental impacts identified in the EIR” is not factual and conflicts with the Final EIR. Many of the significant unavoidable environmental impacts cited in the FEIR are undeniably certain to occur and therefore cannot be classified as “remote”. For instance the significant unavoidable impacts to aesthetics are guaranteed to occur if the 2 87 foot drilling rig is erected. Likewise unavoidable environmental impacts due to incompatible Land Use will occur if the project is started, as will unavoidable impacts due to Noise during construction activities. The city should not propose a misleading and factually incorrect Statement of Overriding Considerations. Please correct these issues with the recently proposed language in the Ballot Ordinance. Sincerely, Scott Hebl 1 October 28th, 2014 City Council City Hall – 1315 Valley Drive Hermosa Beach, CA 90254 Dear Honorable Mayor and Members of the Hermosa Beach City Council: I’m writing to express my concern with the language of the ballot question for the oil and gas production project. Specifically, I am very concerned with the omission of the extent of environmental impacts from the ballot question. At the October 14th, 2014 meeting city council tentatively decided to remove the number of unavoidable environmental impacts (9) from the ballot question, and thus potentially not disclose to the decision makers the full extent of environmental impacts resulting from the project. This is a serious violation of the intent and guidelines of the California Environmental Quality Act (CEQA). As stated in 14 California Code of Regulations § 15002, the CEQA process is primarily designed to identify and disclose to decision makers and the public the significant environmental impacts of a proposed project prior to its consideration and approval. Typically this is achieved through the EIR process, in which the deciding body reviews and potentially certifies the Final Environmental Impact Report and through this is intimately aware of the associated environmental impacts. The Hermosa Beach oil and gas production project is unorthodox in that sense, in that there is no certainty that the electorate, i.e the decision makers, are aware of the full extent of environmental impacts. Participation by the electorate in the project proceedings is voluntary and requires a significant investment of time and effort. There is no procedural guarantee that the decision makers have read the 1,133 page EIR or studied the supplemental materials that may accompany the ballot measure. Disclosing the full extent of the significant environmental impacts associated with the project in the ballot question is necessary to ensure that every decision maker is made aware of the significant environmental impacts prior to voting on the project. I cannot think of another procedural method in which the city can guarantee that the decision makers are informed about the extent of significant environmental impacts prior to voting, as mandated by CEQA. Ensuring that the electorate is made aware of the full extent of environmental impact is easily accomplished by rewording clause 4 to read “determining that project financial benefits outweigh its nine unavoidable environmental impacts”. This involves adding one word to the ballot question and ensures that the city abides by its CEQA requirements. This will result in a ballot question that is fair, impartial, and meets the intent of the CEQA statutes. Many thanks for your contributions to the City and selfless contribution to public service that helps make Hermosa Beach a better place. Sincerely, Scott Hebl 1 10/28/2014 To: The City of Hermosa Beach Honorable Mayor and City Council From: Tom Morley RE: Proposed Oil Project problems with Process of Approval, Suggested Remedy. I know this will not make everyone happy but my solution complies with the Settlement Agreement section 4.6 which states in the first 20 words that; “Place on the ballot at a special municipal election in a manner that comports with all applicable law…” The City must not leave themselves open for lawsuits from either losing side which are possible if the existing process, as Mr. Jenkins has devised, is implemented. We need to avoid any chance that the March ballot decision is thrown out and that the issue will therefore require a re-vote. The City has the opportunity to avoid future lawsuits in opposition to the anticipated multi-subject ‘take it or leave it’ Oil Project Ballot measure. I am suggesting a legal alternative which simplifies the March 3, 2015 ballot content to include only a vote on an exception to the Citywide drilling prohibition exclusively for the City Yard site and possibly a change to the oil funds spending restrictions. These items must be voted on separately because they were both enacted by a vote of the people. If the ban is not lifted then the issue can return, after a 1 year wait period, until the voters lift the ban. The removal of the oil ban for the proposed oil site will free the hands of the governmental body to properly comply with State law in formulating a future ballot measure seeking the citizen approval of the remainder of the items required by Settlement Agreement section 4.6a. This complies with the Settlement Agreement section 5.3 which requires a court order to limit City liability to $17.5 million if it is inhibited from comporting with all laws in its performance to section 4.6a. The required court order exists as the CA App Ct opinion supporting Measure E in 2001. Section X compels the City to remove Measure E first as it is an obstacle to implementing section 4.6a. “Each party shall perform any further acts and execute and deliver any further documents that may be reasonably necessary or appropriate to carry out the provisions and intent of this Agreement.” 2 This objection to the contemplated ballot language process is being submitted for the administrative record, and to offer a solution to remedy the problem. The City has not complied with HBMC, public hearings and notification, public participation and Planning Commission participation in compliance with the Municipal Code and State Law for consideration of the old CUP, the Zoning changes (avoiding 'spot zoning'), the General plan changes, the Pipeline Franchise, the proposed ballot measure to remove oil funds spending restrictions, the Oil Code, the Development Agreement, the CEQA selection of alternatives and the evaluation of each FEIR identified remaining significant impact and each specific benefit for each impact, and the specific public evaluation of the weighing of each impact against each benefit and finally the last act of the CEQA process the approval of , or the rejection of, a Statement of Overriding Consideration for the project. Only 'elected body' of the City shall perform the several consecutive acts which make this Development Agreement a legal document. The Development Agreement was intended by the State Legislature to be the last step in the project approval process, not the first step. The DA should only follow the other entire panoply local agency and outside agency approvals, be those ministerial or discretionary. The City Councils vote to place a DA on the ballot is an 'approval' because the City confirms the required ‘equitable interest in property’ and because the action sets the City on a definite course of action without the ability to reconsider. This approval can only occur with the prerequisite of first completing CEQA (SOC); per Citizens for Responsible Government v. City of Albany. The City cannot complete CEQA without first removing the obstacle of the 1995 Citizens Initiative Measure E reestablishing the 1932 citizens’ initiative declaration that oil drilling is a prohibited public nuisance citywide. The City must avoid the 1932 Ord. 506 specified misdemeanor penalties for each day a breach of the prohibition is 'aided' by any party. The City must protect elected officials from performing any actions which may be aiding or abetting of oil drilling and must protect their immunity from their legislative acts. Discretionary acts prior to the lifting of the Oil prohibition may be considered unprotected illegal acts. 3 Per my research of State Law, the HBMC, the Settlement Agreement, and case law, I ask the City Council to remedy the problem noted above by performing the proper sequence of events as follows; 1. Ask Voters to modify the Oil prohibition on March 3, 2015. 2. Thereafter, comply with the Municipal Code and State Law for consideration of the old CUP, the Zoning changes (avoiding 'spot zoning'), the General plan changes, the Pipeline Franchise, the proposed ballot measure to remove oil funds spending restrictions, the Oil Code and more. 2. Complete the CEQA process by the body who certified the FEIR (the Council) approving the Statement of Overriding Considerations as a prerequisite for negotiating the Development Agreement. 3. Determine the validity of the ‘equitable interest in property’ and provide approval of the Development Agreement by the governmental body that negotiated it, per State Law. The DA approval may include the condition that it only become effective upon approved by a vote of the people, per Settlement Agreement section 4.6a, and the Coastal Commission while delaying implementation until after the statute of limitations for accommodation of the citizens constitution right to referendum (per State Gov. Code 65687.5). Best Regards, Tom Morley end FISCAL HEALTH SCENARIOS STUDY SESSION OCTOBER 28, 2014 Scenario 1. The model is used to generate various scenarios, building upon the 2014-15 Budget. Scenario 1 depicts the revenue and expense assumptions outlined in the budget with the exception that the Fiscal Health Model sorts ongoing from one time revenue and expenses and includes only ongoing in the model. SCENARIO 1 SCENARIO 2 Scenario 2. Adding in an annual cost of $1,590,000 for Capital Improvement Financing totaling $20 million (roughly equaling 12% of the city’s capital needs) and an annual cost of $800,000 for Oil Debt Service Payments to the baseline assumptions results in projected ongoing expenses exceeding ongoing revenue in 2016. The dip in expenses beginning in 2018-19 results from the payoff of Police and Fire CalPERS side funds. Scenario 3. Adding in the assumption that salaries will increase by 3% per year to the above assumptions results in Scenario 3 above which reflects expenses exceeding revenue. SCENARIO 3 Scenario 4. Adding in an additional $5 million in Capital Improvement Financing ($397,500 annual cost) to increase coverage to roughly 15% of the city’s capital needs results in expenditures exceeding revenue by a widening margin. SCENARIO 4 SCENARIO 5 Scenario 5. Adding in a sewer fee to help offset approximately $6.3 million in Capital Improvement financing (or $500,000 of the annual Capital Improvement debt service costs) to the above assumptions results in Scenario 5, which narrows but does not close the gap between revenue and expenditures. SCENARIO 6 Scenario 6. Adding in a 2% increase to the Transient Occupancy Tax (rate from 10% to 12%) would generate another $430,864 in ongoing revenue. This would help offset approximately $5.4 million in Capital Improvement Financing and continues to narrow, but does not close the gap between revenue and expenditures. SCENARIO 7 Scenario 7. Adding in a $100 parcel tax would generate another $688,700 in ongoing revenue. This would help offset another $8.7 million in Capital Improvement Financing and closes the gap between ongoing revenue and expenditures. Conclusion These scenarios show that, while ongoing revenue exceeds ongoing expenses now, it will not be possible to fund identified capital needs and rising personnel costs associated with 1st class services into the future without significant adjustments to revenue, expenditures, and service levels. FISCAL HEALTH SCENARIOS STUDY SESSION OCTOBER 28, 2014 Scenario 1. The model is used to generate various scenarios, building upon the 2014-15 Budget. Scenario 1 depicts the revenue and expense assumptions outlined in the budget with the exception that the Fiscal Health Model sorts ongoing from one time revenue and expenses and includes only ongoing in the model. SCENARIO 1 SCENARIO 2 Scenario 2. Adding in an annual cost of $1,590,000 for Capital Improvement Financing totaling $20 million (roughly equaling 12% of the city’s capital needs) and an annual cost of $800,000 for Oil Debt Service Payments to the baseline assumptions results in projected ongoing expenses exceeding ongoing revenue in 2016. The dip in expenses beginning in 2018-19 results from the payoff of Police and Fire CalPERS side funds. Scenario 3. Adding in the assumption that salaries will increase by 3% per year to the above assumptions results in Scenario 3 above which reflects expenses exceeding revenue. SCENARIO 3 Scenario 4. Adding in an additional $5 million in Capital Improvement Financing ($397,500 annual cost) to increase coverage to roughly 15% of the city’s capital needs results in expenditures exceeding revenue by a widening margin. SCENARIO 4 SCENARIO 5 Scenario 5. Adding in a sewer fee to help offset approximately $6.3 million in Capital Improvement financing (or $500,000 of the annual Capital Improvement debt service costs) to the above assumptions results in Scenario 5, which narrows but does not close the gap between revenue and expenditures. SCENARIO 6 Scenario 6. Adding in a 2% increase to the Transient Occupancy Tax (rate from 10% to 12%) would generate another $430,864 in ongoing revenue. This would help offset approximately $5.4 million in Capital Improvement Financing and continues to narrow, but does not close the gap between revenue and expenditures. SCENARIO 7 Scenario 7. Adding in a $100 parcel tax would generate another $688,700 in ongoing revenue. This would help offset another $8.7 million in Capital Improvement Financing and closes the gap between ongoing revenue and expenditures. Conclusion These scenarios show that, while ongoing revenue exceeds ongoing expenses now, it will not be possible to fund identified capital needs and rising personnel costs associated with 1st class services into the future without significant adjustments to revenue, expenditures, and service levels. City of Hermosa Beach, California Kathie Novak, Jon Johnson & Chris Fabian October 28, 2014 10 Orientation to FISCAL HEALTH and WELLNESS through PRIORITY BASED BUDGETING and VALIDATION of RESULTS 11 Achieving Fiscal Health & Wellness 2 Strategic Initiatives 12 Fiscal Health Long-term Fiscal Wellness 13 BRINGING VISION INTO FOCUS WITH A NEW “LENS” 14 Who is Looking through the “New Lens” 15 The Financials …. From an Elected Officials Perspective 16 17 18 19 GOVERNING "Failure to understand financial outcomes is more dangerous to states and localities than ever, and there’s a big gap between what public leaders know about finance and what they need to know.” 20 http://www.governing.com/finance101/gov-financial-illiteracy-feature.html 21 ACHIEVING FISCAL HEALTH Fiscal Health “Spend Within Our Means Establish and Maintain Reserves Understand Variances (Budget vs. Actual) Transparent About the “True Cost of Doing Business” Incorporate Economic Analysis and Long-Term Planning into Decision Making 22 Aligning Resources with Priorities through PRIORITY BASED BUDGETING 23 Priority Based Budgeting Steps 1. DETERMINE RESULTS – What are we in “business” to do? Accurate prioritization of programs, reflecting the organization’s stated objectives, depends on the comprehensive identification of the Results it is in business to achieve 24 Priority Based Budgeting Steps 2. CLARIFY RESULTS DEFINITIONS – What do we mean? Precision in prioritization depends on the articulation of the cause and effect relationship between a program and a Result Using clearly defined “Result Maps”, detailing the factors that influence the way Results are achieved, the organization can minimize subjectivity in the process of linking programs with its Results 25 City of Wheat Ridge, Colorado SAFE COMMUNITY Offers and supports a variety of safe activities and facilities that provide for the physical health and social well-being of the community Fosters a feeling of personal safety throughout the community by establishing a visible, accessible presence that proactively provides for prevention, intervention, safety education, and community involvement Offers protection, enforces the law and is well-prepared to promptly and effectively respond to emergencies and calls for service Creates a secure, well-regulated, well-maintained community that is healthy, clean, well-lit and visually attractive Provides for a safe transportation network that is well-maintained, accessible, enhances traffic flow and offers safe mobility to motorists, cyclists and pedestrians alike Provides for the protection and sustainability of the environment through regulatory compliance, planning and effective stormwater management 26 Town of Christiansburg, Virginia GOOD GOVERNANCE (Sound Financial Entity) Provides assurance of regulatory and policy compliance to minimize and mitigate risk Protects and prudently manages its financial, human, physical and technology resources Enables and enhances transparency, accountability, integrity, efficiency and innovation in all operations Responsive, accessible and courteous to its customers Supports decision- making with timely and accurate short-term and long-range analysis Attracts, motivates and develops a high-quality workforce, dedicated to public service 27 Priority Based Budgeting Steps 3. IDENTIFY PROGRAMS and SERVICES – What exactly do we do? Comparing individual programs and services as opposed to comparing departments that provide those services allows for better prioritization 28 Priority Based Budgeting Steps 4. VALUE PROGRAMS BASED ON RESULTS – What is of the highest importance? With the right Results that are clearly defined, the organization can more accurately “value” a program relative to its influence on achieving Results 29 Score Programs against Results & Attributes City of Boulder’s Results Basic Program Attributes Accessible & Connected Community Economically Vital Community Healthy Environment & Community Inclusive & Socially Thriving Community Safe Community Mandated to Provide the Program Reliance on the City to Provide the Program Cost Recovery of the Program Change in Demand for the Program Portion of the Community Served by the Program And/or any other criteria that is relevant to your community 30 Priority Based Budgeting Steps 5. ALLOCATE RESOURCES BASED ON COMMUNITY PRIORITIES – What can we see “differently? Through the “new lens” of the “Resource Alignment Diagnostic Tool”, the organization can ask “different” questions that lead to more informed, data-driven decisions about “what we do” and “why we do it”. 31 “Resource Alignment Diagnostic Tool” City of Boulder, CO Quartile Ranking Programs in Array Qrt 1 88 Qrt 2 116 Qrt 3 1102-10% Qrt 4 54 TOTALS 368 October 30, 2012 Community-Oriented Programs All Departments Funding Source: (Est. Budget, Gen Gov Revenue, Program Revenues) Total Estimated BudgetCity-wide Prioritization Perspective: (City-wide, Fund, Funds) Choose Department: (All Departments, Specific) Program Type: (All Programs, Governance, Community-oriented) $00.00% 0.00% $0 $0 $85,915,772 $21,505,297 $51,726,155 0.00% $0 $0 $0 $85,915,772 $51,726,155 0.00% $0 $166,646,067 0.00%$0 $166,646,067 2012-13 Proposed Budget Increase (Reduce) %Impact 2012-13 Target Budget $0 $0 2011 Budget $7,498,842 $21,505,297 $7,498,842 $85,915,772 $51,726,155 $21,505,297 $7,498,842 $- $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 $70,000,000 $80,000,000 $90,000,000 $100,000,000 1 2 3 4Quartile Ranking(Quartile 1: Highest Rated Programs;Quartile 4: Lowest Rated Programs) Priority Based Budgeting: Spending Array Perspectives 32 “Looking Through the “New Lens” •Which programs are of the highest priority in terms of achieving what is expected by the community? o And which are of lesser importance? •Which programs are truly mandated for us to provide o And how much does it cost to provide them? •Which programs are offered because they are “self- imposed” ? •Which programs are offered for which there are no other service providers? •Are there programs might lend themselves to public/private partnerships? 33 “Looking Through the “New Lens” •Who in the private sector is offering programs that are similar in nature? o And should we consider” getting out of that business”? •Which programs are experiencing an increasing level of demand from the community? o And which are experiencing a decreasing need? •Are there programs offered that are not helping us achieve our intended “Results”? •What are we spending to achieve our “Results”? 34 35 36 What are “Results” •High-level and over-arching reasons the organization exists in the eyes of the community •Identifies the “Role of Local Government” in your Community •Remain consistent and unchanged over time •Comprehensive •Distinguished from (i.e. “Results” are not…) o Vision or Mission Statements o Specific short-term, projects, goals or initiatives o Organizational Values •How we want to achieve our results o “Marketing” statements •Look and feel of the community City of Hermosa Beach’s Foundation for “Results” •2019 Goals •Strategic Plan Objectives •Action Goals •Vision 2029 •Mission and Core Services 37 Leveraging Hermosa Beach’s Work Toward PBB “Results” 38 39 Proposed “COMMUNUTY” Results for The CITY of HERMOSA BEACH, CALIFORNIA •ACCESS to CULTURE EDUCATION, RECREATION, and LEISURE OPPORTUNITIES •an ATTRACTIVE, INVITING HOMETOWN COMMUNITY •COMMITMENT to a SAFE COMMUNITY •ECONOMIC VITALITY and GROWTH •a HEALTHY, SUSTAINABLE ENVIRONMENT •MANAGED, WELL-PLANNED DEVELOPMENT •RELIABLE INFRASTRUCTURE and EFFECTIVE MOBILITY 40 Thank You ! www.pbbcenter.org Phone: 720-361-3710 Jon Johnson, Co-Founder jjohnson@pbbcenter.org Chris Fabian, Co-Founder cfabian@pbbcenter.org Kathie Novak The.kathie.novak@gmail.com Copyright ©2009 by Chris Fabian and Jon Johnson d/b/a the Center for Priority Based Budgeting, Denver, Colorado. STRATEGIC PLAN - 2019 GOALS (p. 17) COMMITMENT to a SAFE COMMUNITY HIGH PERFORMING CITY PROVIDING 1ST CLASS SERVICES FINANCIALLY SOUND CITY GOVERNMENT by ensuring…by ensuring…by ensuring… PBB RESULTS ECONOMIC VITALITY and GROWTH MANAGED, WELL- PLANNED DEVELOPMENT an ATTRACTIVE, INVITING HOMETOWN COMMUNITY a HEALTHY, SUSTAINABLE ENVIRONMENT ACCESS to CULTURE EDUCATION, RECREATION, and LEISURE Economic Development & Business Investment Develop Cypress Area Timely Response to Emergency Calls for Service Calmer, Safer Downtown Calmer, Safer Downtown Carbon Neutrality Calmer, safer Downtown Upgrade streets, sidewalks, sewer collection systems Invest in City Infrastructure Quality Businesses Attractive Pacific Coast Highway & Aviation Corridors Low Crime Rate Support Schools Leverage environmental Initiatives (FINANCIALLY SOUND CITY GOVERNMENT Support Schools Upgrade City Facilities Attract New Business Development of Vacant & Underutilized Properties Enforcement - balance with community interest Preserve Small Town & Neighborhood Character Upgrade Recreation Facilities & Activities Improved Mobility - all forms of transportation (MORE LIVABLE, SUSTAINABLE BEACH CITY) Increase Downtown Day- time foot traffic Flexible Parking Feel Safe -in partnership with community Clean City Attractive Pacific Coast Highway & Aviation Corridors (ECONOMIC DEV) BEST LITTLE BEACH CITY: Hotels and Retail for Visitors BEST LITTLE BEACH CITY -Diverse Housing Options; Small Compact City: Preservation BEST LITTLE BEACH CITY: Preservation: Feel Welcome BEST LITTLE BEACH CITY: Pacific Ocean and Beach as Focal Point; Preservation BEST LITTLE BEACH CITY -Relaxed Life Styles; Enjoy Life and Excel HOMETOWN SPIRIT: Locally Owned Business and Commercial Areas HOMETOWN SPIRIT: Residents Feel Safe HOMETOWN SPIRIT: All Feel at Home; Engaged Community; Know and Help Neighbors; Great Place for Families HOMETOWN SPIRIT: Top Quality Schools CITY of HERMOSA BEACH, CALIFORNIA PROPOSED COMMUNITY RESULTS ENHANCED ECONOMIC DEVELOPMENT through REVITALIZED DOWNTOWN and ENTRY CORRIDORS The CITY of HERMOSA BEACH MEETS the EXPECTATIONS of the COMMUNITY by ACHIEVING THESE GOALS STRATEGIC PLAN 2014 -2019 OBJECTIVES (p. 18 - 30) VISION 2029 - (p. 5) with Means (p. 6 - 8) RELIABLE INFRASTRUCTURE and EFFECTIVE MOBILITY MORE LIVABLE, SUSTAINABLE BEACH CITY… by ensuring… COMMITMENT to a SAFE COMMUNITY by ensuring… STRATEGIC PLAN - 2019 GOALS (p. 17) COMMITMENT to a SAFE COMMUNITY HIGH PERFORMING CITY PROVIDING 1ST CLASS SERVICES FINANCIALLY SOUND CITY GOVERNMENT by ensuring…by ensuring…by ensuring… PBB RESULTS ECONOMIC VITALITY and GROWTH MANAGED, WELL- PLANNED DEVELOPMENT an ATTRACTIVE, INVITING HOMETOWN COMMUNITY a HEALTHY, SUSTAINABLE ENVIRONMENT ACCESS to CULTURE EDUCATION, RECREATION, and LEISURE CITY of HERMOSA BEACH, CALIFORNIA PROPOSED COMMUNITY RESULTS ENHANCED ECONOMIC DEVELOPMENT through REVITALIZED DOWNTOWN and ENTRY CORRIDORS The CITY of HERMOSA BEACH MEETS the EXPECTATIONS of the COMMUNITY by ACHIEVING THESE GOALS STRATEGIC PLAN 2014 -2019 OBJECTIVES (p. 18 - 30) RELIABLE INFRASTRUCTURE and EFFECTIVE MOBILITY MORE LIVABLE, SUSTAINABLE BEACH CITY… by ensuring… COMMITMENT to a SAFE COMMUNITY by ensuring… BEACH LIFE STYLE: Strong Community Events and Festivals BEACH LIFE STYLE: Casual Life Style. Clean Beach; Beach Access; Meet People and Socialize BEACH LIFE STYLE: Value the Beach; Healthy Living; Clean Beach and Ocean BEACH LIFE STYLE: Casual Life Style; Outdoor, Healthy Living and Activities; Strong Community Events and Festivals: Beach Access; The Strand; Socialize ECLECTIC DOWNTOWN: Unique, Locally Owned Shops, Dining and Entertainment Venues Increased Day Time Population; Civic Complex and Pier Plaza ECLECTIC DOWNTOWN: Community Focal Point; Well-Maintained and Attractive Public Spaces ECLECTIC DOWNTOWN: Artistic Public Spaces ECLECTIC DOWNTOWN: Pedestrian Friendly & Walkable VIBRANT ENTRY CORRIDORS: Commercial Centers and Viable Businesses; Expanded Commercial Tax Base; Office Spaces; Positive Business Investment VIBRANT ENTRY CORRIDORS: Well- Designed Commercial Areas VIBRANT ENTRY CORRIDORS: Attractive, Well-Maintained Entrances, Streetscapes and Medians LEADERSHIP in ENVIRONMENTAL SUSTAINABILITY; Stewardship of Natural Resources, Alternative Energy; Reduced Dependence on Automobiles, Water Conservation & Reuse; Carbon Neutrality LEADERSHIP in ENVIRONMENTAL SUSTAINABILITY; Reduced Dependence on Automobiles, Connected Bike Lanes and Sidewalks MISSION and CORE SERVICES (p. 10) BE ENVIRONMENTALLY RESPONSIBLE VISION 2029 - (p. 5) with Means (p. 6 - 8) STRATEGIC PLAN - 2019 GOALS (p. 17) SUPPORTS DECISION- MAKING with TIMELY and ACCURATE SHORT- TERM and LONG- RANGE ANALYSIS that ENHANCES FINANCIAL SUSTAINABILITY PROVIDES ASSURANCE of REGULATORY and POLICY COMPLIANCE to MINIMIZE and MITIGATE RISK FOSTERS SOUND FISCAL RESPONSIBILITY, OPERATIONAL EXCELLENCE, TRUST and TRANSPARENCY by ENSURING ACCOUNTABILITY, EFFICIENCY, INNOVATION and BEST PRACTICES PROVIDES RESPONSIVE LEADERSHIP, FACILITATES TIMELY and EFFECTIVE TWO- WAY COMMUNICATION and UTILIZES INPUT from all STAKEHOLDERS ATTRACTS, DEVELOPS, RETAINS and VALUES a QUALITY WORKFORCE DEDICATED to SERVICE EXCELLENCE Long-term Financial Sustainability Adequate Resources Upgrade City Facilities Higher Customer Satisfaction Top Quality Workforce, Dedicated to Serve Financial Reserves Invest in City Infrastructure Engaging Community Stakeholders Competitive Compensation Leverage Resources Partnerships BE FINANCIALLY RESPONSIBLE PROVIDE 1ST CLASS MUNICIPAL SERVICES GOVERN the COMMUNITY VALUED EMPLOYEES and VOLUNTEERS CUSTOMER FRIENDLY MANNER CITY of HERMOSA BEACH, CALIFORNIA PROPOSED GOVERNANCE RESULTS The CITY of HERMOSA BEACH MEETS the EXPECTATIONS of the INTERNAL ORGANIZATION by ACHIEVING THESE GOALS HIGH PERFORMING CITY PROVIDING 1ST CLASS SERVICES GOOD GOVERNANCE FINANCIALLY SOUND CITY GOVERNMENT PBB RESULTS PROTECTS, MANAGES, LEVERAGES and INVESTS in its FINANCIAL, HUMAN, PHYSICAL and TECHNOLOGY RESOURCES MISSION and CORE SERVICES (p. 10) by ensuring…by ensuring… STRATEGIC PLAN 2014 -2019 OBJECTIVES (p. 18 - 30) LEGAL02/35096196v7 EXHIBIT “C” PUBLIC BENEFITS OF PROJECT With the approval of the Project by the voters of the City, the public benefits of the Project provided by the Lease include: a) the gross revenues to the City, estimated to range from One Hundred Forty Six Million Seven Hundred Thousand Dollars ($146,700,000) to Four Hundred Seventy Nine Million Two Hundred Thousand Dollars ($479,200,000), as depicted in Figure 1 of the City’s Cost Benefit Analysis; and b) the minimum annual royalty of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled as further described in the Lease (“Minimum Royalty”). In addition, and as consideration for the benefits provided to E&B through the approval of this Agreement by the voters of the City, E&B has agreed to provide the additional public benefits as follows: 1) Accelerated Unrestricted Royalty Payments Commencing with Issuance of City Drilling Permit for First Well: E&B shall pay to the City a non- refundable accelerated royalty payment of One Million Dollars ($1,000,000) as an advance against future unrestricted royalties, starting on the date of the issuance by the City of the drilling permit for the first well and continuing on the anniversary of that date until the Minimum Royalty payment in the Lease commences (“Accelerated Royalty Payment” or collectively, “Accelerated Royalty Payments”). (For clarity, this period is estimated to continue for approximately five years, for a total of Five Million Dollars ($5,000,000).) The Accelerated Royalty Payments are not restricted and may be used in accordance with applicable City laws. Each $1,000,000 Accelerated Royalty Payment would be adjusted by any unrestricted royalties received by the City in that year to ensure that the City receives a minimum of $1,000,000 each year. The Accelerated Royalty Payments are being advanced only against the unrestricted royalties as described in Paragraph 1 and Paragraph 2(i) of Exhibit B of the Lease. The Accelerated Royalty Payments shall be repaid by the City from these unrestricted royalties, including royalties from tidelands, without interest. Subject to the foregoing conditions, for purposes of repayment, the Accelerated Royalty Payments shall otherwise be subject to the repayment process set forth in Section 13.d(4) of the Lease. If unrestricted royalties are not sufficient to repay the Accelerated Royalty Payments, then the City is not required to repay the Accelerated Royalty Payments. 2) Bonus Payments During Years 4-13 of the Lease To Ensure $1,000,000 Amount: The Lease provides for a “Minimum Royalty” of Five Hundred Thousand Dollars ($500,000) starting on the fourth anniversary of the completion of the first well drilled and continuing to the 13th anniversary 2 LEGAL02/35096196v7 (“Years 4-13”). If all royalties, as specified in Exhibit B to the Lease, paid to the City during Years 4-13 do not exceed One Million Dollars ($1,000,000), E&B shall pay to the City an additional bonus amount equal to the difference between the Minimum Royalty and One Million Dollars ($1,000,000) (“Bonus Payment”). For clarity, given that the Minimum Royalty is Five Hundred Thousand Dollars ($500,000), this Bonus Payment would be an additional amount of up to Five Hundred Thousand Dollars ($500,000), for a total of One Million Dollars ($1,000,000) annually. The Bonus Payments are not restricted and may be used in accordance with applicable City laws. The Bonus Payments are bonuses to the City as Lessor under the Lease, are designed to be an additional benefit to the City pursuant to this Development Agreement, and shall not be considered royalties or otherwise subject to the allocation formula under Exhibit B of the Lease. 3) Remediation of City Maintenance Yard: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of the Project, E&B shall implement the proposed Remedial Action Plan as described in Exhibit B to this Agreement in Phase 3 of the Project; however, if E&B determines as a part of Phase 2 not to proceed with Phase 3 of the Project, then E&B shall conduct any necessary remediation activities at the Project site to allow the site to be used for industrial or commercial purposes (e.g., City maintenance or commercial activities), in a manner consistent with its obligations under the Lease, the Settlement Agreement and this Agreement. E&B shall not be obligated to remediate the property for any other future uses, such as commercial or residential uses. [If voters do not approve ballot measure, this document would not be vehicle for determining clean-up, but in any case, E&B will not remediate site if project is not approved.] 4) Educational Funding: E&B shall pay 1% of gross project revenues (currently estimated to be Thirty Seven Million Dollars ($37,000,000)) to the Hermosa Beach Education Foundation (“Foundation”), and if the Foundation does not accept the donation, to an organization established under Section 501(c)(3) of the Internal Revenue Code for educational purposes to benefit the Hermosa Beach community. If neither the Foundation nor the 501(c)(3) organization is able to accept the donation, these funds shall be provided to the City to be used for any municipal purposes. Upon the issuance by the City of the drilling permit for the first well, E&B shall pay One Million Dollars ($1,000,000) to the Education Foundation (or to the 501(c)(3) organization) as a prepayment on the donation of the 1% of gross project revenues. 5) Relocation of City Maintenance Yard: If the voters approve the Project, the City may determine to relocate the City Maintenance Yard to a temporary location and then to a permanent location or alternatively, to relocate the City Maintenance Yard directly to a permanent location, without a temporary location. With respect to either of these options, E&B agrees as follows: 3 LEGAL02/35096196v7 a. $3.5 Million Forgiven Upon Issuance by City of Drilling Permit for First Well: Upon the issuance by the City of the drilling permit for the first well, the City shall not be required to repay the Three Million Five Hundred Thousand Dollars ($3,500,000), plus interest, to E&B as further described in Section 4.6.b of the Lease. b. $6.5 Million Advance for Permanent Relocation: If E&B determines as a part of Phase 2 of the Project to proceed with Phase 3 of the Project, then E&B shall advance Six Million Five Hundred Thousand Dollars ($6,500,000) to the City for the permanent relocation of the City Maintenance Yard. 6) Matching Funds to Property Owners for Undergrounding Utility Lines in the City: If E&B determines as a part of Phase II of the Project to proceed with Phase III of the Project, E&B agrees to provide up to Thirty Million Dollars $30,000,000 in matching funds (50% of the costs) to property owners for the purpose of undergrounding utility lines in the City. Property owners in the City may utilize the City process to create a district for this purpose or, alternatively, coordinate directly with the utility to achieve the undergrounding of utilities. The costs would be confirmed through the City process or by the utility, and any costs incurred by the City (that would otherwise be reimbursed by the property owner) would be included in the cost amount. These matching funds would be funded through gross revenues from the Project, with an initial amount of One Million Dollars ($1,000,000) to be contributed by E&B at the commencement of the program. If, after five years from the commencement of the program, none of the City’s property owners have utilized this matching fund program or if the program has been used on a limited basis, any remaining funds will be provided to the City for improvements to the street, sewers and other City infrastructure. 7) Industrial and Commercial Property Owners: E&B will invite each of the industrial and commercial property owners in the vicinity of the Project site to discuss the Project and the potential effect that the Project may have on the use of their properties. 8) Hermosa Beach Residential Property Fund: Purpose: To provide owners of residential properties within 600 feet of the Hermosa Beach Oil Recovery Project (Project) with assurance that they will incur no loss, as a result of the Project, to their property’s fair market value (Market Value), in the event of a sale of their property. Such assurance is offered through voluntary participation in a Hermosa Beach Residential Property Fund (Fund). Offer: The Fund will pay the difference between an eligible property's actual negotiated sale price and the appraised Market Value of the property, which will be determined as if the Project had not been built. A predetermined independent appraisal process will demonstrate if there is a loss in the Market Value of an owner's residential property. Participation: Participation in the Fund is entirely voluntary. 4 LEGAL02/35096196v7 Eligibility: Owners of residential properties that are located within the “eligibility area” (within 600 feet of the Project, measured property edge to property edge) are eligible to participate. The claim must be made by the then current owner of the property and only one claim per property will be allowed; however, the owner need not own the property when the Fund commences in order to be eligible for a claim. By way of example only, if the original owner of the property does not make a claim in connection with its sale to a buyer, then so long as the sale occurs during the Fund term, the buyer would automatically succeed to the rights of the selling property owner with respect to the Fund, including the right to make any claim, subject to the other requirements for participation in this Fund. Costs: There is no monetary cost to participating residential property owners to receive the benefits of the Fund, now or in the future. All costs, including the costs of obtaining required appraisals, are paid by the Fund. Cap: There will be a $25,000,000 cap (Funding Cap) on the total amount of benefits that the Fund can pay out. Term: The Fund will commence upon issuance of the City Drilling Permit for First Well by the City of Hermosa Beach and will continue in effect until the first to occur of (a) six years from commencement of the Fund, or one year after the completion of the final Project well, whichever is later, or (b) the entire Funding Cap has been disbursed to eligible residential property owners. The six-year aspect of the Fund term described in subpart (a), above, will be extended consistent with any extension of the term of the Development Agreement in accordance with Section 6.24 of the Development Agreement. Administration: E&B Natural Resources (E&B) will establish the Fund and designate a qualified, independent Fund Administrator. The Fund Administrator will not be an officer, employee, or affiliate of E&B. Application: To receive benefits, a selling owner of a residential property within the eligible area will submit to the Fund Administrator: (1) a signed Program Participation Agreement setting forth the terms of the Fund program (Program) and a signed claim form; (2) a copy of an accepted written offer to purchase the residence on arms-length terms from a buyer who is not related to or affiliated with the selling residential property owner and that complies with the Program requirements; and (3) a current (dated not earlier than six months prior to the property owner’s application) appraisal reflecting the Market Value of the property, which will be determined as if the Project had not been built. The appraisal must be prepared by an MAI or RM designated appraiser who is licensed in California and has at least five years of experience appraising similarly- situated residential properties in the South Bay region of Los Angeles County, California. Benefits: Within 14 calendar days after receiving a selling residential property owner’s application materials, the Fund will either agree to pay 5 LEGAL02/35096196v7 the amount of the claim, or obtain another appraisal of the residential property using the same criteria as the owner's appraisal. If the Fund obtains an alternate appraisal and the difference between the two appraisals is within 10% of the higher appraised Market Value, the Market Value for purposes of the residential property owner’s claim on the Fund will be equal to the average of the two appraised Market Values. If not, a third appraiser will be selected by the first two appraisers, and the Market Value determination in the third appraisal will be deemed the Market Value of the property. The owner and the Fund will be conclusively bound by the third appraisal. The difference between the Market Value of the residence, as so determined, and the property’s actual negotiated sale price will be paid by the Fund to the selling homeowner either at closing or within 10 calendar days after the Market Value of the residence has been determined, whichever takes place later. Market Value: Each appraisal obtained will determine the Market Value of the homeowner’s residential property as of the date of the appraisal and as if the Project had never been built. Claims: By submitting a claim to the Fund, the homeowner agrees to be bound by the terms of Program, and to accept reimbursement from the Fund for a loss in the Market Value of the owner’s residential property in exchange for foregoing any legal action to receive compensation for a decrease in the Market Value of the owner’s residential property that is caused by or results from the Project. (A general release will not be required.) Any offer that a participating owner enters into for sale of its residence must disclose that E&B has a right of first refusal to purchase the property for a price equal to the Market Value determined by the appraisal process without incurring any broker's commission. Any claim against the Fund must be submitted before the sale of the eligible residential property is completed; no claim will be considered or paid by the Fund after the closing of the sale of the residential property. Funding: E&B will ensure that, at all times during the Fund term, there is a minimum balance of $1,000,000 in the Fund, and E&B will ensure that at least $1,000,000 is in the Fund upon expiration of the six-year Fund term. E&B will regularly replenish the Fund up to the Funding Cap, as and if disbursements are made, to ensure that the Fund has readily- available funds to satisfy potential claims asserted by owners of eligible residential properties under the Program. E&B will also provide additional funding totaling a maximum of $4,000,000 from contributions based on 1.5% of gross project revenues on an annual basis until either a total of $4,000,000 has been contributed to the Fund from gross project revenues or the Funding Cap has been reached. Distribution: E&B will ensure that upon expiration of the Fund term, the Fund will have a remaining balance of at least $1,000,000 and up to a maximum sum of $5,000,000, depending on the total amount of claims that have been made against and paid by the Fund. The remaining 6 LEGAL02/35096196v7 amount in the Fund at the end of the Term shall be distributed to the then current owners of all otherwise-eligible residential properties located within 300 feet of the Project for which there has not previously been made any claim. The owner of each such residential property will be entitled to an equal, prorata share of the amount remaining in the Fund at the end of the Fund term (after all appraisal costs and other Fund administrative expenses have been deducted). The prorata share of the Fund balance to which each owner will be entitled will be based on the total number of properties entitled to share in the distribution. By way of example only, if at the end of the Fund term, there are 60 residential properties within 300 feet of the Project for which no claim has been made against, and no distribution received from, the Fund, then the owner of each such residential property will be entitled to 1/60 of the amount then remaining in the Fund after all appraisal costs and other Fund administrative expenses have been deducted. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 Recording Requested By: City of Santa Monica When Recorded Mail To: City of Santa Monica Santa Monica City Attorney’s Office 1685 Main Street, Third Floor Santa Monica, CA 90401 Attention: Senior Land Use Attorney ________________________________________________________________________ Space Above Line For Recorder’s Use No Recording Fee Required California Government Code Section 27383 DEVELOPMENT AGREEMENT BETWEEN CITY OF SANTA MONICA, PALMETTO HOSPITALITY OF SANTA MONICA I, LLC AND 1550 5TH STREET LLC NOVEMBER 26, 2013 1554FifthDAgmt.10013.KLK Final: November 26, 2013 i TABLE OF CONTENTS Recitals ........................................................................................................................................... 1 Article 1 Definitions.............................................................................................................. 3 Article 2 Description of the Project ...................................................................................... 6 2.1 General Description ............................................................................................... 6 2.2 Principal Components of the Project ..................................................................... 6 2.3 No Obligation to Develop ...................................................................................... 6 2.4 Vested Rights ......................................................................................................... 7 2.5 Permitted Uses ....................................................................................................... 9 2.6 Alcoholic Beverage Permits ................................................................................ 10 2.7 Significant Project Features and LUCE Community Benefits ............................ 11 2.8 Parking ................................................................................................................. 27 2.9 Design ................................................................................................................. 28 Article 3 Construction ......................................................................................................... 29 3.1 Construction Mitigation Plan ............................................................................... 29 3.2 Construction Hours .............................................................................................. 29 3.3 Outside Building Permit Issuance Date ............................................................... 29 3.4 Construction Period ............................................................................................. 30 3.5 Tiebacks ............................................................................................................... 30 3.6 Construction Staging ............................................................................................ 30 3.7 Damage or Destruction ........................................................................................ 30 3.8 Completed and Final Landmarks Commission Review ....................................... 30 Article 4 Project Fees, Exactions, Mitigation Measures and Conditions............................ 30 4.1 Fees, Exactions, Mitigation Measures and Conditions ........................................ 30 1554FifthDAgmt.10013.KLK Final: November 26, 2013 ii 4.2 Conditions on Modifications................................................................................ 31 4.3 Implementation of Mitigation Measures and Conditions of Approval ............... 31 Article 5 Effect of Agreement on City Laws and Regulations ........................................... 31 5.1 Development Standards for the Property; Existing Regulations ......................... 31 5.2 Permitted Subsequent Code Changes .................................................................. 32 5.3 Common Set of Existing Regulations .................................................................. 34 5.4 Conflicting Enactments ........................................................................................ 34 5.5 Timing of Development ....................................................................................... 34 Article 6 Architectural Review Board ................................................................................ 35 6.1 Architectural Review Board Approval ................................................................ 35 6.2 Expiration of ARB Approval ............................................................................... 35 Article 7 City Technical Permits ......................................................................................... 35 7.1 Definitions............................................................................................................ 35 7.2 Diligent Action by City ........................................................................................ 35 7.3 Conditions for Diligent Action by the City.......................................................... 36 7.4 Duration of Technical City Permits ..................................................................... 37 Article 8 Amendment and Modification ............................................................................. 37 8.1 Amendment and Modification of Development Agreement ............................... 37 Article 9 Term ..................................................................................................................... 38 9.1 Effective Date ...................................................................................................... 38 9.2 Term ..................................................................................................................... 38 Article 10 Periodic Review of Compliance ................................................................................ 38 10.1 City Review ......................................................................................................... 38 10.2 Evidence of Good Faith Compliance ................................................................... 38 10.3 Information to be Provided to Developer ............................................................ 39 1554FifthDAgmt.10013.KLK Final: November 26, 2013 iii 10.4 Notice of Breach; Cure Rights ............................................................................. 39 10.5 Failure of Periodic Review .................................................................................. 39 10.6 Termination of Development Agreement ............................................................ 39 10.7 City Cost Recovery .............................................................................................. 39 Article 11 Default.................................................................................................................. 40 11.1 Notice and Cure ................................................................................................... 40 11.2 Remedies for Monetary Default........................................................................... 40 11.3 Remedies for Non-Monetary Default .................................................................. 41 11.4 Modification or Termination Agreement by City ................................................ 43 11.5 Cessation of Rights and Obligations .................................................................... 44 11.6 Completion of Improvements .............................................................................. 44 Article 12 Mortgagees ........................................................................................................... 44 12.1 Encumbrances on the Property ............................................................................ 44 Article 13 Transfers and Assignments .................................................................................. 46 13.1 Transfers and Assignments .................................................................................. 46 13.2 Release Upon Transfer ......................................................................................... 47 Article 14 Indemnity to City ................................................................................................. 47 14.1 Indemnity ............................................................................................................. 47 14.2 City’s Right to Defense ........................................................................................ 48 Article 15 General Provisions ............................................................................................... 48 15.1 Notices ................................................................................................................. 48 15.2 Entire Agreement; Conflicts ................................................................................ 49 15.3 Binding Effect ...................................................................................................... 50 15.4 Agreement Not for Benefit of Third Parties ........................................................ 50 15.5 No Partnership or Joint Venture .......................................................................... 50 1554FifthDAgmt.10013.KLK Final: November 26, 2013 iv 15.6 Estoppel Certificates ............................................................................................ 50 15.7 Time ..................................................................................................................... 51 15.8 Excusable Delays ................................................................................................. 51 15.9 Governing Law .................................................................................................... 52 15.10 Cooperation in Event of Legal Challenge to Agreement ..................................... 52 15.11 Attorneys’ Fees .................................................................................................... 52 15.12 Recordation .......................................................................................................... 53 15.13 No Waiver ............................................................................................................ 53 15.14 Construction of this Agreement ........................................................................... 53 15.15 Other Governmental Approvals ........................................................................... 53 15.16 Venue .................................................................................................................. 54 15.17 Exhibits ................................................................................................................ 54 15.18 Counterpart Signatures......................................................................................... 55 15.19 Certificate of Performance ................................................................................... 55 15.20 Interest of Developer and Property Owner .......................................................... 55 15.21 Operating Memoranda ......................................................................................... 55 15.22 Acknowledgments, Agreements and Assurance on the Part of Developer ......... 56 15.23 Not a Public Dedication ....................................................................................... 56 15.24 Other Agreements ................................................................................................ 57 15.24 Severability and Termination ............................................................................... 57 1554FifthDAgmt.10013.KLK Final: November 26, 2013 v Exhibit “A” Legal Description Exhibit “B” Project Plans Exhibit “C” Permitted Fees and Exactions Exhibit “D” Mitigation Measures and Conditions of Approval Exhibit “E” SMMC Article 9 (Planning and Zoning) Exhibit “F-1” Local Hiring Program for Construction Exhibit “F-2” Local Hiring Program for Permanent Employment Exhibit “G-1” Hotel Conditions to Dispense Alcohol in Sundry Market Exhibit “G-2” Hotel Conditions to Dispense Alcohol in Common Area Exhibit “H” Restaurant Conditions to Dispense Alcohol Exhibit “I” Parking and Deliveries Management Plan Exhibit “J [Reserved] Exhibit “K” Construction Mitigation Plan Exhibit “L” Assignment and Assumption Agreement 1554FifthDAgmt.10013.KLK Final: November 26, 2013 1 DEVELOPMENT AGREEMENT This Development Agreement (“Agreement”), dated November _______, 2013 (“Effective Date”), is entered into by and between PALMETTO HOSPITALITY OF SANTA MONICA I, LLC, a California limited liability company (“Developer”), 1550 5TH STREET LLC, a California limited liability company (the “Owner”), and the CITY OF SANTA MONICA, a municipal corporation organized and existing pursuant to the laws of the State of California and the Charter of the City of Santa Monica (the “City”), with reference to the following facts: RECITALS A. Pursuant to California Government Code Section 65864 et seq., Chapter 9.48 of the Santa Monica Municipal Code, and Santa Monica Interim Ordinance No. 2356 (collectively, the “Development Agreement Statutes”), the City is authorized to enter into binding development agreements with persons or entities having a legal or equitable interest in real property for the development of such real property. B. Owner is the owner of approximately 22,500 square feet of land located in the City of Santa Monica, State of California, commonly known as 1550 and 1554-58 Fifth Street and 417 Colorado Avenue, as more particularly described in Exhibit “A” attached hereto and incorporated herein by this reference (the “Property”). The Property is currently developed with a building containing three wings: 1550 Fifth Street (an auto repair shop), 1554-1558 Fifth Street (another auto repair shop) and 417 Colorado Avenue (commercial offices). C. Developer has an equitable interest in the Property. Developer has a contractual right from Owner to develop and operate a hotel project on the Property pursuant to a ground lease of the Property. D. Developer has entered into a 25-year franchise agreement with Marriott to operate a Courtyard by Marriott on the Property. E. The Property is located within the Downtown Core land use designation under the City’s recently adopted Land Use and Circulation Element of its General Plan (the “LUCE”). The Property is located within the C3-C Downtown Overlay District under the City’s Zoning Ordinance. F. Developer desires to demolish the existing structures and construct a new six-story building on the Property with a subterranean parking garage. The new building will be used primarily as a moderately priced hotel, together with other separately leasable commercial space on portions of the ground floor intended for commercial uses as provided in this Agreement. G. On July 14, 2011, Developer filed an application for a Development Agreement, pursuant to Santa Monica Municipal Code (“SMMC”) Section 9.48.020 1554FifthDAgmt.10013.KLK Final: November 26, 2013 2 (the ”Development Application”). The Development Application was designated by the City as Application No. DEV 11-010. The Development Application is for a mixed-use, limited-service hotel project that also includes separately leasable commercial space on portions of the ground floor, and is more fully described in this Agreement (the “Project”). H. On April 26, 2011, the City Council adopted Interim Ordinance No. 2356 (“IZO”). The City Council has extended and/or modified the IZO on several occasions thereafter. The IZO prohibits the issuance of permits for development projects which would exceed 32 feet in height in the Downtown Core as delineated in the Land Use Designation Map approved by the City Council on July 6, 2010 unless developed pursuant to a development agreement adopted in accordance with SMMC Chapter 9.48. Adoption of this Agreement will allow for the issuance of permits for the Project. I. Following filing of the Development Application, the City prepared and circulated for public review and comment a Draft Environmental Impact Report (the “DEIR”) pursuant to the California Environmental Quality Act (“CEQA”) and designated SCH No. 2012041084. Following close of the comment period, the City prepared a Final Environmental Impact Report pursuant to CEQA (the “FEIR”). J. The primary purpose of the Project is to establish a new limited-service, mixed-use hotel project that also includes separately leasable commercial space on portions of the ground floor. Consistent with the LUCE, the Project is designed to be pedestrian-friendly and is located across the street from the forthcoming Exposition Light Rail terminus station in the City’s Downtown. The Parties desire to enter into this Agreement in conformance with the Development Agreement Statutes in order to achieve the development of the Project on the Property. K. The City Council has determined that a development agreement is appropriate for the proposed development of the Property. This Agreement will (1) eliminate uncertainty in planning for the Project and result in the orderly development of the Project, (2) assure installation of necessary improvements on the Property, (3) provide for public infrastructure and services appropriate to development of the Project, (4) preserve substantial City discretion in reviewing subsequent development of the Property, (5) secure for the City improvements that benefit the public, and (6) otherwise achieve the goals and purposes for which the Development Agreement Statutes were enacted. L. This Agreement is consistent with the public health, safety, and welfare needs of the residents of the City and the surrounding region. The City has specifically considered and approved the impact and benefits of the development of the Project on the Property in accordance with this Agreement upon the welfare of the region. Consistent with the LUCE, the Project will provide a number of significant project features and community benefits as set forth in Section 2.7 of this Agreement. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 3 M. The City Council has found that the provisions of this Development Agreement are consistent with the relevant provisions of the City’s General Plan, including the LUCE. N. On March 4, 2013, the City’s Architectural Review Board performed conceptual review of the Project Plans and was generally favorable as to the design of the Building with certain suggested refinements. O. On October 16, 2013, after having held duly noticed public hearings on the Development Application, the EIR and this Agreement, the City’s Planning Commission recommended that the City Council certify the EIR and further recommended that the City Council deny approval of this Agreement until various provisions of concern to the Planning Commission were addressed. P. On November 12, 2013, the City Council held a duly noticed public hearing on the Development Application, the EIR and this Agreement, and at such hearing the City [describe CEQA action] and introduced Ordinance No. _____ for first reading, approving this Agreement. Q. On ____________, 2013, the City Council adopted Ordinance No. ______, approving this Agreement. NOW THEREFORE, in consideration for the covenants and conditions hereinafter set forth, the Parties hereto do hereby agree as follows: ARTICLE 1 DEFINITIONS The terms defined below have the meanings in this Agreement as set forth below unless the Agreement expressly requires otherwise: 1.1 “Agreement” means this Development Agreement entered into between the City and Developer as of the Effective Date. 1.2 “ARB” means the City’s Architectural Review Board. 1.3 “Building” means the new six-story mixed-use hotel building with a two- level subterranean parking garage proposed by Developer to be developed on the Property. Building includes the Hotel and Leasable Space. 1.4 “Building Height” has the meaning as defined in Zoning Ordinance Section 9.04.10.02.030, except that for the purposes of calculating this Project’s Building Height, the roof shall include the horizontal waterproofing membrane of the Project’s roof, but not any crickets, flashings, parapets, or other elements at the rooftop of the Building that are installed atop, or as an extension of, the roof’s waterproofing membrane surface. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 4 1.5 “City Council” means the City Council of the City of Santa Monica, or its designee. 1.6 “City Parties” means the City, its City Council, boards and commissions, departments, officers, agents, employees, volunteers and other representatives. 1.7 “Discretionary Approvals” are actions which require the exercise of judgment or a discretionary decision, and which contemplate and authorize the imposition of revisions or additional conditions, by the City, including any board, commission, or department of the City and any officer or employee of the City. Discretionary Approvals do not include Ministerial Approvals. 1.8 “Effective Date” has the meaning set forth in Section 9.1 below. 1.9 “Floor Area” has the meaning as defined in Section 9.04.02.030.315 of the Zoning Ordinance; provided, however, that mechanical rooms located on roof areas shall not count as floor area if used for solar-related equipment. 1.10 “Floor Area Ratio” and FAR” mean the Floor Area of the Project, as calculated in accordance with Section 1.9 of this Agreement, divided by the area of the Property; provided, however, that in accordance with the IZO, Subterranean Space (regardless of its use) shall not be included in the calculation of the FAR and outdoor dining areas shall not be included in the calculation of the FAR. 1.11 “General Plan” or “City General Plan” means the General Plan of the City of Santa Monica, and all elements thereof including the LUCE, as of the Effective Date unless otherwise indicated in this Agreement. 1.12 “Hotel” means a moderately priced hotel offering temporary lodging to patrons for not more than thirty (30) consecutive days including, but not limited to, an establishment held out to the public as a motor lodge, motel, apartment hotel, hostel, inn, tourist court or other similar transient use. Hotel shall not include the Leasable Space provided such Leasable Space is leased to and operated by a third party separate and independent of the operator of the Hotel. 1.13 “Hotel Use” means those activities and services customarily associated with a limited-service hotel which may include, without limitation, meeting and breakfast/luncheon/dining rooms, bistro/cafe, Restaurant (which may include a bar counter), lounge and associated support facilities, fitness/exercise room and equipment for hotel guests only, business convenience center, retail sundry shop, Incidental Food Service, swimming pool/sun deck, jacuzzi, and valet or attendant parking services. Hotel Use shall not pertain to the Leasable Space provided such Leasable Space is leased to and operated by a third party separate and independent of the operator of the Hotel. 1.14 “Incidental Food Service” has the meaning given that term in Section 9.04.02.030.420 of the SMMC. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 5 1.14 “Including” means “including, but not limited to.” 1.15 “Leasable Space” means the ground floor areas of the Building identified as “Leasable Space” on the Project Plans. 1.16 “LEED® Rating System” means the Leadership in Energy and Environmental Design (LEED®) for New Construction & Major Renovations adopted by the U.S. Green Building Council and implemented by the Green Building Certification Institute in effect at the time of ARB submittal. In the event no such system exists at the time Developer submits for ARB approval, an alternative green building rating system may be selected by the Developer subject to approval by the City. 1.17 “Legal Action” means any action in law or equity. 1.18 “Maximum Floor Area” means 78,750 square feet of Floor Area. 1.19 “Ministerial Approvals” mean any action which merely requires the City (including any board, commission, or department of the City and any officer or employee of the City), in the process of approving or disapproving a permit or other entitlement, to determine whether there has been compliance with applicable statutes, ordinances, regulations, or conditions of approval. 1.20 “Parties” mean both the City and Developer and “Party” means either the City or Developer, as applicable. 1.21 “Planning Director” means the Planning Director of the City of Santa Monica, or his or her designee. 1.22 “Project” means all aspects of the proposed development of the Property as more particularly described in this Agreement and on the Project Plans 1.23 “Project Plans” mean the plans for the Project that are attached to this Agreement as Exhibit “B.” 1.24 “Restaurant Uses” shall have the meaning given the term “Restaurant” as defined in Section 9.04.02.030.730 of Existing Regulations. 1.25 “Subterranean Space” means all space in the Project below the ground floor as shown on the Project Plans attached as Exhibit “B.” 1.26 “Zoning Ordinance” means the City of Santa Monica Comprehensive Land Use and Zoning Ordinance (Chapter 9.04 of the SMMC), and any applicable Interim Zoning Ordinance, as the same are in effect on the Effective Date, as set forth in its entirety within Exhibit “E” (Planning and Zoning). 1554FifthDAgmt.10013.KLK Final: November 26, 2013 6 ARTICLE 2 DESCRIPTION OF THE PROJECT 2.1 General Description. The Project includes all aspects of the proposed development of the Property as more particularly described in this Agreement and on the Project Plans. If there is a conflict or inconsistency between the text of this Agreement and the Project Plans, the Project Plans will prevail; provided, however, that omissions from the Project Plans shall not constitute a conflict or inconsistency with the text of this Agreement. 2.2 Principal Components of the Project. The Project consists of the following principal components, as well as the other components delineated in the Project Plans, all of which are hereby approved by the City subject to the other provisions of this Agreement: (a) Demolition of all existing structures on the Property. (b) Construction of a mixed-use hotel development on the Property in accordance with the Project Plans for: (i) Hotel Use having up to 136 guest rooms and other Hotel facilities, and (ii) the Leasable Space with a minimum of 2,400 square feet and maximum of 4,500 square feet of Floor Area. (c) Construction of a multi-level subterranean parking garage and basement on the Property in accordance with the project Plans with a minimum of seventy-seven (77) striped parking spaces consisting of standard, compact and handicapped spaces. 2.3 No Obligation to Develop. 2.3.1 Except as specifically provided herein: (a) Nothing in this Agreement shall be construed to require Developer to proceed with the construction of the Project or any portion thereof. (b) The decision to proceed or to forbear or delay in proceeding with construction of the Project or any portion thereof shall be in Developer’s sole discretion. (c) Failure by Developer to proceed with construction of the Project or any portion thereof shall not give rise to any liability, claim for damages or cause of action against Developer, except as may arise pursuant to a nuisance abatement proceeding under SMMC Chapter 8.96, or any successor legislation. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 7 2.3.2 Failure by Developer to proceed with construction of the Project or any portion thereof shall not result in any loss or diminution of development rights, except upon expiration of Developer’s vested rights pursuant to this Agreement, or the termination of this Agreement. 2.3.3 Notwithstanding any provision of this Section 2.3 to the contrary, if Developer proceeds with the construction of the Project, except as otherwise expressly limited in this Agreement, Developer shall be required to implement all mitigation measures and conditions of approval required under this Agreement in accordance with Exhibit “D”. If Developer has proceeded with the construction of the Project, the mitigation measures and conditions of approval in Exhibit “D” shall survive termination of this Agreement (except as otherwise expressly limited in this Agreement), and notice of the mitigation measures and conditions shall be recorded separately from and concurrently with this Agreement. 2.4 Vested Rights. 2.4.1 Approval of Project Plans. The City hereby approves the Project Plans. The City shall maintain a complete copy of the Project Plans, stamped “Approved” by the City, in the Office of the City Clerk, and Developer shall maintain a complete copy of the Project Plans, stamped “Approved” by the City, in its offices or at the Project site. The Project Plans to be maintained by the City and Developer shall be in a half-size set. Further detailed plans for the construction of the Building and improvements, including, without limitation, structural plans and working drawings shall be prepared by Developer subsequent to the Effective Date based upon the Project Plans. 2.4.2 Minor Modifications to Project. Developer, with the approval of the Planning Director, may make minor changes to the Project or Project Plans (“Minor Modifications”) without amending this Agreement; provided that the Planning Director makes the following specific findings that the Minor Modifications: (i) are consistent with the Project’s approvals as approved by the City Council; (ii) are consistent with the provisions, purposes and goals of this Agreement; (iii) are not detrimental to the public health, safety, convenience or general welfare; and (iv) will not significantly and adversely affect the public benefits associated with the Project. The Planning Director shall notify the Planning Commission in writing of any Minor Modifications approved pursuant to this Section 2.4.2. Any proposed change which the Planning Director denies as not qualifying for a Minor Modification based on the above findings must be processed as a Major Modification. 2.4.3 Modifications Requiring Amendment to this Agreement. Developer shall not make any “Major Modifications” (defined below) to the Project without first amending this Agreement to permit such Major Modifications. A “Major Modification” means the following: (a) Reduction of any minimum ground floor setback of the Project, as depicted on the Project Plans, if by such reduction the applicable setback 1554FifthDAgmt.10013.KLK Final: November 26, 2013 8 would be less than is permitted in the applicable zoning district under the Zoning Ordinance in effect on the date such modification is applied for; (b) Any change in use not consistent with the permitted uses defined in Section 2.5 below; (c) Any one time increase in the number of hotel guest rooms specified in Section 2.2(b) by more than one (1) guest room, or any reduction in the number of hotel guest rooms specified in Section 2.2(b) by more than 4 guest rooms; (d) Any decrease in the number of parking spaces shown on the Project Plans by more than 8 marked parking spaces; (e) Any material change in the curb cuts shown on the Project Plans; (f) Any variation in the design, massing or building configuration, including but not limited to, Floor Area and Building Height, that renders such aspects out of substantial compliance with the Project Plans after ARB Approval; and (g) Any change that would substantially reduce or alter the community benefits or significant project features as set forth in Section 2.7. If a proposed modification does not exceed the Major Modification thresholds established above, then the proposed modification may be reviewed in accordance with Section 2.4.2. 2.4.4 City Consent to Modification. The Planning Director shall not unreasonably withhold, condition, or delay his or her approval of a request for such Minor Modification. The City may impose fees, exactions, conditions, and mitigation measures in connection with its approval of a Minor or Major Modification, subject to any applicable law. Notwithstanding anything to the contrary herein or in the Existing Regulations, if the Planning Director approves a Minor Modification or if the City approves a Major Modification (and the corresponding amendment to this Agreement for such Major Modification), as the case may be, Developer shall not be required to obtain any other Discretionary Approvals for such modification, except for ARB approval, in the case of certain Major Modifications. 2.4.5 Right to Develop. Subject to the provisions of Section 3.3 below, during the Term (as defined in Section 9.2 below) of this Development Agreement, Developer shall have the vested rights (the “Vested Rights”) to (a) develop and construct the Project in accordance with the following: (i) the Project Plans (as the same may be modified from time to time in accordance with this Agreement); (ii) any Minor Modifications approved in accordance with Section 2.4.2; (iii) any Major Modifications which are approved pursuant to Section 2.4.3; and (iv) the requirements and obligations of Developer related to the improvements which are specifically set forth in this 1554FifthDAgmt.10013.KLK Final: November 26, 2013 9 Agreement, and (b) use and occupy the Project for the permitted uses set forth in Section 2.5. Except for any required approvals from the ARB pursuant to Section 6.1 of this Agreement, the City shall have no further discretion over the elements of the Project which have been delineated in the Project Plans (as the same may be modified from time to time in accordance with this Agreement). 2.5 Permitted Uses. The City approves the following permitted uses for the Project: 2.5.1 Permitted Uses. Pursuant to this Agreement, Permitted Uses in the Project shall be as specified below: (a) At the ground floor, the following are Permitted Uses: (i) Within the Hotel: all Hotel Uses are permitted. (ii) Within the Leasable Space on the ground floor: only Restaurant Use is permitted; provided, however, that if Developer is unable to secure a suitable credit-worthy tenant for a Restaurant Use on commercially reasonable terms within at least 180 days after initiating good faith attempts to do so prior to the initial occupancy of the Leasable Space, Developer may thereafter lease the Leasable Space for neighborhood serving, transit and pedestrian-oriented, or Hotel/guest/visitor serving uses with the approval of the Planning Director, in accordance with Section 2.4.2 of this Agreement, which approval shall not be unreasonably withheld. Furthermore, each time there is a change in tenancy or anticipated vacancy of any portion of the Leasable Space consisting of at least 2,500 square feet of Floor Area, Developer shall, for a period of not less than sixty (60) days, again attempt to secure a Restaurant Use for the Leasable Space on commercially reasonable terms; provided, however, that if Developer is unable to secure a suitable credit-worthy tenant for a Restaurant Use on commercially reasonable terms within that 60 day period after initiating good faith attempts to do so, Developer may thereafter lease the Leasable Space for neighborhood serving, transit and pedestrian- oriented, or Hotel/guest/visitor serving uses with the approval of the Planning Director, in accordance with Section 2.4.2 of this Agreement, which approval shall not be unreasonably withheld. (iii) Alley Deliveries: In addition to the locations specified on the Project Plans for off-street loading, the eastern half of Fourth Court alley along the shared western boundary of the Property may be used for deliveries and loading to and from the Project between the hours of 10:00 a.m. and 2:00 p.m daily. (iv) Above the ground floor: the following is a Permitted Use: Any and all Hotel Uses. (v) In the Subterranean Space: Parking including valet parking, car share parking, and Shared Parking in accordance with Section 2.7.2(j) below; Hotel Uses including an employee lounge, shower and lockers; bicycle storage/parking; 1554FifthDAgmt.10013.KLK Final: November 26, 2013 10 mechanical and electrical equipment; storage space; and any other uses that are designated as Permitted Uses for the Zoning District in which the Property is located provided that either (xx) the Planning Director has determined, in writing, that there is adequate parking based on a parking demand study or (yy) a parking in-lieu fee has been paid to the City for such additional use beyond those uses contemplated in this Agreement and the Project Plans. 2.5.2 Conditionally Permitted Uses. “Conditionally Permitted Uses” include (a) all uses that are identified as Conditionally Permitted Uses in the SMMC in effect at the time the use is sought to be established, with the exception of any uses that are defined as Permitted Uses herein, and (b) any uses requiring a Conditional Use Permit in Section 2.6.3. Conditionally Permitted Uses may commence operating at the Project upon issuance of a Conditional Use Permit (“CUP”) in accordance with the procedures established in the SMMC and the issuance of a business license. 2.6 Alcoholic Beverage Permits. 2.6.1 Hotel. The Hotel operator may sell and/or furnish alcoholic beverages (“Alcoholic Beverages”) to Hotel guests within Hotel common areas (including the ground floor lobby, lounge, bistro, and the second floor meeting room, terrace, spa and deck areas without obtaining a conditional use permit pursuant to SMMC Section 9.04.10.18 so long as the operator agrees in writing to comply with the terms and conditions in Exhibit “G-2”. Additionally, the Hotel operator may sell Alcoholic Beverages to Hotel guests from the sundry market without obtaining a conditional use permit pursuant to SMMC Section 9.04.10.18 so long as the operator agrees in writing to comply with the terms and conditions in Exhibit “G-1”. Notwithstanding the foregoing, the operator may apply for a conditional use permit pursuant to SMMC Section 9.04.10.18 in order to sell or furnish alcoholic beverages for consumption on terms other than those in Exhibits “G-1” or “G-2”. This Section 2.6.1 shall survive the expiration of the Term of this Agreement and shall remain binding on Developer, its successors and assigns, and shall continue in effect for the life of the Project. Notice of the terms and conditions in Exhibits “G-1” and “G-2” shall be recorded separately from and concurrently with this Agreement. 2.6.2 Restaurants. Whether as part of the Hotel operations or not, a Restaurant operator may dispense for sale or other consideration, Alcoholic Beverages for on-site consumption in all or any portion of the Project Plans marked as “Leasable Space” -- provided that there are not more than 4,500 square feet in total of Restaurant Uses in the Project -- so long as the operator agrees in writing to comply with the terms and conditions in Exhibit “H”. The permitted service area may include any outdoor seating where meal service is available. Developer shall cause all Restaurant operator leases or transfers of ownership to contain a clause that requires the new operator to comply with the terms and conditions in Exhibit H in the event that Alcoholic Beverages are intended to be dispensed for on-site consumption. Notwithstanding the foregoing, the operator of a Restaurant may apply for a conditional use permit pursuant to SMMC Section 9.04.10.18 in order to sell or furnish alcoholic beverages for consumption on-site 1554FifthDAgmt.10013.KLK Final: November 26, 2013 11 on terms other than those in Exhibit H. This Section 2.6.2 shall survive the expiration of the Term of this Agreement and shall remain binding on Developer, its successors and assigns, and shall continue in effect for the life of the Project. 2.6.3 Conditional Use Permit. A conditional use permit pursuant to SMMC Section 9.04.10.18 shall be required for any proposed use in the Building that (a) includes the service or sale of alcoholic beverages and (b) does not comply with the conditions set forth in Sections 2.6.1 or 2.6.2. Notwithstanding the foregoing, no conditional use permit shall be required for catered events for which the necessary permits then required for such events have been obtained. This Section 2.6.3 shall survive the expiration of the Term of this Agreement and shall remain binding on Developer, its successors and assigns, and shall continue in effect for the life of the Project. 2.7 Significant Project Features and LUCE Community Benefits. The significant project features and LUCE community benefits identified below in this Section 2.7 shall be achieved and developed in accordance with the terms of this Agreement. 2.7.1 Significant Project Features. Set forth below in this Section 2.7.1 are project features that will be provided to the City: (a) tax revenues, including transient occupancy tax, sales tax, property tax, business license tax, parking tax, and utility user’s tax; (b) a desirable mix of uses within a new Building to be constructed in the Downtown immediately across the street from the Exposition Light Rail terminus station; (c) enhanced architecture -- including the qualities of the Building massing, materials, finishes and colors -- at an important gateway location to the City’s Downtown from the Fifth Street I-10 Freeway off-ramp and immediately across the street from the Exposition Light Rail terminus station. The architectural design of this Courtyard by Marriott Hotel has been tailored specifically for Santa Monica and is greatly enhanced in comparison with other Courtyard by Marriott Hotels. Moreover, also consistent with the LUCE, this Project is paired with a concurrent hotel project across the street at 501 Colorado Avenue at this gateway location. (d) providing new employment opportunities in the Hotel and Leasable Space; (e) providing the City with fee revenue for child care facilities; (f) providing the City with fee revenue for cultural arts; (g) providing the Santa Monica-Malibu Unified School District with fee revenue for capital improvements; 1554FifthDAgmt.10013.KLK Final: November 26, 2013 12 (h) installation of standard water and wastewater reduction fixtures within the Project as legally applicable; (i) construction jobs; (j) various standard public improvements and fees; and (k) trip reduction measures as required by SMMC Chapter 9.16. (l) Hotel Living Wage. (i) Purpose. The purpose of this subsection (l) is to ensure that Hotel workers receive fair and reasonable compensation as a significant Project benefit. This Hotel’s living wage obligations shall be generally comparable to those provisions that may be imposed on other hotels seeking approval of development agreements in Santa Monica, while taking into account the average daily room rates of those other hotels in comparison to this Hotel’s average daily room rate. (ii) All Hotel Workers Covered. To the extent they are working at the Property, all workers performing Hotel Use services, whether as employees of the Hotel or as employees of a contractor providing Hotel Use services within the Hotel, shall be covered by this subsection (l); provided, however, that notwithstanding the foregoing, the employees of any third party contractors providing the following services at the Hotel shall not be considered a Hotel Use service covered by this subsection (l): 1. Parking attendants/valets 2. Bicycle attendants 3. Bicycle maintenance 4. Security officers 5. Equipment or facility maintenance (iii) Living Wage Amount. Workers covered by this subsection (l) shall be paid at least the minimum hourly wage rate specified herein as a Hotel Living Wage. This requirement shall not apply to workers who do not spend the majority of their hours of employment during a normal work week on the Property. The initial amount of the Hotel Living Wage required by this Section shall be $15.37 per hour, without any deduction on account of any gratuity or any part thereof given to or left for a Hotel worker by a Hotel patron. Any tips received by Hotel workers covered by this subsection (l) shall be the sole property of the worker or workers to whom it was paid, given or left for. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 13 (iv) CPI Adjustment. The Hotel Living Wage minimum hourly rate required by this subsection (l) shall be adjusted annually in accordance with SMMC section 4.65.010. (v) Collective Bargaining Exception. The provisions of this subsection (l) may be waived, in full or in part, in a bona fide collective bargaining agreement, but only if and to the extent the waiver is explicitly set forth in such agreement in clear and unambiguous terms. Unilateral implementation of terms and conditions of employment by either party to a collective bargaining relationship shall not constitute, or be permitted as, a waiver of all of any part of the provisions of this subsection (l) . This provision shall not negate the confidential nature of any such collective bargaining agreement, and City hereby agrees to maintain the confidentiality of such collective bargaining agreement, including all of its terms except only that City can disclose the extent to which such an agreement contains an explicit waiver of any of the terms or provisions of this Development Agreement. (vi) Expiration. If not terminated any earlier, this subsection (l) shall automatically expire and be of no further force or effect upon expiration of this Agreement. (vii) Termination Rights. In the event the City adopts a Living Wage Ordinance of general application to hotels located within the City, including the Hotel within this Project, then the provisions of this subsection (l) shall automatically be of no further force and effect. (viii) Leasable Space. So long as the Leasable Space is leased and operated by a third party not related to Developer or the Hotel operator, the workers in the Leasable Space shall not be governed by the Living Wage provisions specified this subsection (l). 2.7.2 LUCE Community Benefits. Set forth below in this Section 2.7.2 are the community benefits that will be provided by the Project. (a) Community Physical Improvements. Developer shall incorporate, construct, operate and maintain enhanced elements of the Building’s design, including an Enhanced Walkway Area and Open Arcade as shown on the Project Plans; Developer shall make the Enhanced Walkway and Open Arcade Areas accessible to the public at all times, except that Developer may limit public access to such Enhanced Walkway and Open Arcade Areas between the hours of 2:00 am through 5:00 am. The public use of the Enhanced Walkway and Open Arcade Areas shall be: (i) consistent with the terms and conditions of this Agreement; (ii) solely for pedestrian access to and passive use of the Enhanced Walkway and Open Arcade by the public, including walking, strolling, and similar activity; (iii) use of the bike share area in the Open Arcade if and when established; and (iv) compatible with Developer’s development, use and enjoyment of the Project. No use other than a bike share system in the Open Arcade and pedestrian access to and passive use of the Enhanced Walkway and Open Arcade by the 1554FifthDAgmt.10013.KLK Final: November 26, 2013 14 public shall be permitted on the Enhanced Walkway or Open Arcade. Notwithstanding the above, Developer may limit public access to the Enhanced Walkway Area during other hours, but only if the Enhanced Walkway area is utilized for outdoor dining. In the event any portion of the Hotel and/or Leasable Space is occupied by one or more Restaurant or other food service type of uses, Developer and/or Restaurant Operator shall ensure that tables and chairs are provided in the Enhanced Walkway as shown on the Project Plans, or as otherwise may be approved by the Planning Director, to accommodate not less than twelve (12) and not more than twenty-four (24) patrons during the Restaurant’s hours of service. Any request for additional exterior seating shall be subject to Planning Director approval as provided in Condition 10 of Exhibit H. In the event the Hotel and/or Leasable Space is not occupied by a Restaurant Use or other food service type of uses, Developer and/or Leasable Space Operator(s) shall nonetheless ensure that outdoor seating is provided in the Enhanced Walkway as shown on the Project Plans, or as otherwise may be approved by the Planning Director, to accommodate not less than nine (9) persons, or as otherwise may be approved by the Planning Director based on the actual tenant and use of the Leasable Space. The Enhanced Walkway and Open Arcade shall remain the private property of Developer with members of the public having only a license to occupy and use the Enhanced Walkway and Open Arcade in a manner consistent with this Article 2. Nothing in this Agreement shall give members of the public the right, without the prior written consent of Developer, which consent may be conditioned or withheld by Developer in Developer’s sole discretion, to engage in any other activity on the Enhanced Walkway or Open Arcade, including, without limitation any of the following: (i) cooking, dispensing or preparing food; (ii) selling any item or engaging in the solicitation of money, signatures, or other goods or services; (iii) sleeping or staying overnight; (iv) using sound amplifying equipment; or (v) engaging in any illegal, dangerous, intimidating or other activity that Developer reasonably deems to be inconsistent with other uses in the Project or with the use of the Enhanced Walkway or Open Arcade by other members of the public for the permitted purposes, such as excessive noise or boisterous activity, bicycle or skateboard riding skating or similar activity, being intoxicated, having offensive bodily hygiene, having shopping carts or other wheeled conveyances (except for wheelchairs and baby strollers/carriages), and Developer shall retain the right to cause persons engaging in such conduct to be removed from the Project. If any such persons refuse to leave the Project, they may be deemed by Developer to be trespassing in accordance with applicable law concerning the removal of trespassers from private property. Developer shall be entitled to establish and post rules and regulations for use of the Enhanced Walkway and Open Arcade consistent with the foregoing. Nothing in this Agreement or in the Project Plans shall be deemed to mean that the Enhanced Walkway or Open Arcade is a public park or is subject to legal requirements applicable to a public park or other public space. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 15 (b) Local Hiring. A local hiring program shall be implemented within the Project in accordance with Exhibits “F-1” and “F-2”. In connection with the local hiring program, each time a new Hotel or Restaurant opens within the Project, Developer or the operator of any new Hotel or Restaurant in the Project shall conduct at least one on-site job fair targeted towards recruitment of local resident candidates for on-site Hotel and/or Restaurant jobs at least fourteen (14) days before recruitment is opened up to general circulation for the initial hiring by the new Hotel or Restaurant. This on- site job fair shall be promoted locally in the same manner as is specified in Exhibit F-2. Furthermore, at least sixty (60) days before recruitment is opened up to general circulation for the initial hiring by the new Hotel or Restaurant, Developer or the operator of any new Hotel or Restaurant in the Project shall prepare and submit to the City’s Planning Director for review and approval a written local hiring program consistent with the obligations under this Agreement. The approved local hiring plan may be amended from time to time thereafter, subject to the Planning Director’s review and approval. (c) Transportation Demand Management. Developer shall adopt and implement the following Transportation Demand Management Plan (“TDM Plan”): (i) AVR Standards. Developer shall achieve an average vehicle ridership (“AVR”) of 2.0 commencing from one year after the City’s issuance of a final certificate of occupancy for the Building; provided, however, that if the Exposition Light Rail Line is not then fully operational, then the AVR target shall be 1.75 until the Fourth Street Station for the Exposition Light Rail Line is fully operational. SMMC Chapter 9.16 shall govern how the AVR is calculated, except that notwithstanding SMMC Section 9.16.070(d)(4)((B), a Zero Emission Vehicle (“ZEV”) shall be counted as a vehicle for purposes of calculating the AVR. Developer will determine its AVR through employee surveys for one consecutive week each calendar year beginning the first year the hotel opens for business. Developer shall submit such baseline survey to the City at the time of submittal of its annual compliance report for this Agreement. The City shall monitor the TDM Plan performance as part of the City’s Periodic Review for the Project. If during any annual evaluation of the Project’s employee trip reduction plan, the AVR requirement has not been achieved for the Project, then Developer shall propose modifications to the TDM Plan that Developer considers likely to achieve the AVR requirement by the date of the next annual evaluation of the Project’s employee trip reduction plan. In addition, the City’s Planning Director may recommend feasible modifications to the TDM Plan, including, without limitation, that Developer shall make available to all of its employees on a continuing basis a Metro EZ public transit pass (or equivalent multi-agency monthly transit pass) at a subsidized rate of no less than 50% of the cost of the transit pass. Failure to achieve the AVR standards as provided in this Section will not constitute a Default within the meaning of the Agreement so long as Developer is in compliance with the TDM Plan. For purposes of determining AVR, the survey must be conducted and AVR calculated in accordance with SMMC 9.16.070(d)(2)(1) except to the extent modified by this Agreement below: 1554FifthDAgmt.10013.KLK Final: November 26, 2013 16 The survey must be taken over five consecutive days during which the majority of employees are scheduled to arrive at or leave the worksite. The days chosen cannot contain a holiday and cannot occur during ‘Rideshare Week’ or other ‘event’ weeks (i.e., Bicycle Week, Walk to Work Week, Transit Week, etc.). This survey must have a minimum response rate of seventy-five percent of employees who report to or leave work between six a.m. and ten a.m., inclusive, and seventy-five percent of employees who report to or leave work between three p.m. and seven p.m., inclusive. Employers that achieve a ninety percent or better survey response rate for the a.m. or p.m. window may count the ‘no-survey responses’ as ‘other’ when calculating their AVR . . . * * * The procedure for calculating AVR at a worksite shall be as follows: (A) The AVR calculation shall be based on data obtained from an employee survey as defined in [SMMC Section 9.16.070(d)(2)]. (B) AVR shall be calculated by dividing the number of employees who report to or leave the worksite by the number of vehicles arriving at or leaving the worksite during the peak periods. All employees who report to or leave the worksite that are not accounted for by the employee survey shall be calculated as one employee per vehicle arriving at or leaving the worksite. Employees walking, bicycling, telecommuting, using public transit, or on their day off under a recognized compressed work week schedule shall be counted as employees arriving at or leaving the worksite without vehicles. Motorcycles shall be counted as vehicles. (C) A child or student may be calculated in the AVR as an additional passenger in the carpool/vanpool if the child or student travels in the car/van to a worksite or school/childcare facility for the majority (at least fifty-one percent) of the total commute. (D) If two or more employees from different employers commute in the same vehicle, each employer must account for a proportional share of the vehicle 1554FifthDAgmt.10013.KLK Final: November 26, 2013 17 consistent with the number of employees that employer has in the vehicle. (E) Any employee dropped off at a worksite shall count as arriving in a carpool only if the driver of the carpool is continuing on to his/her worksite. (F) Any employee telecommuting at home, off- site, or at a telecommuting center for a full work day, eliminating the trip to work or reducing the total travel distance by at least fifty-one percent shall be calculated as if the employee arrived at the worksite in no vehicle. Furthermore, the definition of AVR contained in SMMC Section 9.16.030, as written on the Effective Date, shall govern how AVR is calculated. That definition reads as follows: “The total number of employees who report to or leave the worksite or another job-related activity during the peak periods divided by the number of vehicles driven by these employees over that five-day period. The AVR calculation requires that the five-day period must represent the five days during which the majority of employees are scheduled to arrive at the worksite. The hours and days chosen must be consecutive. The averaging period cannot contain a holiday and shall represent a normal situation so that a projection of the average vehicle ridership during the year is obtained.” (ii) TDM Plan Program Elements. The specific program elements of the TDM program for the Project are as follows: 2.7.2.1 Transportation Demand Management Association. Developer, the Hotel operator and Building tenants shall be required to participate in the establishment of a geographic-based Transportation Demand Management Association (TMA) that may be defined by the City. TMAs provide employees, businesses and visitors of an area with resources to increase the amount of trips taken by transit, walking, bicycling, and ridesharing. If the City adopts a requirement that a TMA be formed for this geographic area, Developer shall attend organizational meetings and provide traffic demand data to the TMA. Developer shall require in all leases and hotel operating agreements it executes as landlord for space within the Project that building tenants be required to participate as members in the TMA and that all subleases contain this same provision. The Developer and/or Hotel operator, and all tenants of the Leasable Space, shall actively participate in the on-going activities of any such TMA. Developer may elect to provide some or all of the services required by this subsection 2.7.2.1 through the TMA, in consultation with the City’s Transportation Demand Program manager. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 18 2.7.2.2 Employee Transportation Coordinator. An Employee Transportation Coordinator (ETC) shall be designated for this Project by Developer. The ETC shall manage all aspects of this TDM program and participate in the local TMA that may be established by the City, City-sponsored workshops and information roundtables. The ETC shall be responsible for actively encouraging and making available informational materials on options for alternative transportation modes and opportunities. The ETC shall contact each employee at the point of hire and at least once per year thereafter with an offer of personalized commute assistance, including, but not limited to: (a) making available to each new employee a Metro EZ public transit pass (or equivalent multi-agency monthly transit pass) valid every day for the first three months of the new employee’s employment (offered during the first three months of employment only) to establish on-going ridership habits (see subsection 2.7.2.15.1), (b) providing guidance on routes to use, (c) providing information concerning light rail transit, (d) providing information about carpool and vanpool formation, (e) providing information concerning bus routes, and (f) facilitating a discussion of any other transit-related benefits that may be available. The ETC shall also promote non-drive-alone options to employees by providing onsite information, including a newsletter, at least two events per year (e.g., Rideshare Week and Bike Week) and occasional marketing activities such as contests and raffles. The ETC shall coordinate with nearby employers to facilitate more effective carpool/vanpool matching, events and promotions. In addition, transit fare media will be made available for purchase through the ETC to employees and visitors during typical business hours. Employee Transportation Coordinator services may be provided through the TMA contemplated in subsection 2.7.2.1, above. The ETC and/or other designated/trained Hotel employee shall be available to assist Hotel guests with (a) providing guidance on routes to use, (b) providing information related to light rail transit, (c) providing information related to bus routes, and (d) facilitating a discussion of any other transit-related benefits that may be available. 2.7.2.3 Transportation Information Center. Developer shall ensure that the Hotel operator promotes and makes information available on-site for hotel employees and hotel guests, and that commercial tenants of the Leasable Space promote and provide their employees with information about local public transit services (including bus lines, light rail lines, bus fare programs, ride share programs and shuttles) and bicycle facilities (including routes, rental and sales locations, on-site bicycle racks and showers.) Developer shall ensure that the Hotel operator offers (e.g., at check- in) each hotel party with a map, schedule and fare information for utilizing the transit system in Santa Monica and the surrounding area. Developer shall further ensure that the Hotel operator also makes information available to hotel guests about transit and light rail opportunities, carshare, rideshare, shopping locally, and bike and walking routes, by posting such information (a) on the Hotel’s website, (b) in a conspicuous place in the lobby, (c) on a computer terminal or other form of electronic media in the Hotel lobby, and (d) through either printed materials or electronic messages provided in each guest room. Developer shall further ensure the Hotel operator also makes walking and biking 1554FifthDAgmt.10013.KLK Final: November 26, 2013 19 maps available for employees and visitors, which shall include but not be limited to information about convenient public transit stops, local services, and restaurants within walking distance of the Project. Developer shall make information available to employees and commercial tenants and employees of the hotel operator regarding local rental housing agencies. Such transportation information shall be provided on-site, regardless of whether also provided on a website. 2.7.2.4 Secure Bicycle Parking for Employees/Hotel Guests. Developer shall provide secure long-term bicycle storage for employees and for hotel guests in a secure convenient location approved by the Planning Director. This shall have a capacity for a minimum of thirty-one (31) bicycles. For the purpose of this requirement, secure bicycle parking shall mean bicycle lockers, an attended cage, or a secure parking area. 2.7.2.5 Visitor Bicycle Parking. Developer shall provide short-term bicycle parking for twelve (12) bicycles for guests of the Project. This guest bike parking shall be located in various areas on the ground floor of the Project and may be relocated from time to time as long as the parking remains on the ground floor. 2.7.2.6 Bicycle Rentals by Hotel Guests. The Hotel operator shall either provide or may contract with a local bicycle rental business to make no less than ten (10) bicycles available on-site for rental by hotel guests, whereas additional bicycles shall be provided as needed based on guest demand; provided, however, that in the event any portion of the Leasable Space is rented to a bicycle rental business, then the Hotel operator’s obligation to also make bicycles available to Hotel guests shall be deemed satisfied so long as the on-site bicycle rental business continues to operate in the Leasable Space and offers no less than ten (10) bicycles for rental. On-site bike rentals shall be promoted consistent with (a), (b) and (c) of subsection 2.7.2.3. Additionally, Developer shall ensure the Hotel operator makes information available to Hotel guests on bicycle rental locations within the Downtown. 2.7.2.7 Parking and Deliveries. Parking and deliveries shall be managed as described in the Parking and Deliveries Management Plan attached hereto as Exhibit “ I “. This Parking and Deliveries Management Plan may be amended from time to time as needed by the Planning Director, pursuant to specific project conditions of approval in Exhibit “D”. 2.7.2.8 Carpool Program. Developer shall provide preferential parking within the Project’s parking garage for Project employees who commute to work in employer-registered carpools. An employee who drives to work with at least one other employee in the Project or adjacent facilities may register as a carpool entitled to preferential parking within the meaning of this provision. 2.7.2.9 Rideshare Matching Service. Developer shall initiate a referral to all Project employees about a rideshare matching 1554FifthDAgmt.10013.KLK Final: November 26, 2013 20 service at least once per year to assist employees in finding carpool/vanpool opportunities (i.e., through a service such as RideMatch (www.ridematch.info)) and/or require the Hotel operator and Project tenants to participate in Metro’s CommuteSmart.info website. Rideshare matching services may be provided through the TMA contemplated in subsection 2.7.2.1, above. 2.7.2.10 Parking Pricing. Hourly parking pricing shall be market-based and adjusted periodically in an effort to ensure parking availability for Hotel guests and employees, commercial tenants and their employees and visitors during peak parking hours. If and when Developer makes any unused on-site commercial parking available for daily, weekly, or monthly lease to third parties in the surrounding area in need of parking in accordance with Section 2.7.2(j), Developer shall charge market rates. 2.7.2.11 Carshare Service. Developer shall, in the subterranean parking garage, offer for rent parking to a car sharing service for a minimum of two (2) cars and a maximum of five (5) cars, if such a service is available from a third party provider on commercially reasonable terms including the rental rate to be paid to Developer for use of the parking space(s). Required parking spaces may be used for carshare vehicles. If utilized, Developer shall propose a signage system to notify people of the location and availability of the carshare vehicles; the City Transportation Manager shall consider such request and may authorize the posting of signs within the public right-of-way to guide pedestrian and vehicular traffic to the carshare parking location. The location of parking for any carshare vehicles shall be determined by the Planning Director in consultation with the Developer, at such time as the carshare service provider has been selected. 2.7.2.12 Rental Car Availability. Developer shall ensure the Hotel operator makes information available to Hotel guests on rental car agency locations within the City. Such car rental agency information shall be made available to hotel guests upon request. 2.7.2.13 Unbundled Parking. Developer shall lease its parking to commercial tenants separately from the commercial space. If commercial tenants desire to lease parking, parking shall either be leased pursuant to a separate agreement or shown as a separate line item in the lease. Such parking shall typically be leased on a month-to-month basis at market rates established by Developer from time-to-time. Developer may, subject to the Planning Director’s approval, reconfigure the parking spaces and operations from time-to-time in order to facilitate unbundling of parking. Developer shall require in all tenant leases it executes as landlord that tenants not pay for or reimburse their employees for parking within the Project, provided, however, that Developer shall have no obligation to actively monitor for violations absent reasonable cause for doing so. 2.7.2.14 TDM Plan for Lessees. Developer shall require in any leases it executes as landlord (or management, operating or similar 1554FifthDAgmt.10013.KLK Final: November 26, 2013 21 agreement) that the Hotel and any Restaurant or Leasable Space operators must implement the TDM Plan with respect to the areas of the Property leased by Developer to the Hotel and any Restaurant or Leasable Space operators, including the annual survey described in Section 2.7.2(c)(i) above and the requirement to participate in the TMA in Section 2.7.2(c)(ii)(2.7.2.1) above. Developer understands, acknowledges and agrees that nothing herein shall be deemed to alleviate, modify, reduce, eliminate, terminate, or alter Developer’s obligation to meet the AVR standards required in this Agreement for the entire Project. 2.7.2.15 Transit Subsidies for Hotel/Leasable Space Operator Employees. 2.7.2.15.1 Developer Hotel Employees. Developer shall make available to all of its Hotel employees a Metro EZ public transit pass (or equivalent multi-agency monthly transit pass) valid every day for the first three months of the new employee’s employment (offered during the first three months of employment only) to establish on-going ridership habits. 2.7.2.15.2 Leasable Space Operator Employees. All Leasable Space Operators (if separate from the Developer’ hotel operations) employing fifty (50) or more employees shall make available to their respective employees on an on-going basis a 50% monthly subsidy for a Metro EZ public transit pass (or equivalent multi-agency monthly transit pass). All Leasable Space Operators (if operated by a third party separate from the Developer’s Hotel operations) employing less than fifty (50) employees shall make available to their respective employees on an on-going basis a Metro EZ public transit pass (or equivalent multi- agency monthly transit pass) valid every day for the first three (3) months of employment (offered during the first three (3) months of employment only) to establish on-going ridership habits. 2.7.2.16 On-Site Shower and Locker Facilities. A minimum of two (2) showers and a locker facility shall be provided for Project employees who bicycle or use another active means, powered by human propulsion, of getting to work or who exercise during the work day. 2.7.2.17 Guaranteed Return Trip. Developer shall require in all leases it executes as landlord for space within the Project that tenants provide employees who vanpool or carpool with a return trip to the point of commute origin at no additional cost to the employee, when a Personal Emergency Situation, such as personal or family illness or injury, requires it. The employee guaranteed return trip may be provided through the TMA contemplated in Section 2.7.2(c)(ii)(2.7.2.1) above. The ETC may register with Metro’s Guaranteed Ride Home program for such commuters which shall be deemed satisfaction in full of this obligation. (iii) Changes to TDM Program. Subject to approval by the City’s Planning Director, the Developer may modify this TDM program provided the 1554FifthDAgmt.10013.KLK Final: November 26, 2013 22 TDM program, as modified, can be demonstrated as equal or superior in its effectiveness at mitigating the traffic-generating effects of this Project. Any of the modifications to the TDM program proposed by Developer (or proposed by the Planning Director and agreed to by the Developer) to help the Project achieve the applicable AVR standard shall be subject to the reasonable approval by the City’s Planning Director as a Minor Modification. (iv) Annual Report. As part of the annual compliance review described in Article 10 below, Developer shall report to the City on the status of the TDM program implementation, usage and results. (v) New TDM Ordinance. If the City adopts a new ordinance of general application that updates or replaces Chapter 9.16 of the SMMC and that applies to the geographic area in which the Property is located (“New TDM Ordinance”), then, subject to the Planning Director’s approval in his or her sole and absolute discretion, Developer may elect to comply with the New TDM Ordinance in lieu of complying with the TDM Plan outlined in this Agreement. (d) Sustainable Design Features. Developer shall design the Building so that, at a minimum, the Building shall achieve LEED® “Gold” certification by the Green Building Certification Institute under the LEED® Rating System (the “Sustainable Design Status”). Developer shall confirm to the City that the design for the Building has achieved the Sustainable Design Status in accordance with the following requirements: (i) Prior to the submission of plans and documents to the City for Architectural Review Board review for the Building, the Developer shall submit for review by the City a preliminary checklist of anticipated LEED® credits along with a narrative describing the project’s sustainable features to demonstrate that the Building is likely to achieve the Sustainable Design Status. (ii) Prior to submittal of the plan check application for the Building, Developer shall: (1) Submit for review by the City an updated checklist of anticipated LEED® credits along with a narrative describing the project’s sustainable features to demonstrate that the Building is likely to achieve the Sustainable Design Status. (2) Retain the services of a third party, independent individual designated to organize, lead, and review the completion of the process of verifying and documenting that a building and all of its systems and assemblies are planned, designed, installed, and tested to meet the Building’s requirements (the “Commissioning Authority”). 1554FifthDAgmt.10013.KLK Final: November 26, 2013 23 (3) Submit a Commissioning Plan which includes the elements specified in California Code of Regulations Title 24, Part 11, Section 5.410.2.3. (iii) Prior to issuance of a final Certificate of Occupancy for the Building (but not a prerequisite to issuance of a temporary Certificate of Occupancy to allow the Building to open for business), the City shall verify (which verification shall not be unreasonably withheld, conditioned or delayed) that the Developer has submitted an application to the Green Building Certification Institute for LEED® “Gold” certification. Provided such application has been received by the Green Building Certification Institute and is being processed, the Final Certificate of Occupancy for the Building shall not be withheld or delayed based on the failure to receive certification of the Sustainable Design Status. (iv) After the City’s issuance of a final Certificate of Occupancy for the Building and after Developer has opened the Building or any portions thereof to the public, Developer shall be obligated to diligently pursue a determination from the Green Building Certification Institute on such application. (v) If the Building is ultimately denied certification for the Sustainable Design Status by the Green Building Certification Institute and the Developer has exhausted all administrative remedies and appeals of that denial, then the Developer shall be subject to a fine in the amount of four dollars per square foot of Floor Area. This fine may be waived if the City at its sole discretion determines that the Developer made a good faith effort to achieve and meet the intent of the Sustainable Design Status. Alternatively, the fine may be waived if the Developer commits to pursuing all necessary steps for the Building to achieve certification to the “Gold” level under the LEED ® Existing Buildings Operations and Maintenance (LEED EBOM) rating system no later than 3 years after the Certificate of Occupancy was issued for the Project. If the Developer fails to obtain this certification within this time period, the fine shall be reimposed and immediately payable to City. (e) Renewable Energy. In order to maximize renewable energy opportunities for this Project, solar energy systems, including photovoltaic panels, solar thermal/hot water systems, and/or other types of commercially available solar energy systems, shall be installed on the Building’s roof in areas appropriate for solar placement to achieve reasonable maximum coverage of the roof area, as confirmed by the City’s Planning Director working in consultation with the City’s Office of Sustainability. Areas of the roof available and appropriate for solar systems placement shall exclude any areas necessary or required for rooftop equipment, and any roof areas necessary for building or equipment maintenance, Fire Department access, and/or other applicable code, legally-mandated or otherwise necessary access and/or clearances. The type or types of such renewable energy systems to be installed on the Building’s roof shall be as recommended by a professional engineer trained in solar system design and installation on similar types of commercial buildings in downtown urban environments. The professional engineer shall consult with the City’s Office of Sustainability during the 1554FifthDAgmt.10013.KLK Final: November 26, 2013 24 process of evaluating and selecting the type or types of renewable energy systems for this Building. Any such solar system installations shall not be counted in the determination of the maximum height of the Building. (f) Water Conservation. Prior to issuance of building permit for the Project, the Developer shall demonstrate that the Project shall achieve a minimum 30% potable water reduction of the hotel’s total water use as reasonably determined by the City’s Office of Sustainability and the Environment. During the plan check process, Developer shall coordinate with the City’s Office of Sustainability and the Environment to evaluate appropriate measures to be implemented in achieving the requirement, including but not limited to, gallons per flush for toilets, gallons per minute for showerheads, water factor for clothes washers, commercial dishwasher requirements, and cooling tower requirements. (g) Funding For Community Benefits. Developer shall provide a monetary contribution for the following community benefits: i. Esplanade Contribution. Developer shall coordinate with the City’s Public Works Department to design and construct the Enhanced Walkway consistent with the Esplanade design. The applicant shall be responsible for any Esplanade redesign costs associated for the portion immediately adjacent to the Project site on Colorado Avenue. Furthermore, as a condition to the City’s issuance of the building permit for the Project, Developer shall pay to the City the sum of two hundred and ninety-four thousand dollars ($294,000) to be used by the City for the Colorado Esplanade public improvement project. ii. Fourth Court Alley Improvement Contribution. Developer shall pay to the City, prior to obtaining a building permit for the Project, the sum of two hundred and ten thousand dollars ($210,000) to be used by the City to implement the City’s Bike Action Plan’s physical improvements to the Fourth Court alley between Colorado Avenue and Broadway, provided that the City proceeds with such work. In the event that these improvements are not implemented by the City, this contribution shall be provided by Developer as a Parks and Recreation/Open Space contribution to be used by the City for public parks and recreation improvements. iii. Historic Preservation Contribution. Prior to obtaining a building permit for the Project, Developer shall create a separate, interest- bearing trust fund and make a contribution in the amount of seventy-five thousand dollars ($75,000). The monies available in this fund shall be used exclusively for historic preservation programs for the Downtown area in the City. These monies shall be applied for and distributed in accordance with a process, to be established by the Planning Director, whereby those entities that are exclusively devoted to historic preservation may make an application to receive distribution of some or all of the trust funds. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 25 iv. Affordable Housing Linkage Contribution. Developer shall pay to the City, prior to obtaining a building permit for the Project, the sum of twenty-one thousand dollars ($21,000) to be used by the City for affordable housing. v. HTA Contribution. Developer shall contribute to the Hospitality Training Academy (http://www.unitehere11.org/hospitality-training- academy), or a functionally equivalent organization as may be determined by the City Manager, the sum of fifty thousand dollars ($50,000) to be used specifically for job training and recruitment opportunities for disadvantaged youths targeted from the Pico Neighborhood. “Pico Neighborhood” means the area in the City of Santa Monica bounded by Santa Monica Boulevard from Lincoln Boulevard to 20th Street and Colorado Boulevard from 20th Street to Centinela Avenue on the north, Pico Boulevard on the south, Centinela Avenue and the City limits on the east and Lincoln Boulevard on the west. The first $25,000 shall be paid upon commencement of the Project’s construction; the second $25,000 shall be paid not later than ninety (90) days prior to the Hotel’s opening. The Developer shall notify the City immediately after first and second payments are provided. (h) Historic Commemorative Installation. Prior to issuance of the final Certificate of Occupancy for the Project, Developer shall install a permanent commemorative installation on the Property in a publicly accessible location of the Project that portrays one or more aspects of the past history and significance of the site as reflected in the Santa Monica Landmarks Commission files for Landmark Designation Application LC-12LM-003. In the process of designing such commemorative installation, Developer shall consult with and solicit suggestions from the Santa Monica Conservancy. Additionally, Developer shall schedule and attend at least one courtesy review hearing before the Santa Monica Landmarks Commission to invite comments and suggestions on the proposed installation. The commemorative installation shall be designed in consultation with a qualified historian, architectural historian or art historian, who will assess the content and presentation to ensure that important historic aspects of the Property are reflected in the commemorative installation. The commemorative installation is intended to be site specific rather than broadly general in its content. The commemorative installation may or may not include plaques, photos, narrative or electronic content. The Developer shall retain final design review authority over the installation. (i) EV Conduit. Developer shall in the subterranean parking garage provide both: (a) an electric vehicle charging station providing a 208/240 V 40 amp, grounded AC outlet in one parking space and (b) panel capacity and conduit stubs for future installation of electrical outlets designed to allow the simultaneous charging of a minimum number of 208/240 V 40amp, grounded AC outlets equal to at least 7 more of the parking spaces. Until the Planning Director makes a determination, based on demonstrated demand by drivers of such vehicles at the Project, that some or all of the 8 parking spaces be restricted for electric or other alternative fueled vehicle use, the spaces 1554FifthDAgmt.10013.KLK Final: November 26, 2013 26 may be utilized without regard to vehicle type at the Developer’s sole and absolute discretion. (j) Shared Parking. In furtherance of the LUCE’s shared parking policies and consistent with providing sufficient on-site parking for the Project’s users (whether with or without implementation of stacked parking) , Developer may make any unused on-site parking available for monthly lease at market rates to third parties in the surrounding area in need of parking, including area residents, businesses, and employees, (“Shared Parking”) if (i) Developer obtains a written report by a traffic and parking engineering firm that demonstrates that the proposed additional parking spaces to be leased to third parties are not needed to meet the Project’s peak parking demand, (ii) Developer submits such report to the City for review and approval, and (iii) the Planning Director approves the additional parking spaces for Shared Parking. Alternatively, Developer may make parking spaces available for Shared Parking in accordance with any SMMC procedure authorizing shared parking then in effect. In order to facilitate annual compliance monitoring of shared parking and trip reduction targets, Developer shall install ticketing equipment for on-site parking that is able to discern between on-site and off-site users in the event Developer seeks and obtains approval for Shared Parking. (k) Internship Program. On an ongoing basis, the Hotel shall make at least one paid (unless taken for school credit) internship available per school session to a student who is a Santa Monica resident between ages 18-24 and/or attends a high school in Santa Monica or Santa Monica College. The Hotel will inform the schools and the Hospitality Training Academy that such internship shall be targeted towards “opportunity youths” within Santa Monica, as may be defined from time to time by the City Manager for purposes of implementing this internship program. Subject to the requirements specified in this subsection (k), the Hotel retains full discretion to select the student for the internship. (l) “I Am Santa Monica” Workshop. Developer shall ensure that the Hotel operator and commercial tenants of the Leasable Space send representatives of their businesses to the “I Am Santa Monica” Workshop (http://www.santamonica.com/iam/) or any analogous program for businesses and their employees. (m) Community Meeting Space. Subject to availability, Developer shall make the Hotel’s meeting rooms available to non-profits or other community organizations on a reduced cost basis at least twelve (12) times per year for up to five hours per meeting. The reduced cost shall be based on fees that are required for similar City-owned facilities. Notwithstanding the foregoing, standard set up fees and standard food and beverage rates will apply. Prior to issuance of the Hotel’s final Certificate of Occupancy, but not as a requirement to open the Hotel for business, written rental facility guidelines as to community availability of the meeting room shall be prepared by the Hotel operator and submitted to the Planning Director for review and approval. Such rental facility guidelines regarding community availability may be 1554FifthDAgmt.10013.KLK Final: November 26, 2013 27 amended from time to time thereafter, subject to the Planning Director’s review and approval. (n) Bike Share Location. Developer shall allocate an outdoor area (“Bike Share Location”) of 14 feet by 12 feet in the Open Arcade as shown on the Project Plans to establish a bike share facility in conjunction with any bicycle sharing program instituted by the City or an independent operator selected by the City. Developer shall have no obligation to fund or operate any such program. Such bike share facility may be established if and when requested by the Planning Director by delivering a Notice of Intent to Proceed to Developer, which notice shall include plans and specifications of the proposed equipment and installation. The selection of the bike share operator and the installation of the bike share facility shall be subject to the approval of Developer, which approval shall not be unreasonably or untimely withheld. City shall make commercially reasonable efforts to require any operator of the bike share facility to defend, indemnify and hold harmless Developer, officers, agents, employees, and other representatives as well as Developer’s Hotel operator and tenants and their employees, officers, agents and other representatives (collectively “Developer Indemnified Parties”) from and against any and all losses, liabilities, damages, costs, expenses, claims, demands, suits, attorney’s fees and judgments (collectively referred to as “Damages”), including but not limited to claims for damage for personal injury (including death) and claims for property damage arising from the willful misconduct or active negligence of the bike share operator which occurs after Developer’s receipt of the City’s Notice of Intent to Proceed relating directly to the operation of the bike share facility on the Property except to the extent any such Damages are caused by the active negligence or willful misconduct of any Developer Indemnified Parties. Notwithstanding anything to the contrary herein, nothing in this section shall be interpreted to require the City to defend, indemnify, and hold harmless any of the Developer Indemnified Parties for any reason whatsoever. (o) Artistic Exhibition Program. Developer and/or the Hotel Operator shall develop and implement an Artistic Exhibition Program for the purpose of showcasing different forms of art in periodic exhibitions at the Hotel, including art sourced from professional galleries, local artists, and Santa Monica students. The purpose of such exhibitions shall be to establish and build a connection between the Hotel, visitors/guests and the local Santa Monica artistic community. Said Artistic Exhibition Program shall endeavor to host events at the Hotel a minimum of twice each year and showcase various forms of art (including but not limited to paintings, drawings, sculptures, photography, digital media, film, music, literature, theater, dance, performing arts and/or other recognized forms of art). 2.8 Parking. The number of marked parking spaces (including all standard- sized, compact and handicapped spaces) provided in the Project shall be at least seventy-seven (77), and may include up to forty percent (40%) compact parking spaces. This Agreement and the Project Plans set forth the exclusive off-street parking requirements for the Project and supersede all other minimum space parking requirements under the Existing Regulations, including without limitation Part 9.04.10.08 of the Zoning 1554FifthDAgmt.10013.KLK Final: November 26, 2013 28 Ordinance. In addition to the marked parking spaces, the opportunity for supplementing the parking capacity of the garage exists by parking vehicles in the aisles if the parking garage is staffed with attendant or valet parking. Provided that and to the extent that the Developer supplies the quantity of parking required under this Agreement, meaning a minimum of ninety-seven (97) parking spaces through stacked parking consistent with the peak parking demand for the site, Developer shall have no obligation to pay any parking in-lieu fees to the City. 2.9 Design. (a) Setbacks. Developer shall maintain the setbacks for the Project as shown on the Project Plans. In the event that any inconsistencies exist between the Zoning Ordinance and the setbacks established by this Agreement, then the setbacks required by this Agreement shall prevail. (b) Building Height. The maximum height of the building shall be as set forth on the Project Plans, and in no event in excess of 84 feet when calculated in accordance with the Zoning Ordinance as modified by Section 1.4 of this Agreement. In the event that any inconsistencies exist between the Zoning Ordinance and the Building Height allowed by this Agreement, then the Building Height allowed by this Agreement shall prevail. (c) Stepbacks. Developer shall maintain the stepbacks for the Project as set forth on the Project Plans. In the event that any inconsistencies exist between the Zoning Ordinance and the stepbacks required by this Agreement, then the stepbacks established by this Agreement shall prevail. (d) Permitted Projections. Projections shall be permitted as reflected on the Project Plans. In the event that any inconsistencies exist between the Zoning Ordinance and the projections permitted by this Agreement, then the projections permitted by this Agreement shall prevail. (e) Signage. The location, size, materials, and color of any signage shall be reviewed by the ARB (or the Planning Commission on appeal) in accordance with the procedures set forth in Section 6.1 of this Agreement. All signs on the Property shall be subject to Chapter 9.52 of the SMMC (Santa Monica Sign Code) in effect as of the Effective Date, a copy of which is contained within Exhibit “E”. Directional signs for vehicles shall be located at approaches to driveways as required by the City’s Strategic Transportation Planning Division. (f) Balconies. Balconies shall be provided in accordance with the Project Plans. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 29 ARTICLE 3 CONSTRUCTION 3.1 Construction Mitigation Plan. During the construction phase of the Project, Developer shall comply with the Construction Mitigation Plan attached as Exhibit “K” hereto. 3.2 Construction Hours. Developer shall be permitted to perform construction between the hours of 8:00 a.m. to 6:00 p.m. Monday through Friday, and 9:00 a.m. to 5:00 p.m. Saturday; provided that interior construction work which does not generate noise of more than thirty (30) decibels beyond the Property line may also be performed between the hours of 7:00 a.m. to 8:00 a.m. and 6:00 p.m. to 7:00 p.m. Monday through Friday, and 8:00 a.m. to 9:00 a.m. and 5:00 p.m. to 6:00 p.m. Saturday. Notwithstanding the foregoing, pursuant to SMMC Section 4.12.110(e), Developer has the right to seek a permit from the City authorizing construction activity during the times otherwise prohibited by this Section. The Parties acknowledge and agree that, among other things, afterhours construction permits can be granted for concrete pours. 3.3 Outside Building Permit Issuance Date. If Developer has not been issued a building permit for the Project by the “Outside Building Permit Issuance Date” (defined below), then on the day after the Outside Building Permit Issuance Date, without any further action by either Party, this Agreement shall automatically terminate and be of no further force or effect. For purposes of clarity, if Developer has not been issued a building permit for the Project by the Outside Building Permit Issuance Date, the City shall not be required to pursue its remedies under Section 11.4 of this Agreement, and this Agreement shall, instead, automatically terminate. “Outside Building Permit Issuance Date” means the date that is the last day of the thirty-sixth (36th) full calendar month after the Effective Date; provided that the Outside Building Permit Issuance Date may be extended by applicable Excusable Delays and otherwise in accordance with the remainder of this paragraph. If the approval by the ARB of the Project design does not occur within two (2) months of the submittal by Developer to the ARB of the Project design for any reason other than the ARB’s proper exercise of discretion to approve or disapprove the Project design, then the Outside Building Permit Issuance Date shall be extended one month for each additional month greater than two that the final ARB approval is delayed. At any time after the last day of the thirty-sixth (36th) full calendar month after the Effective Date (the “Extension Notice Date”), Developer may deliver written notice to the Planning Director, requesting an extension of the Outside Building Permit Issuance Date for an additional twelve (12) months. The Outside Building Permit Issuance Date may be administratively extended not more than two (2) times for an additional twelve (12) months per extension. The Planning Director may grant such extension if Developer can demonstrate substantial progress has been made towards obtaining a building permit and show reasonable cause why Developer will not be able to obtain the building permit for the Project by the initial Outside Building Permit Issuance Date and can demonstrate that: (a) the condition of the Property will not adversely affect 1554FifthDAgmt.10013.KLK Final: November 26, 2013 30 public health or safety and (b) the continued delay will not create any unreasonable visual or physical detriment to the neighborhood. 3.4 Construction Period. Construction of the Project shall be subject to the provisions of SMMC Section 8.08.070. 3.5 Tiebacks. Excepting any utility conflicts (which Developer may elect to remedy), Developer shall be allowed to install tiebacks, subject to standard terms and conditions as determined by the City’s Director of Public Works or designee, for Fifth Street, Colorado Avenue and Fourth Court. Developer shall compensate the City for such tiebacks in accordance with the City’s tieback fees then in effect. All tiebacks on City property shall be de-tensioned and cut down five feet below grade prior to issuance of Certificate of Occupancy. 3.6 Construction Staging. Developer may use the Fifth Street frontage and a portion of Fourth Court alley for construction staging based on City’s customary costs and procedures or permits then in effect. Developer may also use the Colorado Avenue frontage for construction staging provided that such usage, including any reasonable and feasible mitigation measures, does not materially interfere with the construction of the Exposition Light Rail. 3.7 Damage or Destruction. If the Project, or any part thereof, is damaged or destroyed during the term of this Agreement, Developer shall be entitled to reconstruct the Project in accordance with this Agreement if: (a) Developer obtains a building permit for this reconstruction prior to the expiration of this Agreement and (b) the Project is found to be consistent with the City’s General Plan, and any applicable Specific Plan. 3.8 Completed and Final Landmarks Commission Review. Demolition of the existing building(s) located on the Property shall be exempt from any further Landmarks Commission review up through the Outside Building Permit Issuance Date, including any extensions thereof. ARTICLE 4 PROJECT FEES, EXACTIONS, MITIGATION MEASURES AND CONDITIONS 4.1 Fees, Exactions, Mitigation Measures and Conditions. Except as expressly set forth in Section 2.7.2 (relating to Community Benefits), Section 4.2 (relating to modifications), and Section 5.2 (relating to Subsequent Code Changes) below, the City shall charge and impose only those fees, exactions, mitigation measures, conditions, and standards of construction set forth in this Agreement, including Exhibits “C”, “D” and “I” attached hereto, and no others. If any of the mitigation measures or conditions set forth on Exhibit “D” is satisfied by others, Developer shall be deemed to have satisfied such measures or conditions. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 31 4.2 Conditions on Modifications. The City may impose fees, exactions, mitigation measures and conditions in connection with its approval of Minor or Major Modifications, provided that all fees, exactions, mitigation measures and conditions shall be in accordance with any applicable law. 4.3 Implementation of Mitigation Measures and Conditions of Approval. 4.3.1 Compliance with Mitigation Measures and Conditions of Approval. Developer shall be responsible for implementing the mitigation measures set forth in Section A of Exhibit “D” attached hereto, and Developer shall be responsible to adhere to the conditions of approval set forth in Section B of Exhibit “D” in accordance with the timelines established in Exhibit “D”. 4.3.2 Survival of Mitigation Measures and Conditions of Approval. If Developer proceeds with the construction of the Project, except as otherwise expressly limited in this Agreement, the obligations and requirements imposed by the mitigation measures and conditions of approval set forth in the attached Exhibit “D” shall survive the expiration of the Term of this Agreement and shall remain binding on Developer, its successors and assigns, and shall continue in effect for the life of the Project. Notice of the mitigation measures and conditions of approval shall be recorded by the City separately and concurrently with this Agreement. ARTICLE 5 EFFECT OF AGREEMENT ON CITY LAWS AND REGULATIONS 5.1 Development Standards for the Property; Existing Regulations. The following development standards and restrictions set forth in this Section 5.1 govern the use and development of the Project and shall constitute the Existing Regulations, except as otherwise expressly required by this Agreement. 5.1.1 Defined Terms. The following terms shall have the meanings set forth below: (a) “Existing Regulations” collectively means all of the following which are in force and effect as of the Effective Date: (i) the General Plan (including, without limitation, the LUCE); (ii) the Zoning Ordinance except as modified herein; (iii) the IZO; (iv) any and all ordinances, rules, regulations, standards, specifications and official policies of the City governing, regulating or affecting the demolition, grading, design, development, building, construction, occupancy or use of buildings and improvements or any exactions therefore, except as amended by this Agreement; and (v) the development standards and procedures in Article 2 of this Agreement. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 32 (b) “Subsequent Code Changes” collectively means all of the following which are adopted or approved subsequent to the Effective Date, whether such adoption or approval is by the City Council, any department, division, office, board, commission or other agency of the City, by the people of the City through charter amendment, referendum, initiative or other ballot measure, or by any other method or procedure: (i) any amendments, revisions, additions or deletions to the Existing Regulations; or (ii) new codes, ordinances, rules, regulations, standards, specifications and official policies of the City governing or affecting the grading, design, development, construction, occupancy or use of buildings or improvements or any exactions therefor. “Subsequent Code Changes” includes, without limitation, any amendments, revisions or additions to the Existing Regulations imposing or requiring the payment of any fee, special assessment or tax. 5.1.2 Existing Regulations Govern the Project. Except as provided in Section 5.2, development of the Buildings and improvements that will comprise the Project, including without limitation, the development standards for the demolition, grading, design, development, construction, occupancy or use of such Buildings and improvements, and any exactions therefor, shall be governed by the Existing Regulations. The City agrees that this Agreement is consistent with the General Plan, including the LUCE, as more fully described in the Recitals. Any provisions of the Existing Regulations inconsistent with the provisions of this Agreement, to the extent of such inconsistencies and not further, are hereby deemed modified to that extent necessary to effectuate the provisions of this Agreement. The Project shall be exempt from: (a) all Discretionary Approvals or review by the City or any agency or body thereof, other than the matters of architectural review by the ARB as specified in Section 6.1 and review of modifications to the Project as expressly set forth in Sections 2.4.2 and 2.4.3; (b) the application of any subsequent local development or building moratoria, development or building rationing systems or other restrictions on development which would adversely affect the rate, timing, or phasing of construction of the Project, and (c) Subsequent Code Changes which are inconsistent with this Agreement. 5.2 Permitted Subsequent Code Changes. 5.2.1 Applicable Subsequent Code Changes. Notwithstanding the terms of Section 5.1, this Agreement shall not prevent the City from applying to the Project the following Subsequent Code Changes set forth below in this Section 5.2.1. (a) Processing fees and charges imposed by the City to cover the estimated actual costs to City of processing applications for development approvals including: (i) all application, permit, and processing fees incurred for the processing of this Agreement, any administrative approval of a Minor Modification, or any amendment of this Agreement in connection with a Major Modification; (ii) all building plan check and building inspection fees for work on the Property in effect at the time an application for a grading permit or building permit is applied for; and (iii) the public works plan check fee and public works inspection fee for public improvements constructed and installed by Developer and (iv) fees for monitoring compliance with any development 1554FifthDAgmt.10013.KLK Final: November 26, 2013 33 approvals, or any environmental impact mitigation measures; provided that such fees and charges are uniformly imposed by the City at similar stages of project development on all similar applications and for all similar monitoring. (b) General or special taxes, including, but not limited to, property taxes, sales taxes, parcel taxes, transient occupancy taxes, business taxes, which may be applied to the Property or to businesses occupying the Property; provided that (i) the tax is of general applicability City-wide and does not burden the Property disproportionately to other similar developments within the City; and (ii) the tax is not a levy, assessment, fee or tax imposed for the purpose of funding public or private improvements on other property located within the Downtown Core (as defined in the City’s General Plan as of the Effective Date). (c) Procedural regulations relating to hearing bodies, petitions, applications, notices, documentation of findings, records, manner in which hearings are conducted, reports, recommendations, initiation of appeals, and any other matters of procedure; provided such regulations are uniformly imposed by the City on all matters, do not result in any unreasonable decision-making delays and do not affect the substantive findings by the City in approving this Agreement or as otherwise established in this Agreement. (d) Regulations governing construction standards and specifications which are of general application that establish standards for the construction and installation of structures and associated improvements, including, without limitation, the City’s Building Code, Plumbing Code, Mechanical Code, Electrical Code and Fire Code; provided that such construction standards and specifications are applied on a City-wide basis and do not otherwise limit or impair the Project approvals granted in this Agreement unless adopted to meet health and safety concerns. (e) Any other City regulations to which Developer has consented in writing. (f) Collection of such fees or exactions as are imposed and set by governmental entities not controlled by City but which are required to be collected by City. (g) Regulations which do not impair the rights and approvals granted to Developer under this Agreement. For the purposes of this Section 5.2.1(g), regulations which impair Developer’s rights or approvals include, but are not limited to, regulations which (i) materially increase the cost of the Project (except as provided in Section 5.2.1(a), (b), and (d) above), or (ii) which would materially delay development of the Project or that would cause a material change in the uses of the Project as provided in this Agreement. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 34 5.2.2 New Rules and Regulations. This Agreement shall not be construed to prevent the City from applying new rules, regulations and policies in those circumstances specified in Government Code Section 65866. 5.2.3 State or Federal Laws. In the event that state or federal laws or regulations, enacted after the Effective Date, prevent or preclude compliance with one or more of the provisions of this Agreement, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such state or federal laws or regulations; provided that this Agreement shall remain in full force and effect to the extent it is not inconsistent with such laws or regulations and to the extent such laws or regulations do not render such remaining provisions impractical to enforce. 5.3 Common Set of Existing Regulations. Prior to the Effective Date, the City and Developer shall use reasonable efforts to identify, assemble and copy three identical sets of the Existing Regulations, to be retained by the City and Developer, so that if it becomes necessary in the future to refer to any of the Existing Regulations, there will be a common set of the Existing Regulations available to all Parties. 5.4 Conflicting Enactments. Except as provided in Section 5.2 above, any Subsequent Code Change which would conflict in any way with or be more restrictive than the Existing Regulations shall not be applied by the City to any part of the Property. Developer may, in its sole discretion, give the City written notice of its election to have any Subsequent Code Change applied to such portion of the Property as it may have an interest in, in which case such Subsequent Code Change shall be deemed to be an Existing Regulation insofar as that portion of the Property is concerned. If there is any conflict or inconsistency between the terms and conditions of this Agreement and the Existing Regulations, the terms and conditions of this Agreement shall control. 5.5 Timing of Development. The California Supreme Court held in Pardee Construction Co. v. City of Camarillo, 37 Cal.3d 465 (1984), that failure of the parties in that case to provide for the timing of development resulted in a later adopted initiative restricting the timing of development to prevail over the parties’ agreement. It is the intent of Developer and the City to cure that deficiency by expressly acknowledging and providing that any Subsequent Code Change that purports to limit over time the rate or timing of development or to alter the sequencing of development phases (whether adopted or imposed by the City Council or through the initiative or referendum process) shall not apply to the Property or the Project and shall not prevail over this Agreement. In particular, but without limiting any of the foregoing, no numerical restriction shall be placed by the City on the amount of total square feet or the number of buildings, structures, residential units that can be built each year on the Property except as expressly provided in this Agreement. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 35 ARTICLE 6 ARCHITECTURAL REVIEW BOARD 6.1 Architectural Review Board Approval. The Project shall be subject to review and approval or conditional approval by the ARB in accordance with design review procedures in effect under the Existing Regulations. Consistent with Existing Regulations, the ARB cannot require modifications to the building design which negates the fundamental development standards established by this Agreement. For example, the ARB cannot require reduction in the overall height of the building, reduction in the number of stories in the building, reduction in the number of hotel guest rooms, or reduction in Floor Area greater than two percent (2%). Decisions of the ARB shall be appealable to the Planning Commission in accordance with the Existing Regulations. 6.2 Expiration of ARB Approval. Notwithstanding any provision of the Existing Regulations, no ARB approval granted with respect to the Project shall expire prior to expiration of the Outside Building Permit Issuance Date, including any extensions thereof. ARTICLE 7 CITY TECHNICAL PERMITS 7.1 Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below: 7.1.1 “Technical City Permits” means any Ministerial Approvals, consents or permits from the City or any office, board, commission, department, division or agency of the City, which are necessary for the actual construction of the Project or any portion thereof in accordance with the Project Site Plan and this Agreement. Technical City Permits include, without limitation (a) building permits, (b) related mechanical, electrical, plumbing and other technical permits, (c) demolition, excavation and grading permits, (d) encroachment permits, (e) tieback and shoring permits, and (f) temporary and final certificates of occupancy. 7.1.2 “Technical Permit Applications” means any applications required to be filed by Developer for any Technical City Permits. 7.2 Diligent Action by City. 7.2.1 Upon satisfaction of the conditions set forth in Section 7.3, the City shall accept the Technical Permit Applications filed by Developer with the City and shall diligently proceed to process such Technical Permit Applications to completion. 7.2.2 Upon satisfaction of the conditions set forth in Section 7.3, the City shall diligently issue the Technical City Permits which are the subject of the Technical Permit Applications. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 36 7.3 Conditions for Diligent Action by the City. 7.3.1 Acceptance and Processing of Technical Permit Applications. The obligation of the City to accept and diligently process the Technical Permit Applications which are filed by Developer, and then issue the Technical City Permits, is subject to the satisfaction of the following conditions: (a) Developer shall have completed and filed any such Technical Permit Applications which are required under the administrative procedures and policies of the City which are in effect on the date when the Technical Permit Application is filed; provided that such procedures and policies are uniformly in force and effect throughout the City; (b) Developer shall have paid all processing and permit fees established by the City in connection with the filing and processing of any Technical Permit Application which are in effect on the date when the Technical Permit Application is filed; provided that such fees are uniformly in force and effect throughout the City; and (c) If required for the particular Technical Permit Application, Developer shall have obtained the approval of the ARB referred to in Section 6.1.1 above. 7.3.2 Issuance of a Technical City Permit. The obligation of the City to issue a Technical City Permit which is the subject of a Technical Permit Application filed by Developer is subject to the satisfaction of the following conditions (and only such conditions and no others): (a) Developer shall have complied with all of its obligations under this Agreement which are required to be performed prior to or concurrent with the issuance of the Technical City Permits for the proposed Buildings; (b) Developer shall have received any permits or approvals from other governmental agencies which are required by law to be issued prior to or concurrent with the issuance of the Technical City Permits for the proposed Buildings; (c) The proposed Buildings conform to the development standards for such Buildings established in this Agreement. In the event that a proposed Building is not in conformance with the development standards, Developer shall have the right to seek any relief from such standards under the procedures then available in the City; and (d) The proposed Buildings conform to the Administrative and Technical Construction Codes of the City (Article VIII, Chapter 1 of the Santa Monica Municipal Code) (the “Technical Codes”) in effect on the date that the Technical Permit Application is filed . 1554FifthDAgmt.10013.KLK Final: November 26, 2013 37 7.3.3 New Technical Requirements. From time to time, the City’s Technical Codes are amended to meet new technical requirements related to techniques of building and construction. If the sole means of achieving compliance for the Project with such revisions to the Technical Codes made after the Effective Date (“New Technical Requirements”) would require an increase from the allowable Building Height established in this Agreement for the Project, then the Planning Director is hereby authorized to grant Developer limited relief from the allowable Building Height without amending this Agreement if the requested relief is in compliance with the City’s General Plan. Any such approval shall be granted only after the Planning Director’s receipt of a written request for such relief from Developer. Developer is required to supply the Planning Director with written documentation of the fact that compliance with the New Technical Requirements cannot be achieved by some other method. Any such relief shall only be granted to the extent necessary in the Planning Director’s determination for Developer to comply with the New Technical Requirements. 7.4 Duration of Technical City Permits. The duration of Technical City Permits issued by the City, and any extensions of the time period during which such Technical City Permits remain valid, shall be established in accordance with the Technical Codes in effect at the time that the Technical City Permits are issued. Subject to the terms of the next sentence, the lapse or expiration of a Technical City Permit shall not preclude or impair Developer from subsequently filing another Technical Permit Application for the same matter during the Term of this Agreement, which shall be processed by the City in accordance with the provisions of this ARTICLE 7. Notwithstanding anything to the contrary in this Agreement, if Developer obtains building permits for the Project and, at any time after the Outside Construction Start Date, such building permits expire or are revoked pursuant to the applicable terms of the SMMC (as the same may be amended from time to time), then Developer may not subsequently apply for new building permits for the Project without first obtaining the prior written consent of the Planning Director, which may be granted or withheld in the Planning Director’s sole discretion. ARTICLE 8 AMENDMENT AND MODIFICATION 8.1 Amendment and Modification of Development Agreement. Subject to the notice and hearing requirements of the applicable Development Agreement Statutes, this Agreement may be modified or amended from time to time only with the written consent of Developer and the City or their successors and assigns in accordance with the provisions of the SMMC and Section 65868 of the California Government Code. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 38 ARTICLE 9 TERM 9.1 Effective Date. This Agreement shall be dated, and the obligations of the Parties hereunder shall be effective as of the date upon which the ordinance approving this Agreement becomes effective (the “Effective Date”). The Parties shall execute this Agreement within ten (10) working days of the Effective Date. 9.2 Term. 9.2.1 Term of Agreement. The term of this Agreement shall commence on the Effective Date and shall continue for twenty-five (25) years after the date on which the Hotel first opens for business (the “Term”), unless the Term is otherwise terminated pursuant to Section 11.4, after the satisfaction of all applicable public hearing and related procedural requirements or pursuant to Section 3.3. 9.2.2 Termination Certificate. Upon termination of this Agreement, the Parties hereto shall execute an appropriate certificate of termination in recordable form (a “Termination Certificate”), which shall be recorded in the official records of Los Angeles County. 9.2.3 Effect of Termination. Except as expressly provided herein (e.g., Section 4.3.2), none of the parties’ respective rights and obligations under this Agreement shall survive the Term. ARTICLE 10 PERIODIC REVIEW OF COMPLIANCE 10.1 City Review. The City shall review compliance with this Development Agreement once each year, on or before each March (each, a “Periodic Review”), in accordance with this Article 10 in order to determine whether or not Developer is out-of-compliance with any specific term or provision of this Agreement. 10.2 Evidence of Good Faith Compliance. On or before October 1st of each year, Developer shall deliver to the City a written report demonstrating that Developer has been in good faith compliance with this Agreement during the twelve (12) month period prior to the anniversary of the Effective Date. The written report shall be provided in the form established by the City. For purposes of this Agreement, the phrase “good faith compliance” shall mean the following: (a) compliance by Developer with the requirements of the Existing Regulations, except as otherwise modified by this Agreement; and (b) compliance by Developer with the terms and conditions of this Agreement, subject to the existence of any specified Excusable Delays (as defined in Section 15.8 below) which prevented or delayed the timely performance by Developer of any of its obligations under this Agreement. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 39 10.3 Information to be Provided to Developer. Prior to any public hearing concerning the Periodic Review of this Agreement, the City shall deliver to both Developer and Owner a copy of all staff reports prepared in connection with a Periodic Review, written comments from the public and, to the extent practical, all related exhibits concerning such Periodic Review. If the City delivers to Developer a Notice of Breach pursuant to Section 11.1 below, the City shall concurrently deliver to Developer and Owner copies of all staff reports prepared in connection with such Notice of Breach, all written comments from the public, and all related exhibits concerning such Notice of Breach. 10.4 Notice of Breach; Cure Rights. If during any Periodic Review, the City reasonably concludes on the basis of substantial evidence that Developer has not demonstrated that it is in good faith compliance with this Agreement, then the City may issue and deliver to Developer and Owner a written Notice of Breach pursuant to Section 11.1 below, and Developer and Owner shall have the opportunity to cure the default identified in the Notice of Breach during the cure periods and in the manner provided by Section 11.2 and Section 11.3, as applicable. 10.5 Failure of Periodic Review. The City’s failure to review at least annually compliance by Developer with the terms and conditions of this Agreement shall not constitute or be asserted by any Party as a breach by any other Party of this Agreement. 10.6 Termination of Development Agreement. If Developer or Owner fails to timely cure any item(s) of non-compliance set forth in a Notice of Breach, then the City shall have the right but not the obligation to initiate proceedings for the purpose of terminating this Agreement pursuant to Section 11.4 below. 10.7 City Cost Recovery. Following completion of each Periodic Review, Developer shall reimburse the City for its actual and reasonable costs incurred in connection with such review provided that City has provided Developer with an invoice. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 40 ARTICLE 11 DEFAULT 11.1 Notice and Cure. 11.1.1 Breach. If any Party fails to substantially to perform any term, covenant or condition of this Agreement which is required on its part to be performed (a “Breach”), the non-defaulting Party shall have those rights and remedies provided in this Agreement; provided that such non-defaulting Party has first sent a written notice of Breach (a “Notice of Breach”), in the manner required by Section 15.1, specifying the precise nature of the alleged Breach (including references to pertinent Sections of this Agreement and the Existing Regulations or Subsequent Code Changes alleged to have been breached), and the manner in which the alleged Breach may satisfactorily be cured. If the City alleges a Breach by Developer, the City shall also deliver a copy of the Notice of Breach to Owner and to any Secured Lender of Developer which has delivered a Request for Notice to the City in accordance with Article 12. The City shall accept performance by Owner of any covenant, condition, or agreement on Developer’s part to be performed hereunder with the same force and effect as though performed by Developer. 11.1.2 Monetary Breach. In the case of a monetary Breach by Developer, Developer shall promptly commence to cure the identified Breach and shall complete the cure of such Breach within thirty (30) business days after receipt by Developer of the Notice of Breach; provided that if such monetary Breach is the result of an Excusable Delay or the cure of the same is delayed as a result of an Excusable Delay, Developer shall deliver to the City reasonable evidence of the Excusable Delay. 11.1.3 Non-Monetary Breach. In the case of a non-monetary Breach by any Party, the alleged defaulting Party shall promptly commence to cure the identified Breach and shall diligently prosecute such cure to completion; provided that the defaulting Party shall complete such cure within thirty (30) days after receipt of the Notice of Breach or provide evidence of Excusable Delay that prevents or delays the completion of such cure. The thirty (30) day cure period for a non-monetary Breach shall be extended as is reasonably necessary to remedy such Breach; provided that the alleged defaulting Party commences such cure promptly after receiving the Notice of Breach and continuously and diligently pursues such remedy at all times until such Breach is cured. 11.1.4 Excusable Delay. Notwithstanding anything to the contrary contained in this Agreement, the City’s exercise of any of its rights or remedies under this Article 11 shall be subject to the provisions regarding Excusable Delay in Section 15.8 below. 11.2 Remedies for Monetary Default. If there is a Breach by Developer in the performance of any of its monetary obligations under this Agreement which remains uncured (a) thirty (30) business days after receipt by Developer and Owner of a Notice of 1554FifthDAgmt.10013.KLK Final: November 26, 2013 41 Breach from the City and (b) after expiration of Secured Lender’s Cure Period under Section 12.1 (if a Secured Lender of Developer has delivered a Request for Notice to the City in accordance with Section 12.1), then an “Event of Monetary Default” shall have occurred by Developer and the City shall have available any right or remedy provided in this Agreement, at law or in equity. All of said remedies shall be cumulative and not exclusive of one another, and the exercise of any one or more of said remedies shall not constitute a waiver or election in respect to any other available remedy. 11.3 Remedies for Non-Monetary Default. 11.3.1 Remedies of Parties. If any Party receives a Notice of Breach from the other Party regarding a non-monetary Breach, and the non-monetary Breach remains uncured: (a) after expiration of all applicable notice and cure periods, and (b) in the case of a Breach by Developer, after the expiration of Secured Lender’s Cure Period under Section 12.1 (if a Secured Lender of Developer has delivered a Request for Notice to the City in accordance with Section 12.1), then an “Event of Non-Monetary Default” shall have occurred and the non-defaulting Party shall have available any right or remedy provided in this Agreement, or provided at law or in equity except as prohibited by this Agreement. All of said remedies shall be cumulative and not exclusive of one another, and the exercise of any one or more of said remedies shall not constitute a waiver or election in respect to any other available remedy. 11.3.2 Specific Performance. The City, Owner and Developer acknowledge that monetary damages and remedies at law generally are inadequate and that specific performance is an appropriate remedy for the enforcement of this Agreement. Therefore, unless otherwise expressly provided herein, the remedy of specific performance shall be available to the non-defaulting party if the other Party causes an Event of Non-Monetary Default to occur. 11.3.3 Writ of Mandate. The City, Owner and Developer hereby stipulate that Developer shall be entitled to obtain relief in the form of a writ of mandate in accordance with Code of Civil Procedure Section 1085 or Section 1094.5, as appropriate, to remedy any Event of Non-Monetary Default by the City of its obligations and duties under this Agreement. Nothing in this Section 11.3.3, however, is intended to alter the evidentiary standard or the standard of review applicable to any action of, or approval by, the City pursuant to this Agreement or with respect to the Project. 11.3.4 No Damages Relief Against City. It is acknowledged by Developer and Owner that the City would not have entered into this Agreement if the City were to be liable in damages under or with respect to this Agreement or the application thereof. Consequently, and except for the payment of attorneys’ fees and court costs, the City shall not be liable in damages to Developer or Owner, and Developer and Owner covenant on behalf of themselves and their successors in interest not to sue for or claim any damages: (a) for any default under this Agreement; 1554FifthDAgmt.10013.KLK Final: November 26, 2013 42 (b) for the regulatory taking, impairment or restriction of any right or interest conveyed or provided hereunder or pursuant hereto; or (c) arising out of or connected with any dispute, controversy or issue regarding the application or interpretation or effect of the provisions of this Agreement. The City, Owner and Developer agree that the provisions of this Section 11.3.4 do not apply for damages which: (a) do not arise under this Agreement; (b) are not with respect to any right or interest conveyed or provided under this Agreement or pursuant to this Agreement; or (c) do not arise out of or which are not connected to any dispute, controversy, or issue regarding the application, interpretation, or effect of the provisions of this Agreement or the application of any City rules, regulations, or official policies. 11.3.5 Enforcement by the City. The City, at its discretion, shall be entitled to apply the remedies set forth in Chapters 1.09 and 1.10 of the SMMC as the same may be amended from time to time and shall follow the notice procedures of Chapter 1.09 and 1.10 respectively in lieu of Section 11.1 of this Agreement if these remedies are applied. 11.3.6 No Damages Against Developer/Owner. It is acknowledged by the City that neither Developer nor Owner would have entered into this Agreement if they were to be liable in damages in connection with any non-monetary default hereunder. Consequently, and except for the payment of attorneys’ fees and court costs, neither Developer nor Owner shall be liable in damages to the City for any nonmonetary default, and the City covenants on behalf of itself not to sue for or claim any damages: (a) for any non-monetary default hereunder; or (b) arising out of or connected with any dispute, controversy or issue regarding the application or interpretation or effect of the provisions of this Agreement. The City, Owner and Developer agree that the provisions of this Section 11.3.6 do not apply for damages which: (a) are for a monetary default; or (b) do not arise out of or which are not connected with any dispute, controversy or issue regarding the application, interpretation, or effect of the 1554FifthDAgmt.10013.KLK Final: November 26, 2013 43 provisions of this Agreement to or the application of, any City rules, regulations, or official policies. 11.3.7 No Other Limitations. Except as expressly set forth in this Section 11.3, the provisions of this Section 11.3 shall not otherwise limit any other rights, remedies, or causes of action that either the City, Owner or Developer may have at law or equity after the occurrence of any Event of Non-Monetary Default. 11.4 Modification or Termination of Agreement by City. 11.4.1 Default by Developer. If Developer causes either an Event of Monetary Default or an Event of Non-Monetary Default, then the City may commence proceedings to modify or terminate this Agreement pursuant to this Section 11.4. 11.4.2 Procedure for Modification or Termination. The procedures for modification or termination of this Agreement by the City for the grounds set forth in Section 11.4.1 are as follows: (a) The City shall provide a written notice to Developer and Owner (and to any Secured Lender of Developer which has delivered a Request for Notice to the City in accordance of Section 12.1) of its intention to modify or terminate this Agreement unless Developer or Owner (or the Secured Lender) cures or corrects the acts or omissions that constitute the basis of such determinations by the City (a “Hearing Notice”). The Hearing Notice shall be delivered by the City to Developer and Owner in accordance with Section 15.1 and shall contain the time and place of a public hearing to be held by the City Council on the determination of the City to proceed with modification or termination of this Agreement. The public hearing shall not be held earlier than: (i) thirty-one (31) days after delivery of the Hearing Notice to Developer and Owner or (ii) if a Secured Lender has delivered a Request for Notice in accordance with Section 12.1, the day following the expiration of the “Secured Lender Cure Period” (as defined in Section 12.1). (b) If, following the conclusion of the public hearing, the City Council: (i) determines that an Event of Non-Monetary Default has occurred or the Developer has not been in good faith compliance with this Agreement pursuant to Section 10.1, as applicable and (ii) further determines that neither Developer or Owner (or the Secured Lender, if applicable) has cured (within the applicable cure periods) the acts or omissions that constitute the basis of the determination under clause (i) above or if those acts or omissions could not be reasonably remedied prior to the public hearing that neither Developer or Owner (or the Secured Lender) has in good faith commenced to cure or correct such acts or omissions prior to the public hearing or is not diligently and continuously proceeding therewith to completion, then upon making such conclusions, the City Council may modify or terminate this Agreement. The City cannot unilaterally modify the provisions of this Agreement pursuant to this Section 11.4. Any such modification requires the written consent of Developer and Owner. If the City Council does not terminate this Agreement, but proposes a modification to this Agreement as a 1554FifthDAgmt.10013.KLK Final: November 26, 2013 44 result of the public hearing and Developer and Owner do not (within five (5) days of receipt) execute and deliver to the City the form of modification of this Agreement submitted to Developer by the City, then the City Council may elect to terminate this Agreement at any time after the sixth day after Developer’s and Owner’s receipt of such proposed modification. 11.5 Cessation of Rights and Obligations. If this Agreement is terminated by the City pursuant to and in accordance with Section 11.4, the rights, duties and obligations of the Parties under this Agreement shall cease as of the date of such termination, except only for those rights and obligations that expressly survive the termination of this Agreement. In such event, any and all benefits, including money received by the City prior to the date of termination, shall be retained by the City. 11.6 Completion of Improvements. Notwithstanding the provisions of Sections 11.2, 11.3, 11.4, and 11.5, if prior to termination of this Agreement, Developer has performed substantial work and incurred substantial liabilities in good faith reliance upon a building permit issued by the City, then Developer shall have acquired a vested right to complete construction of the Buildings in accordance with the terms of the building permit and occupy or use each such Building upon completion for the uses permitted for that Building as provided in this Agreement. Any Building completed or occupied pursuant to this Section 11.6 shall be considered legal non-conforming subject to all City ordinances standards and policies as they then exist governing legal non-conforming buildings and uses unless the Building otherwise complies with the property development standards for the district in which it is located and the use is otherwise permitted or conditionally permitted in the district. ARTICLE 12 MORTGAGEES 12.1 Encumbrances on the Property. This Agreement shall not prevent or limit Developer or Owner (in their sole discretion), from encumbering the Property (in any manner) or any portion thereof or any improvement thereon by any mortgage, deed of trust, assignment of rents or other security device securing financing with respect to the Property or the Developer’s ground lease (a “Mortgage”). Each mortgagee of a mortgage or a beneficiary of a deed of trust (each, a “Secured Lender”) on the Property or on Developer’s ground lease shall be entitled to the rights and privileges set forth in this Article 12. Any Secured Lender may require from the City certain interpretations of this Agreement. The City shall from time to time, upon request made by Developer or Owner, meet with Developer/Owner and representatives of each of its Secured Lenders to negotiate in good faith any Secured Lender’s request for interpretation of any part of this Agreement. The City will not unreasonably withhold, condition or delay the delivery to a Secured Lender of the City’s written response to any such requested interpretation. 12.1.1 Mortgage Not Rendered Invalid. Except as provided in Section 12.1.2, neither entering into this Agreement nor a Breach of this Agreement, 1554FifthDAgmt.10013.KLK Final: November 26, 2013 45 nor any Event of Monetary Default nor any Event of Non-Monetary Default shall defeat, render invalid, diminish, or impair the lien of any Mortgage made in good faith and for value. 12.1.2 Priority of Agreement. This Agreement shall be superior and senior to the lien of any Mortgage. Any acquisition or acceptance of title or any right or interest in or with respect to the Property or any portion thereof by a Secured Lender or its successor in interest (whether pursuant to foreclosure, trustee’s sale, deed in lieu of foreclosure, lease termination or otherwise) shall be subject to all of the terms and conditions of this Agreement. 12.1.3 Right of Secured Lender to Cure Default. (a) A Secured Lender may give notice to the City, specifying the name and address of such Secured Lender and attaching thereto a true and complete copy of the Mortgage held by such Secured Lender, specifying the portion of the Property that is encumbered by the Secured Lender’s lien (a “Request for Notice”). If the Request for Notice has been given, at the same time the City sends to Developer and Owner any Notice of Breach or Hearing Notice under this Agreement, then if such Notice of Breach or Hearing Notice affects the portion of the Property encumbered by the Secured Lender’s lien, the City shall send to such Secured Lender a copy of each such Notice of Breach and each such Hearing Notice from the City to Developer and Owner. The copy of the Notice of Breach or the Hearing Notice sent to the Secured Lender pursuant to this Section 12.1.3(a) shall be addressed to such Secured Lender at its address last furnished to the City. The period within which a Secured Lender may cure a particular Event of Monetary Default or Event of Non-Monetary Default shall not commence until the City has sent to the Secured Lender such copy of the applicable Notice of Breach or Hearing Notice. (b) After a Secured Lender has received a copy of such Notice of Breach or Hearing Notice, such Secured Lender shall thereafter have a period of time (in addition to any notice and/or cure period afforded to Developer under this Agreement) equal to: (a) ten (10) business days in the case of any Event of Monetary Default and (b) thirty (30) days in the case of any Event of Non-Monetary Default, during which period the Secured Lender may provide a remedy or cure of the applicable Event of Monetary Default or may provide a remedy or cure of the applicable Event of Non- Monetary Default; provided that if the cure of the Event of Non-Monetary Default cannot reasonably be completed within thirty days, Secured Lender may, within such 30-day period, commence to cure the same and thereafter diligently prosecute such cure to completion (a “Secured Lender’s Cure Period”). If Developer has caused an Event of Monetary Default or an Event of Non-Monetary Default, then each Secured Lender shall have the right to remedy such Event of Monetary Default or an Event of Non-Monetary Default, as applicable, or to cause the same to be remedied prior to the conclusion of the Secured Lender’s Cure Period and otherwise as herein provided. The City shall accept performance by any Secured Lender of any covenant, condition, or agreement on 1554FifthDAgmt.10013.KLK Final: November 26, 2013 46 Developer’s part to be performed hereunder with the same force and effect as though performed by Developer. (c) The period of time given to the Secured Lender to cure any Event of Monetary Default or an Event of Non-Monetary Default by Developer which reasonably requires that said Secured Lender be in possession of the Property to do so, shall be deemed extended to include the period of time reasonably required by said Secured Lender to obtain such possession (by foreclosure, the appointment of a receiver or otherwise) promptly and with due diligence; provided that during such period all other obligations of Developer under this Agreement, including, without limitation, payment of all amounts due, are being duly and promptly performed. 12.1.4 Secured Lender Not Obligated Under this Agreement. (a) No Secured Lender shall have any obligation or duty under this Agreement to perform the obligations of Developer’s or the affirmative covenants of Developer’s hereunder or to guarantee such performance unless and until such time as a Secured Lender takes possession or becomes the owner of the estate covered by its Mortgage. If the Secured Lender takes possession or becomes the owner of any portion of the Property, then from and after that date, the Secured Lender shall be obligated to comply with all provisions of this Agreement; provided that the Secured Lender shall not be responsible to the City for any unpaid monetary obligations of Developer that accrued prior to the date the Secured Lender became the fee owner of the Property or the tenant of Developer’s ground lease. (b) Nothing in Section 12.1.4(a) is intended, nor should be construed or applied, to limit or restrict in any way the City’s authority to terminate this Agreement, as against any Secured Lender as well as against Developer and Owner if any curable Event of Monetary Default or an Event of Non-Monetary Default is not completely cured within the Secured Lender’s Cure Period. ARTICLE 13 TRANSFERS AND ASSIGNMENTS 13.1 Transfers and Assignments. 13.1.1 Not Severable from Property Interests. This Agreement shall not be severable from the Property and any transfer of the Property or any portion thereof, including but not limited to Developer’s ground lease, shall automatically operate to transfer the benefits and burdens of this Agreement with respect to the transferred Property or transferred portions, as applicable. 13.1.2 Transfer Rights. Developer may freely sell, transfer, exchange, hypothecate, encumber or otherwise dispose of its interest in the Property, including its ground lease, without the consent of the City. Developer shall, however, give written notice to the other Parties, in accordance with Section 15.1, of any such transfer of a 1554FifthDAgmt.10013.KLK Final: November 26, 2013 47 Property interest, disclosing in such notice (a) the identity of the transferee of the Developer’s interest in Property (the “Developer’s Transferee”), (b) the nature of the Property interest that has been transferred, and (c) the address of the Developer’s Transferee as applicable. Similarly, Owner may freely sell, transfer, exchange, hypothecate, encumber or otherwise dispose of its interest in the Property, including its fee interest, without the consent of the City. Owner shall, however, give written notice to the other Parties, in accordance with Section 15.1, of any such transfer of a Property interest, disclosing in such notice (a) the identity of the transferee of the Property (“Property Transferee”), (b) the nature of the Property interest that has been transferred, and (c) the address of the Property Transferee as applicable. 13.2 Release Upon Transfer. Upon the sale, transfer, exchange or hypothecation of the rights and interests of Developer to the Property, Developer shall be released from its obligations under this Agreement to the extent of such sale, transfer or exchange with respect to the Property if : (a) Developer has provided written notice of such transfer to City; and (b) Developer’s Transferee executes and delivers to City a written agreement in which Developer’s Transferee expressly and unconditionally assumes all of the obligations of Developer under this Agreement with respect to Developer’s Property interest in the form of Exhibit “L” attached hereto (the “Assumption Agreement”). Upon such transfer of Developer’s Property interest and the express assumption of Developer’s obligations under this Agreement by Developer’s Transferee, the City agrees to look solely to Developer’s Transferee for compliance with the provisions of this Agreement. Any such Developer’s Transferee shall be entitled to the benefits of this Agreement as “Developer” hereunder and shall be subject to the obligations of this Agreement. Failure to deliver a written Assumption Agreement hereunder shall not affect the transfer of the benefits and burdens as provided in Section 13.1, provided that the transferor shall not be released from its obligations hereunder unless and until the executed Assumption Agreement is delivered to the City. ARTICLE 14 INDEMNITY TO CITY 14.1 Indemnity. Developer agrees to and shall defend, indemnify and hold harmless the City, its City Council, boards and commissions, officers, agents, employees, volunteers and other representatives (collectively referred to as “City Indemnified Parties”) from and against any and all loss, liability, damages, cost, expense, claims, demands, suits, attorney’s fees and judgments (collectively referred to as “Damages”), including but not limited to claims for damage for personal injury (including death) and claims for property damage arising directly or indirectly from the following: (1) for any act or omission of Developer or those of its officers, board members, agents, employees, volunteers, contractors, subcontractors or other persons acting on its behalf (collectively referred to as the “Developer Parties”) which occurs during the Term and relates to this Agreement; (2) for any act or omission related to the operations of Developer Parties, including but not limited to the maintenance and operation of areas on the Property accessible to the public. Developer’s obligation to defend, indemnify and hold harmless 1554FifthDAgmt.10013.KLK Final: November 26, 2013 48 applies to all actions and omissions of Developer Parties as described above caused or alleged to have been caused in connection with the Project or Agreement, except to the extent any Damages are caused by the active negligence or willful misconduct of any City Indemnified Parties. This Section 14.1.1 applies to all Damages suffered or alleged to have been suffered by the City Indemnified Parties regardless of whether or not the City prepared, supplied or approved plans or specifications or both for the Project. 14.2 City’s Right to Defense. The City shall have the right to approve legal counsel retained by Developer to defend any claim, action or proceeding which Developer is obligated to defend pursuant to Section 14.1.1, which approval shall not be unreasonably withheld, conditioned or delayed. If any conflict of interest results during the mutual representation of the City and Developer in defense of any such action, or if the City is reasonably dissatisfied with legal counsel retained by Developer, the City shall have the right (a) at Developer’s costs and expense, to have the City Attorney undertake and continue the City’s defense, or (b) with Developer’s approval, which shall not be reasonably withheld or delayed, to select separate outside legal counsel to undertake and continue the City’s defense. ARTICLE 15 GENERAL PROVISIONS 15.1 Notices. Formal notices, demands and communications between the Parties shall be deemed sufficiently given if delivered to the principal offices of the City or Developer, as applicable, by (i) personal service, or (ii) express mail, Federal Express, or other similar overnight mail or courier service, regularly providing proof of delivery, or (iii) registered or certified mail, postage prepaid, return receipt requested, or (iv) facsimile (provided that any notice delivered by facsimile is followed by a separate notice sent within twenty-four (24) hours after the transmission by facsimile delivered in one of the other manners specified above). Such notice shall be addressed as follows: To City: City of Santa Monica 1685 Main Street, Room 204 Santa Monica, CA 90401 Attention: City Manager Fax: (310) 917-6640 With a copy to: City of Santa Monica 1685 Main Street, Room 212 Santa Monica, CA 90401 Attn: Planning and Community Development Director Fax: (310) 458-3380 1554FifthDAgmt.10013.KLK Final: November 26, 2013 49 To Developer: Palmetto Hospitality of Santa Monica I, LLC 100 Dunbar Street, Suite 402 Spartanburg, SC 29306 Attn: General Manager Fax: (864) 596-8934 With copies to: Courtyard by Marriott 1554 Fifth Street Santa Monica, California 90401 Attn: General Manager and to: Harding Larmore Kutcher & Kozal, LLP 1250 Sixth Street, Suite 200 Santa Monica, California 90401 Attn: Kenneth L. Kutcher Fax: (310) 392-3537 To Owner: 1550 5TH STREET LLC c/o Levy Affiliated 201 Wilshire Blvd, Second Floor Santa Monica, CA 90401 Attn: Jonathan Kohn, Director of Leasing Fax: 310.393.7245 Notice given in any other manner shall be effective when received by the addressee. Any Party may change the addresses for delivery of notices to such Party by delivering notice to the other Party in accordance with this provision. 15.2 Entire Agreement; Conflicts. This Agreement represents the entire agreement of the Parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the Parties or their predecessors in interest with respect to all or any part of the subject matter hereof. Should any or all of the provisions of this Agreement be found to be in conflict with any other provision or provisions found in the Existing Regulations, then the provisions of this Agreement shall prevail. Should any of the Conditions of Approval set forth in Section B of Exhibit “D” attached hereto conflict with any of the Mitigation Measures set forth in Section A of Exhibit “D” attached hereto, the more stringent or exacting requirement shall control. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 50 15.3 Binding Effect. The Parties intend that the provisions of this Agreement shall constitute covenants which shall run with the land comprising the Property during the Term for the benefit thereof and that the burdens and benefits thereof shall bind and inure to the benefit of all successors-in-interest to the Parties hereto. Every Party who now or hereafter owns or acquires any right, title, or interest in or to any portion of the Project during the Term is and shall be conclusively deemed to have consented and agreed to every provision contained herein, to the extent relevant to said right, title or interest, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Project. 15.4 Agreement Not for Benefit of Third Parties. This Agreement is made and entered into for the sole protection and benefit of Developer and the City and their respective successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. 15.5 No Partnership or Joint Venture. Nothing in this Agreement shall be deemed to create a partnership or joint venture between the City and Developer or to render either Party liable in any manner for the debts or obligations of the other. 15.6 Estoppel Certificates. Either Party may, at any time, and from time to time, deliver written notice to the other Party requesting such Party to certify in writing (each, an “Estoppel Certificate”): (a) that this Agreement is in full force and effect, (b) that this Agreement has not been amended or modified either orally or in writing, or if so amended, identifying the amendments, (c) whether or not, to the knowledge of the responding Party, the requesting Party is in Breach or claimed Breach in the performance of its obligations under this Agreement, and, if so, describing the nature and amount of any such Breach or claimed Breach, and (d) whether or not, to the knowledge of the responding Party, any event has occurred or failed to occur which, with the passage of time or the giving of notice, or both, would constitute an Event of Monetary Default or an Event of Non-Monetary Default and, if so, specifying each such event. A Party receiving a request for an Estoppel Certificate shall execute and return such Certificate within thirty (30) days following the receipt of the request therefor. If the party receiving the request hereunder does not execute and return the certificate in such 30-day period and if circumstances are such that the Party requesting the notice requires such notice as a matter of reasonable business necessity, the Party requesting the notice may seek a second request which conspicuously states “FAILURE TO EXECUTE THE REQUESTED ESTOPPEL CERTIFICATE WITHIN FIFTEEN (15) DAYS SHALL BE DEEMED WAIVER PURSUANT TO SECTIONS 15.6 AND 15.13 OF THE DEVELOPMENT AGREEMENT” and which sets forth the business necessity for a timely response to the estoppel request. If the Party receiving the second request fails to execute the Estoppel Certificate within such 15-day period, it shall be conclusively deemed that the Agreement is in full force and effect and has not been amended or modified orally or in writing, and that there are no uncured defaults under this Agreement or any events which, with passage of time of giving of notice, of both, would constitute a default under the Agreement. The City Manager shall have the right to execute any Estoppel Certificate requested by Developer or Owner under this Agreement. The City 1554FifthDAgmt.10013.KLK Final: November 26, 2013 51 acknowledges that an Estoppel Certificate may be relied upon by any Developer’s Transferee, Property Transferee, Secured Lender or other party. 15.7 Time. Time is of the essence for each provision of this Agreement of which time is an element. 15.8 Excusable Delays. 15.8.1 In addition to any specific provisions of this Agreement, non- performance by Developer of its obligations under this Agreement shall be excused when it has been prevented or delayed in such performance by reason of any act, event or condition beyond the reasonable control of Developer (collectively, “Excusable Delays”) for any of the following reasons: (a) War, insurrection, walk-outs, riots, acts of terrorism, floods, earthquakes, fires, casualties, acts of God, or similar grounds for excused performances; (b) Governmental restrictions or moratoria imposed by the City or by other governmental entities or the enactment of conflicting State or Federal laws or regulations; (c) The imposition of injunctive relief, restraining orders, restrictions or moratoria by judicial decisions or by litigation, contesting the validity, or seeking the enforcement or clarification of, this Agreement or the Environmental Impact Report (“EIR”) related to the Project -- or the project concurrently approved by the City for the project site at 501 Colorado Avenue, Santa Monica, California -- whether instituted by Developer, the City or any other person or entity, or the filing of a lawsuit by any Party arising out of this Agreement, the EIR, the corresponding Mitigation Monitoring Program, the Project’s Statement of Overriding Considerations, or any permit or approval Developer deems necessary or desirable for the implementation of the Project; (d) The institution of a referendum pursuant to Government Code Section 65867.5 or a similar public action seeking to in any way invalidate, alter, modify or amend the ordinance adopted by the City Council approving and implementing this Agreement or the development agreement concurrently approved by the City as to the project at 501 Colorado Avenue, Santa Monica, California; (e) Inability to secure necessary labor, materials or tools, due to strikes, lockouts, or similar labor disputes; (f) Any inability of the Developer to proceed with construction of the Project due to remediation activities related to soil or ground water contamination if they must be completed prior to commencement of construction, not to exceed twelve (12) months; 1554FifthDAgmt.10013.KLK Final: November 26, 2013 52 (g) Any inability of the Developer to proceed with construction due to construction of the Exposition Light Rail line or station or the City’s Colorado Esplanade Project, not to exceed twelve (12) months; and (h) Failure of the City to timely perform its obligations hereunder, including its obligations under Section 7.2 above. 15.8.2 Under no circumstances shall the inability of Developer to secure financing be an Excusable Delay to the obligations of Developer except to the extent the inability to secure financing is directly associated with war, insurrection, walk-outs, riots, acts of terrorism, floods, earthquakes, fires, casualties, acts of God, or similar grounds beyond the control of Developer. 15.8.3 In order for an extension of time to be granted for any Excusable Delay, Developer must deliver to the City written notice of the commencement of the Excusable Delay within sixty (60) days after the date on which Developer becomes aware of the existence of the Excusable Delay. The extension of time for an Excusable Delay shall be for the actual period of the delay. 15.8.4 Nothing contained in this Section 15.8 is intended to modify the terms of either Section 5.1.2 or Section 5.5 of this Agreement. 15.9 Governing Law. This Agreement shall be governed exclusively by the provisions hereof and by the laws of the State of California. 15.10 Cooperation in Event of Legal Challenge to Agreement. If there is any court action or other proceeding commenced that includes any challenge to the validity, enforceability or any term or provision of this Agreement, then Developer shall indemnify, hold harmless, pay all costs actually incurred, and provide defense in said action or proceeding, with counsel reasonably satisfactory to both the City and Developer. The City shall cooperate with Developer in any such defense as Developer may reasonably request. 15.11 Attorneys’ Fees. If any Party commences any action for the interpretation, enforcement, termination, cancellation or rescission of this Agreement or for specific performance for the Breach of this Agreement, the prevailing Party shall be entitled to its reasonable attorneys’ fees, litigation expenses and costs. Attorneys’ fees shall include attorneys’ fees on any appeal as well as any attorneys’ fees incurred in any post-judgment proceedings to collect or enforce the judgment. Such attorneys’ fees shall be paid whether or not such action is prosecuted to judgment. In any case where this Agreement provides that the City or Developer is entitled to recover attorneys’ fees from the other, the Party so entitled to recover shall be entitled to an amount equal to the fair market value of services provided by attorneys employed by it as well as any attorneys’ fees actually paid by it to third Parties. The fair market value of the legal services for public attorneys shall be determined by utilizing the prevailing billing rates of comparable private attorneys. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 53 15.12 Recordation. The Parties shall cause this Agreement to be recorded against title to the Property in the Official Records of the County of Los Angeles. The cost, if any, of recording this Agreement shall be borne by Developer. 15.13 No Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the Party against whom enforcement of a waiver is sought and referring expressly to this Section 15.13. No delay or omission by either Party in exercising any right or power accruing upon non-compliance or failure to perform by the other Party under any of the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof, except as expressly provided herein. No waiver by either Party of any of the covenants or conditions to be performed by the other Party shall be construed or deemed a waiver of any succeeding breach or nonperformance of the same or other covenants and conditions hereof of this Agreement. 15.14 Construction of this Agreement. The Parties agree that each Party and its legal counsel have reviewed and revised this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not apply in the interpretation of this Agreement or any amendments or exhibits thereto. 15.15 Other Governmental Approvals. Developer may apply for such other permits and approvals as may be required for development of the Project in accordance with this Agreement from other governmental or quasi-governmental agencies having jurisdiction over the Property. The City shall reasonably cooperate with Developer in its endeavors to obtain such permits and approvals. 15.15.1 Further Assurances; Covenant to Sign Documents. Each Party shall take all actions and do all things, and execute, with acknowledgment or affidavit, if required, any and all documents and writings, which may be necessary or proper to achieve the purposes and objectives of this Agreement. 15.15.2 Processing. Upon satisfactory completion by Developer of all required preliminary actions and payments of appropriate processing fees, if any, the City shall, subject to all legal requirements, promptly initiate, diligently process, and complete at the earliest possible time all required steps, and expeditiously act upon any approvals and permits necessary for the development by Developer of the Project in accordance with this Agreement, including, but not limited to, the following: (a) the processing of applications for and issuing of all Discretionary Approvals requiring the exercise of judgment and deliberation by City; (b) the holding of any required public hearings; and (c) the processing of applications for and issuing of all City Technical Permits requiring the determination of conformance with the Existing Regulations. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 54 15.15.3 No Revocation. The City shall not revoke or subsequently disapprove any approval or future approval for the development of the Project or the Property once issued by the City provided that the development of the Project or the Property is in accordance with such approval. Any disapproval by the City shall state in writing the reasons for such disapproval and the suggested actions to be taken in order for approval to be granted. 15.15.4 Processing During Third Party Litigation. If any third party lawsuit is filed against the City or Developer relating to this Agreement or to other development issues affecting the Property, the City shall not delay or stop the development, processing or construction of the Property, or issuance of the City Technical Permits, unless the third party obtains a court order preventing the activity. Notwithstanding the foregoing and without prejudice to the provisions of Section 15.8(c), after service on the City or Developer of the initial petition or complaint challenging this Agreement or the Project, the Developer may apply to the Planning Director for a tolling of the applicable deadlines for Developer to otherwise comply with this Agreement. Within 40 days after receiving such an application, the Planning Director shall either toll the time period for up to five years during the pendency of the litigation or deny the requested tolling. 15.15.5 State, Federal or Case Law. Where any state, federal or case law allows the City to exercise any discretion or take any act with respect to that law, the City shall, in an expeditious and timely manner, at the earliest possible time, (i) exercise its discretion in such a way as to be consistent with, and carry out the terms of, this Agreement and (ii) take such other actions as may be necessary to carry out in good faith the terms of this Agreement. 15.16 Venue. Any legal action or proceeding among the Parties arising out of this Agreement shall be instituted in the Superior Court of the County of Los Angeles, State of California, in any other appropriate court in that County, or in the Federal District Court in the Central District of California. 15.17 Exhibits. The following exhibits which are part of this Agreement are attached hereto and each of which is incorporated herein by this reference as though set forth in full: Exhibit “A” Legal Description of the Property Exhibit “B” Project Plans Exhibit “C” Permitted Fees and Exactions Exhibit “D” Mitigation Measures and Conditions Exhibit “E” SMMC Article 9 (Planning and Zoning) Exhibit “F-1” Local Hiring Program for Construction 1554FifthDAgmt.10013.KLK Final: November 26, 2013 55 Exhibit “F-2” Local Hiring Program for Permanent Employment Exhibit “G-1” Hotel Conditions of Approval to Dispense Alcohol in Sundry Market Exhibit “G-2” Hotel Conditions of Approval to Dispense Alcohol in Common Areas Exhibit “H” Restaurant Conditions of Approval to Dispense Alcohol Exhibit “I” Parking and Deliveries Management Plan Exhibit “J” [Reserved] Exhibit “K” Construction Mitigation Plan Exhibit “L” Assignment and Assumption Agreement Except as to the Project Plans (attached hereto as Exhibit B) which shall be treated in accordance with Section 2.1 above, the text of this Agreement shall prevail in the event that any inconsistencies exist between the Exhibits and the text of this Agreement. 15.18 Counterpart Signatures. The Parties may execute this Agreement on separate signature pages which, when attached hereto, shall constitute one complete Agreement. 15.19 Certificate of Performance. Upon the completion of the Project, or any phase thereof, or upon performance of this Agreement or its earlier revocation and termination, the City shall provide Developer, upon Developer’s request, with a statement (“Certificate of Performance”) evidencing said completion, termination or revocation and the release of Developer from further obligations hereunder, except for any further obligations which survive such completion, termination or revocation. The Certificate of Performance shall be signed by the appropriate agents of Developer and the City and shall be recorded against title to the Property in the official records of Los Angeles County, California. Such Certificate of Performance is not a notice of completion as referred to in California Civil Code Section 3093. 15.20 Interests of Developer and Property Owner. Owner represents to the City that, as of the Effective Date, it is the owner of the entire Property, subject to encumbrances, easements, covenants, conditions, restrictions, and other matters of record including Developer’s ground lease. Developer represents to the City that, as of the Effective Date, it will have a legal right to a ground lease for the Property for the purpose of developing and operating this Project. 15.21 Operating Memoranda. The provisions of this Agreement require a close degree of cooperation between the City and Developer. During the Term of this Agreement, clarifications to this Agreement and the Existing Regulations may be appropriate with respect to the details of performance of the City and Developer. If and when, from time to time, during the term of this Agreement, the City and Developer agree that such clarifications are necessary or appropriate, they shall effectuate such 1554FifthDAgmt.10013.KLK Final: November 26, 2013 56 clarification through operating memoranda approved in writing by the City, Owner and Developer, which, after execution, shall be attached hereto and become part of this Agreement and the same may be further clarified from time to time as necessary with future written approval by the City, Owner and Developer. Operating memoranda are not intended to and cannot constitute an amendment to this Agreement but mere ministerial clarifications, therefore public notices and hearings shall not be required for any operating memorandum. The City Attorney shall be authorized, upon consultation with, and approval of, Developer, to determine whether a requested clarification may be effectuated pursuant to the execution and delivery of an operating memorandum or whether the requested clarification is of such character to constitute an amendment of this Agreement which requires compliance with the provisions of Section 8.1 above. The authority to enter into such operating memoranda is hereby delegated to the City Manager and the City Manager is hereby authorized to execute any operating memoranda hereunder without further action by the City Council. 15.22 Acknowledgments, Agreements and Assurance on the Part of Developer. 15.22.1 Developer’s Faithful Performance. The Parties acknowledge and agree that Developer’s faithful performance in developing the Project on the Property and in constructing and installing certain public improvements pursuant to this Agreement and complying with the Existing Regulations will fulfill substantial public needs. The City acknowledges and agrees that there is good and valuable consideration to the City resulting from Developer’s assurances and faithful performance thereof and that same is in balance with the benefits conferred by the City on the Project. The Parties further acknowledge and agree that the exchanged consideration hereunder is fair, just and reasonable. Developer acknowledges that the consideration is reasonably related to the type and extent of the impacts of the Project on the community and the Property, and further acknowledges that the consideration is necessary to mitigate the direct and indirect impacts caused by Developer on the Property. 15.22.2 Obligations to be Non-Recourse. As a material element of this Agreement, and in partial consideration for Developer’s execution of this Agreement, the Parties each understand and agree that the City’s remedies for breach of the obligations of Developer under this Agreement shall be limited as described in Sections 11.2 through 11.4 above. 15.23 Not a Public Dedication. Nothing in this Agreement shall be deemed to be a gift or dedication of the Property, or of the Project, or any portion thereof, to the general public, for the general public, or for any public use or purpose whatsoever, it being the intention and understanding of the Parties that this Agreement be strictly limited to and for the purposes herein expressed for the development of the Project as private property. Owner and/or Developer, to the extent of their respective property interests, shall have the right to prevent or prohibit the use of the Property, or the Project, or any portion thereof, including common areas and buildings and improvements located thereon, by any person for any purpose inimical to the development of the Project, including without 1554FifthDAgmt.10013.KLK Final: November 26, 2013 57 limitation to prevent any person or entity from obtaining or accruing any prescriptive or other right to use the Property or the Project. 15.24 Other Agreements. The City acknowledges that certain additional agreements may be necessary to effectuate the intent of this Agreement and facilitate development of the Project. The City Manager or his/her designee is hereby authorized to prepare, execute, and record those additional agreements. 15.25 Severability and Termination. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, or if any provision of this Agreement is superseded or rendered unenforceable according to any law which becomes effective after the Effective Date, the remainder of this Agreement shall be effective to the extent the remaining provisions are not rendered impractical to perform, taking into consideration the purposes of this Agreement. This Agreement is executed by the Parties on the date first set forth above and is made effective on and as of the Effective Date. DEVELOPER: PALMETTO HOSPITALITY OF SANTA MONICA I, LLC, a California limited liability company By: _______________________________ Name: ____________________________ Title: _____________________________ OWNER: 1550 5TH STREET LLC, a California limited liability company By: _______________________________ Name: ____________________________ Title: _____________________________ [signatures continued on next page] 1554FifthDAgmt.10013.KLK Final: November 26, 2013 58 CITY: CITY OF SANTA MONICA ATTEST: a municipal corporation ________________________ By: ________________________ SARAH P. GORMAN ROD GOULD City Clerk City Manager APPROVED AS TO FORM: ________________________ MARSHA JONES MOUTRIE City Attorney 1554FifthDAgmt.10013.KLK Final: November 26, 2013 59 EXHIBIT A LEGAL DESCRIPTION 1550 AND 1554-58 FIFTH STREET AND 417 COLORADO AVENUE REAL PROPERTY IN THE CITY OF SANTA MONICA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: LOTS J, K AND L IN BLOCK 195 OF TOWN OF SANTA MONICA IN THE CITY OF SANTA MONICA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 3, PAGES 80 AND 81 AND IN BOOK 39, PAGES 45 ET SEQ., OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. APN: 4291-025-011 1554FifthDAgmt.10013.KLK Final: November 26, 2013 60 EXHIBIT B PROJECT PLANS 1554FifthDAgmt.10013.KLK Final: November 26, 2013 61 EXHIBIT “C” PERMITTED FEES AND EXACTIONS 1. Developer shall pay the following fees and charges that are within the City’s jurisdiction and at the rate in effect at the time payments are made: (a) Upon submittal for Architectural Review Board (ARB) review, Developer shall pay City fees for processing of ARB applications; (b) Upon submittal for plan check, Developer shall pay City plan check fees; (c) Prior to issuance of construction permits, Developer shall pay the following City fees and all other standard fees imposed on similar development projects: • Building, Plumbing, Mechanical, Electrical, Grading, Seismic Mapping, Excavation and Shoring Permit fees (collected by Building & Safety) • Shoring Tieback fee (collected by EPWM) • Construction and Demolition (C&D) Waste Management fee (SMMC Section 7.60.020) (collected by EPWM) (collected by EPWM) • Wastewater Capital Facilities Fee (SMMC Section 7.04.460) (collected by EPWM) • Water Capital Facilities Fee & Water Meter Instillation fee (Water Meter Permit fee) (SMMC Section 7.12.090) (collected by EPWM) • Fireline Meter fee (SMMC Section 7.12.090) (collected by EPWM) • Childcare Linkage Fee (SMMC Section 9.72.040). Developer shall execute a contract to pay the fee prior to issuance of a building permit. Developer shall pay the fee prior to the issuance of a final certificate of occupancy for the Project. • Cultural Arts Fee (SMMC Section 9.04.10.20). Developer shall execute a contract to pay the fee prior to issuance of a building permit. Developer shall pay the fee prior to the issuance of a final certificate of occupancy for the Project. (d) Upon inspection of the Project during the course of construction, City inspection fees. These fees shall be reimbursed to Developer in accordance with the City’s standard practice should Developer not proceed with development of the Project. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 62 2. Prior to issuance of permits for any construction work in the public right-of-way, or use of public property, Developer shall pay the following City fees: • Use of Public Property Permit fees (SMMC 7.04.670) (EPWM) • Utility Excavation Permit fee (SMMC 7.04.010) (EPWM) • Street Permit fee (SMMC 7.04.790) (EPWM) 3. Developer shall reimburse the City for its ongoing actual costs to monitor the project’s compliance with this Development Agreement. The City shall bill Developer for staff time and any material used pursuant to the hourly fees in effect at the time monitoring is performed. Developer shall submit payment to the City within 30 days after receipt of an invoice for same from the City. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 63 EXHIBIT D MITIGATION MEASURES AND CONDITIONS OF APPROVAL 1554FifthDAgmt.10013.KLK Final: November 26, 2013 64 SECTION A – MITIGATION MEASURES 1. AQ-2a Air Quality Management Plan. An Air Quality Management Plan for project construction shall be prepared and approved by the City. The Plan would address air quality impacts and outline measures that would be used to reduce impacts. Measures would include: • Fugitive Dust Control. All construction shall comply with the requirements of SCAQMD Rule 403, Fugitive Dust, which requires the implementation of Reasonably Available Control Measures (RACM) for all fugitive dust sources, and the Air Quality Management Plan (AQMP), which identifies Best Available Control Measures (BACM) and Best Available Control Technologies (BACT) for area sources and point sources, respectively. • Staging Area. Construction contractors shall establish an on-site construction equipment staging area and construction worker parking lot, located on either paved surfaces or unpaved surfaces subjected to soil stabilization treatments. Control access to public roadways by limiting curb cuts/ driveways to minimize project construction impacts upon roadway traffic operations. • Non-Vehicular Equipment Engines. Construction contractors shall properly maintain non-vehicular equipment engines to minimize the volume of exhaust emissions. • Electricity. Construction contractors shall use electricity primarily from power poles, rather than temporary diesel or gasoline powered generators. • Alternative Fuel Sources. To the extent feasible, construction contractors shall use on-site mobile equipment powered by alternative fuel sources (i.e., methanol, natural gas, propane or butane). Expected use of non-alternative fuels shall be described within the Air Quality Management Plan. • Inspection of Equipment. Construction contractors shall inspect construction equipment prior to leaving the sites and wash off loose dirt with wheel washers, as necessary. • Ridesharing/ Shuttle. Construction contractors shall provide encourage ridesharing or provide shuttle service for parking by construction workers in satellite parking lots, as needed. • PM10 Reduction Measures for Grading Activities. Particulate matter reduction measures from the SCAQMD shall be applied to all grading activities occurring on the project sites throughout the construction phase. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 65 These shall include: - Apply water every 3 hours to disturbed areas within the sites; - Require minimum soil moisture of 12% for earthmoving by use of a moveable sprinkler system or a water truck; - Replace ground cover in disturbed areas as quickly as possible. If disturbed graded areas remain inactive for greater than four days, non-toxic soil stabilizers shall be applied; and - All trucks hauling dirt, sand, soil, or other loose materials shall be tarped with a fabric cover and maintain a freeboard height of 12 inches. • PM10 Reduction Measures for Haul Road Vehicle Activity. Particulate matter reduction measures from the SCAQMD shall be applied to all haul road vehicle activities occurring on the project sites throughout the construction phase. These shall include: - Limit on-site vehicle; - Install pipe-grid trackout-control device to reduce mud/ dirt trackout from exit routes; - Replace ground cover in disturbed areas as quickly as possible - if disturbed graded areas remain inactive for greater than four days, non-toxic soil stabilizers shall be applied; and - Apply chemical dust suppressant annually to unpaved parking areas. • PM10 Reduction Measures for Demolition Activity. Particulate matter reduction measures from the SCAQMD shall be applied to all demolition activities occurring on the project sites throughout the construction phase. These shall include: - Apply water every 4 hours to the area within 100 feet of a structure being demolished, to reduce vehicle trackout; - Apply water to disturbed soils after demolition is completed or at the end of each day of cleanup; - Prohibit demolition activities when wind speeds exceed 25 miles per hour; and - Apply dust suppressants (e.g. polymer emulsion) to disturbed areas upon completion of demolition. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 66 • Street Sweeping for Mud/dirt Trackout onto Local Streets. During demolition of the existing improvements on the Property and during construction of the Project, implement a street sweeping program with Rule 1186 compliant PM10 efficient vacuum units (14-day frequency). 2. MM CUL-1 Prior to demolition of the existing improvements on the Property, a Historic American Buildings Survey (HABS) Level II recordation document of the existing historic building on the project site shall be prepared. The HABS document shall be prepared by a qualified architectural historian, historic architect, or historic preservation professional who satisfies the Secretary of the Interior’s Professional Qualification Standards for History, Architectural History, or Architecture, pursuant to 36 CFR 61. This document shall include a historical narrative on the architecture and history of the building, its architect, its occupants and their activities during the time of occupancy, and shall record the existing appearance of the building in professional large format HABS photographs. In addition, any existing and available historic photographs as well as design and/ or as-built drawings shall be compiled, reproduced, and incorporated into the recordation document. The building exterior, representative interior spaces, character-defining features, as well as the property setting and contextual views shall be documented. All documentation components shall be completed in accordance with the Guidelines for Architectural and Engineering Documentation (HABS standards). Original archivally-sound copies of the report shall be submitted to the National Park Service, Library of Congress, and the Santa Monica Historical Society. Non-archival copies shall be distributed to the City of Santa Monica Planning Division, and the Santa Monica Museum of Flying. 3. MM CUL-2a If archaeological resources are encountered during implementation of the proposed projects, ground-disturbing activities shall temporarily be redirected from the vicinity of the find. The Applicant shall immediately notify a qualified archaeologist of the find and coordinate with the archaeologist as to the immediate treatment of the find until a proper site visit and evaluation is made by the archaeologist. The archaeologist shall be allowed to temporarily divert or redirect grading or excavation activities in the vicinity in order to make an evaluation of the find and determine appropriate treatment. Treatment may include implementation of archaeological data recovery excavations to remove the resource from the project area or preservation in place. The archaeologist shall prepare a final report about the find and shall be submitted by the Applicant to the lead agency, the South Central Coastal Information Center, and representatives of other appropriate or concerned agencies to signify the satisfactory completion of the project and required mitigation measures. The report shall include documentation and interpretation of the resources recovered including evaluation of the find’s eligibility for listing in the California Register of Historic Places. The landowner, in consultation with the archaeologist and the lead agency, shall designate repositories in the event that archaeological material is recovered. The archaeologist shall also determine the need for archaeological monitoring for any ground-disturbing activities thereafter. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 67 4. MM CUL-2b If human remains are encountered unexpectedly during implementation of the proposed projects, State Health and Safety Code Section 7050.5 requires that no further disturbance shall occur until the County Coroner has made the necessary findings as to origin and disposition pursuant to PRC Section 5097.98. If the remains are determined to be of Native American descent, the coroner has 24 hours to notify the Native American Heritage Commission (NAHC). The NAHC shall then identify the person(s) thought to be the Most Likely Descendent (MLD). The MLD may, with the permission of the land owner, or his or her authorized representative, inspect the site of the discovery of the Native American remains and may recommend to the owner or the person responsible for the excavation work means for treating or disposing, with appropriate dignity, the human remains and any associated grave goods. The MLD shall complete their inspection and make their recommendation within 48 hours of being granted access by the land owner to inspect the discovery. The recommendation may include the scientific removal and nondestructive analysis of human remains and items associated with Native American burials. Upon the discovery of the Native American remains, the landowner shall ensure that the immediate vicinity, according to generally accepted cultural or archaeological standards or practices, where the Native American human remains are located, is not damaged or disturbed by further development activity until the landowner has discussed and conferred, as prescribed in this mitigation measure, with the MLD regarding their recommendations, if applicable, taking into account the possibility of multiple human remains. The landowner shall discuss and confer with the descendants all reasonable options regarding the descendants’ preferences for treatment. Whenever the NAHC is unable to identify a MLD, or the MLD identified fails to make a recommendation, or the landowner or his or her authorized representative rejects the recommendation of the descendants and the mediation provided for in Subdivision (k) of Section 5097.94, if invoked, fails to provide measures acceptable to the landowner, the landowner or his or her authorized representative shall inter the human remains and items associated with Native American human remains with appropriate dignity on the property in a location not subject to further and future subsurface disturbance. 5. MM CUL-3a A qualified paleontologist shall attend a pre-grading/excavation meeting and develop a paleontological monitoring program for excavations into older Quaternary Alluvium deposits. A qualified paleontologist is defined as a paleontologist meeting the criteria established by the Society for Vertebrate Paleontology. The qualified paleontologist shall supervise a paleontological monitor who shall be present at such times as required by the paleontologist during construction excavations into native soils associated with older Quaternary Alluvium deposits. Monitoring shall consist of visually inspecting fresh exposures of rock for larger fossil remains and, where appropriate, collecting wet or dry screened sediment samples of promising horizons for smaller fossil remains. The frequency of monitoring inspections shall be determined by the paleontologist and shall be based 1554FifthDAgmt.10013.KLK Final: November 26, 2013 68 on the rate of excavation and grading activities, the materials being excavated, and the depth of excavation, and if found, the abundance and type of fossils encountered. 6. MM CUL-3b If a potential fossil is found, the paleontological monitor shall be allowed to temporarily divert or redirect grading and excavation activities in the area of the exposed fossil to facilitate evaluation and, if necessary, salvage. At the Paleontologist’s discretion and to reduce any construction delay, the grading and excavation contractor shall assist in removing rock samples for initial processing. Any fossils encountered and recovered shall be prepared to the point of identification and catalogued before they are donated to their final repository. Any fossils collected shall be donated to a public, non-profit institution with a research interest in the materials, such as the Natural History Museum of Los Angeles County. Accompanying notes, maps, and photographs shall also be filed at the repository. 7. MM CUL-3c The paleontologist shall prepare a report summarizing the results of the monitoring and salvaging efforts, the methodology used in these efforts, as well as a description of the fossils collected and their significance. The report shall be submitted by the Applicant to the lead agency, the Natural History Museum of Los Angeles County, and representatives of other appropriate or concerned agencies to signify the satisfactory completion of the proposed projects and required mitigation measures. 8. MM CUL-4 As part of ongoing planning within the Downtown, the City shall review and identify significant historic resources, including the potential boundaries and key character defining features of the potential Central Business District Historic District as well as eligible contributing structures and determine if such a District meets the criteria of the City’s Landmark and Historic Preservation Ordinance. If this potential District is found to meet ordinance criteria, the City shall consider its adoption as part of the Downtown Specific Plan process. This requirement to review and identify is solely the responsibility of the City and imposes no obligations on Developer nor does it in any way affect the demolition of the existing improvements on the Property. 9. MM GEO-1 The foundation should be designed to distribute the building loads uniformly onto the supporting subgrade. By designing a relatively stiff mat, the settlement of the structure will be relatively uniform. The foundation should be designed to be sufficiently rigid to prevent the introduction of excess stresses in the superstructure above the foundation. Concrete slab-on-grade floors should be underlain by a water vapor retarder. The water vapor retarder should consist of a vapor retarder sheeting underlain by a minimum of 3 inches of compacted, clean, gravel of 0.75 inch maximum size. The granular fill should consist of damp clean sand with at least 10 to 30 percent of the sand passing the 100 sieve. The sand should be free of clay, silt, or organic material. Concrete slabs should be reinforced with at least No. 3 reinforcing bars, places at 18 inches on center in each direction 1554FifthDAgmt.10013.KLK Final: November 26, 2013 69 within the slabs middle third. Ultimately, the foundation shall be designed in accordance with the final geotechnical report. 10. MM GEO-2a The means and methods of installation, design and implementation of the shoring system shall be the responsibility of a licensed shoring engineer and general contractor who shall satisfy the requirements of City of Santa Monica Building & Safety and Public Works officials as well as applicable codes and laws. Whenever excavation is made adjacent to existing streets, utilities and structures, there is the potential for movement. The existing structures should be inspected and documented to preclude claims for damage or settlement that are not associated with the construction of the planned development. A monitoring program should be established so excessive movement is detected early. The monitoring program should include optical surveying of the shoring and adjacent streets and buildings to detect any horizontal or vertical movement. 11. MM HAZ-2a Prior to any the issuance of a demolition permit, the contractor shall follow all applicable local, state and federal codes and regulations related to the treatment, handling, and disposal of ACM and LBP. 12. MM HAZ-2b Prior to the issuance of a demolition permit, additional subsurface sampling of soil/bedrock and groundwater shall be conducted to assess potential releases associated with the listed former land uses and the potential migration of contaminants onto the project site. The analytical suite selected shall be consistent with those uses, and shall include applicable analytical methods for appropriate waste characterization and disposal. The sampling strategy shall take into account the locations of potential source areas, and the anticipated lateral and vertical distribution of contaminants in soil and/or groundwater. The results of the investigation shall be documented in a report that is signed by a qualified environmental specialist (e.g., California Professional Geologist, a licensed Professional Engineer, or similarly qualified individual). The report shall include recommendations based upon the findings for additional investigation/remediation if contaminants are detected above applicable screening levels (e.g., excavate and dispose, groundwater and/or soil vapor extraction, or in situ bioremediation). 13. MM HAZ-2c If remediation for contaminated soils is required, all remediation activities shall be accomplished in a manner that reduces risk to below applicable standards and the need for remediation of soil shall be completed prior to or during excavation of the Building site. Closure report or other reports regarding remediation activities of contaminated soil shall be submitted to DTSC or the appropriate governmental agency for review and approval upon completion of remediation actions. If regulatory governmental agencies determine that construction of the projects would interfere with necessary remediation, construction shall be postponed as necessary to allow for adequate remediation. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 70 14. MM NOI-1a Construction Noise Management Plan. A Construction Noise Management Plan shall be prepared and approved by the City. The Plan would address noise and vibration impacts and outline measures that would be used to reduce impacts. Measures would include: • To the extent that they exceed applicable construction noise limits, excavation, foundation-laying, and conditioning activities shall be restricted to between the hours of 10:00 a.m. and 3:00 p.m., Monday through Friday, in accordance with Section 4.12.110(d) of the Santa Monica Municipal Code. • The Applicant’s construction contracts shall require implementation of the following construction best management practices (BMPs) by all construction contractors and subcontractors working in or around the project sites to reduce construction noise levels: - The Applicant and its contractors and subcontractors shall ensure that construction equipment is properly muffled according to manufactures specifications or as required by the City’s Department of Building and Safety, whichever is the more stringent. - The Applicant and its contractors and subcontractors shall place noise-generating construction equipment and locate construction staging areas away from sensitive uses, where feasible, to the satisfaction of the Department of Building and Safety. - The Applicant and its contractors and subcontractors shall implement noise attenuation measures which may include, but are not limited to, noise barriers or noise blankets to the satisfaction of the City’s Department of Building and Safety. • The Applicant’s contracts with its construction contractors and subcontractors shall include the requirement that construction staging areas, construction worker parking and the operation of earthmoving equipment within the project sites, are located as far away from vibration- and noise-sensitive sites as possible. Contract provisions incorporating the above requirements shall be included as part of the projects’ construction documents, which shall be reviewed and approved by the City. • The Applicant shall require by contract specifications that heavily loaded trucks used during construction shall be routed away from residential streets to the extent possible. Contract specifications shall be included in the proposed projects’ construction documents, which shall be reviewed by the City prior to issuance of a grading permit. • Meetings shall be coordinated with the management of neighboring buildings such as Step Up on Fifth, Luxe @ 1548, Luxe @ 1539, Silvercrest Retirement Home, and the Colorado Court Building to seek solutions to minimize 1554FifthDAgmt.10013.KLK Final: November 26, 2013 71 noise impacts. Additionally, neighboring residents would be notified of the construction schedule and upcoming high level noise events. 15. MM NOI-2a If project construction uses pile driving or vibratory techniques for foundation construction and construction of the Expo LRT has progressed to the point that infrastructure is in place that may be subject to damage from vibration, the Applicant shall install surface vibration monitors to detect vibrations that may affect future operation of the trains. The details of the placement and reporting of the vibration monitors shall be developed in coordination with the Exposition Construction Authority and Los Angeles County Metropolitan Transportation Authority. 16. MM T-1a The Applicant shall prepare, implement and maintain a Construction Impact Mitigation Plan for review and approval prior to issuance of a building permit to address manage traffic during construction and shall be designed to: • Prevent traffic impacts on the surrounding roadway network • Minimize parking impacts both to public parking and access to private parking to the greatest extent practicable • Ensure safety for both those constructing the project and the surrounding community • Prevent substantial truck traffic through residential neighborhoods The Construction Impact Mitigation Plan shall be subject to review and approval by the following City departments: Public Works, Fire, Planning and Community Development, and Police to ensure that the Plan has been designed in accordance with this mitigation measure. This review shall occur prior to issuance of grading or building permits. It shall, at a minimum, include the following: Ongoing Requirements throughout the Duration of Construction • A detailed Construction Impact Mitigation Plan for work zones shall be maintained. At a minimum, this shall include parking and travel lane configurations; warning, regulatory, guide, and directional signage; and area sidewalks, bicycle lanes, and parking lanes. The plan shall include specific information regarding the project’s construction activities that may disrupt normal pedestrian and traffic flow and the measures to address these disruptions. Such plans shall be reviewed and approved by the Strategic and Transportation Planning Division prior to commencement of construction and implemented in accordance with this approval. • Work within the public right-of-way shall be performed between 9:00 AM and 4:00 PM. This work includes dirt and demolition material hauling and construction material delivery. Work within the public right-of-way outside of these hours shall only be allowed after the issuance of an after-hours construction permit. • Streets and equipment shall be cleaned in accordance with established PW requirements. • Trucks shall only travel on a City-approved construction route. Truck 1554FifthDAgmt.10013.KLK Final: November 26, 2013 72 queuing/staging shall not be allowed on Santa Monica streets. Limited queuing may occur on the construction site itself. • An Applicant-funded on-site monitor shall be present to ensure safety when Metro workers are in the immediate vicinity, or when more dangerous activities are occurring (e.g., raising of heavy equipment to roof levels). The Plan shall identify the activities that would prompt the presence of an on-site monitor. • Materials and equipment shall be minimally visible to the public; the preferred location for materials is to be on-site, with a minimum amount of materials within a work area in the public right-of-way, subject to a current Use of Public Property Permit. • Any requests for work before or after normal construction hours within the public right-of-way shall be subject to review and approval through the After Hours Permit process administered by the Building and Safety Division. • Provision of off-street parking for construction workers, which may include the use of a remote location with shuttle transport to the site, if determined necessary by the City of Santa Monica. Project Coordination Elements That Shall Be Implemented Prior to Commencement of Construction • The Applicant shall advise the traveling public of impending construction activities (e.g., information signs, portable message signs, media listing/notification, and implementation of an approved Construction Impact Mitigation Plan). • The Applicant shall obtain a Use of Public Property Permit, Excavation Permit, Sewer Permit, or Oversize Load Permit, as well as any Caltrans permits required, for any construction work requiring encroachment into public rights-of-way, detours, or any other work within the public right-of- way. • The Applicant shall provide timely notification of construction schedules to all affected agencies (e.g., Big Blue Bus, Police Department, Fire Department, Public Works Department, and Planning and Community Development Department) and to all owners and residential and commercial tenants of property within a radius of 500 feet. • The Applicant shall coordinate construction work with affected agencies in advance of start of work. Approvals may take up to two weeks per each submittal. • The Applicant shall obtain Strategic and Transportation Planning Division approval of any haul routes for earth, concrete, or construction materials and equipment hauling. 17. MM T-2a The applicant shall prepare a Construction Impact Mitigation Plan and make its best faith efforts to coordinate with the Caltrans, City of Santa Monica, Los Angeles County Metropolitan Transportation Authority, and the Exposition Construction Authority. The final Construction Impact Mitigation Plan for the proposed hotels shall ensure that transportation mitigation measures set forth do not 1554FifthDAgmt.10013.KLK Final: November 26, 2013 73 conflict with the implementation of transportation mitigation measures associated with the Colorado Esplanade Project, Expo LRT, and 520 Colorado Avenue Affordable Housing Project. Any changes to the construction or building plans that may impact the Expo LRT railroad right-of-way shall be communicated in writing by the Applicant or their contractor to Los Angeles County Metro and the Exposition Construction Authority. SECTION B – CONDITIONS OF APPROVAL Project Specific Conditions 1. The project shall provide the Significant Project Features and LUCE Community Benefits as established in Section 2.7 of this Agreement. 2. All vehicular areas shall be monitored by hotel staff to ensure that no queuing of delivery, taxi, or passenger vehicles impede the pedestrian path of travel on the adjacent sidewalk or block travel lanes along 5th Street as a result of vehicle loading and unloading operations, or valet operations on the site. Vehicles are prohibited from reversing onto 5th Street from the driveway. 3. In conjunction with Condition No. 2, the City shall monitor the performance of Exhibit I, Parking and Deliveries Management Plan, during the first two years of the hotel’s operation. The City and Developer shall meet bi-annually during this initial two-year monitoring period to evaluate the Parking and Deliveries Management Plan. In the event of vehicle queuing impeding the pedestrian path of travel on the adjacent sidewalk or blocking travel lanes along 5th Street as a result of vehicle loading and unloading operations, or valet operations on the site, the City may impose amendments to the Parking and Deliveries Management Plan that would include operational measures or physical enhancements to help the developer achieve compliance with Condition No. 2. This may include, but is not limited to, changes in parking pricing schedule, additional signage on property, physical barriers to control traffic on site, alterations to the parking layout, and staffing changes. Amendments to the Parking and Deliveries Management Plan shall be considered a minor modification, pursuant to Development Agreement Section 2.4.2, subject to Planning Director approval. After the initial two years, the City shall monitor the performance of the Parking and Deliveries Management Plan annually as a part of the Development Agreement’s Annual Compliance Report. Furthermore, the City may continue to amend the Parking and Deliveries Management Plan on an ongoing basis 1554FifthDAgmt.10013.KLK Final: November 26, 2013 74 throughout the year if queuing occurs impeding the pedestrian path of travel on the adjacent sidewalk or blocking travel lanes along 5th Street as a result of vehicle loading and unloading operations, or valet operations on the site, to ensure compliance with Condition No. 2. 4. Deliveries along the Fourth Court Alley, in conjunction with the hotel use or the leasable space located on the ground floor, shall occur only between the hours of 10am-2pm daily. The City shall monitor the performance of the Fourth Court deliveries biannually for the first two years of the hotel operation to ensure that the deliveries do not unreasonably impede pedestrians, cyclists, or vehicular circulation on Fourth Court between Colorado Avenue (Esplanade) and Broadway, in light of the importance of this connection between the future Expo station and the rest of the Downtown area. At its discretion, the City may impose a change in delivery hours, and shall be considered a minor modification (whether more restrictive or less restrictive), pursuant to Development Agreement Section 2.4.2, subject to Planning Director approval. In no event shall the City impose delivery restrictions that make it infeasible to operate the businesses in the Project. 5. To best accommodate peak parking demand generated by the hotel and to ensure compliance with Condition No. 2, valet or attendant parking service shall be provided between 6pm-9am daily. Furthermore, an increase in the size of a possible ground floor Restaurant as depicted on the plans, as allowed per the DA, may warrant additional valet/attendant parking service hours, including valet or parking attendant service during all hours, as may be determined by the Planning Director. In order to confirm actual peak parking demand, the developer shall prepare and submit a parking occupancy study biannually for the first two years of hotel operation. The study shall include hourly count data from two Thursdays and two Saturdays between the hours of 6 am and midnight. The days selected for study will be approved by the City in advance and the study data will be submitted to the City no less than four (4) weeks in advance of a biannual status meeting to be established for the first two (2) years of hotel operation and for the first two (2) years of the commencement of any Restaurant operations in the Leasable Space. The requirement for valet/parking attendant operations may be revisited, reduced and/or eliminated in concert with the City based on the results of a parking occupancy study. Valet/attendant parking service hours may be amended, pursuant to Development Agreement Section 2.4.2, subject to Planning Director approval. CITY PLANNING Administrative Conditions 6. In the event Developer violates or fails to comply with any conditions of approval of this permit, no further permits, licenses, approvals or certificates of occupancy shall be issued until such violation has been fully remedied. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 75 Conformance with Approved Plans 7. This approval is for those plans dated 11/1/13, a copy of which is attached to the Development Agreement as Exhibit B. Project development shall be consistent with such plans, except as otherwise specified in these conditions of approval. 8. Minor amendments to the plans shall be subject to approval by the Director of Planning. A significant change in the approved concept shall be subject to review as provided in the Development Agreement. Construction shall be in conformance with the plans submitted or as modified in accordance with the Development Agreement. Notwithstanding the foregoing, hotel room configurations, circulation, back of house operations, guest amenities and lobby configuration may be amended from time to time in the sole and absolute discretion of the developer or hotel operator. 9. Except as otherwise provided by the Development Agreement, project plans shall be subject to complete Code Compliance review when the building plans are submitted for plan check and shall comply with all applicable provisions of Article IX of the Municipal Code and all other pertinent ordinances and General Plan policies of the City of Santa Monica prior to building permit issuance. Project Operations 10. The operation of the project shall at all times be conducted in a manner not detrimental to surrounding properties or residents by reason of lights, noise, activities, parking or other actions. 11. The project shall at all times comply with the provisions of the Noise Ordinance (SMMC Chapter 4.12). Final Design 12. Subject to Architecture Review Board review and approval, in the event the bike connection between the future light rail station and the Broadway bike lanes is approved and implemented, the southwest corner of the building and the 4th Court alley building elevation should highlight, and provide building-integrated wayfinding for, the adjacent 4th Court bike connection between the Station and Broadway bike lanes, through use of architectural and/or graphic design elements and/or fixtures on the building’s western elevation; any such signage shall not count towards the maximum allowable signage limitation for the Project. Features may include a bike-oriented façade treatment, bike-oriented signage or graphics, bike-oriented lighting, bike-themed public art, etc. The design of the alley façade at the lower levels should celebrate the adjacent bike connection by including a strong integrated design element. 13. Plans for final design, landscaping, screening, trash enclosures, and signage in the new project shall be subject to review and approval by the Architectural Review 1554FifthDAgmt.10013.KLK Final: November 26, 2013 76 Board. Given the prominent location of the two hotels, the Architecture Review Board shall pay particular attention to ensure exceptional design on all four sides of the building, resulting in the best possible design. Also in its project review, the Architectural Review Board shall pay particular attention to the quality of building materials, the design of the Fourth Court elevation, enhancements to the ground floor storefront of the leasable space in efforts to increase the amount of outdoor seating/dining areas and/or ways to improve the connection between the interior and outdoor seating/dining areas associated with a Restaurant, and the extent of glazing along the ground floor frontage on Fifth Street. 14. The Architecture Review Board, in its review of the project, shall pay particular attention to the proposed placement of the building columns under the Open Arcade area at the street corner, and determine whether a minor reduction of up to one column and or relocation of the columns would be appropriate to ensure there is adequate space for pedestrian circulation, and adequate space for the proposed bike share/short-term bike parking. 15. Landscaping plans in the new project shall comply with Subchapter 9.04.10.04 (Landscaping Standards) of the Zoning Ordinance including use of water- conserving landscaping materials, landscape maintenance and other standards contained in the Subchapter. 16. Refuse areas, storage areas and mechanical equipment in the new project shall be screened in accordance with SMMC Section 9.04.10.02.130, 140, and 150. Refuse areas in the new project shall be of a size adequate to meet on-site need, including recycling. The Architectural Review Board in its review shall pay particular attention to the screening of such areas and equipment. Any rooftop mechanical equipment in the new project shall be minimized in height and area, and shall be located in such a way as to minimize noise and visual impacts to surrounding properties. Unless otherwise approved by the Architectural Review Board, rooftop mechanical equipment in the new project shall be located at least five feet from the edge of the roof. 17. No gas or electric meters for the new project shall be located within the required front or street side yard setback areas. The Architectural Review Board in its review shall pay particular attention to the location and screening of such meters. 18. Prior to consideration of the project by the Architectural Review Board, the applicant shall review disabled access requirements with the Building and Safety Division and make any necessary changes in the project design to achieve compliance with such requirements. The Architectural Review Board, in its review, shall pay particular attention to the aesthetic, landscaping, and setback impacts of any ramps or other features necessitated by accessibility requirements. 19. As appropriate, the Architectural Review Board shall require the use of anti-graffiti materials on surfaces likely to attract graffiti. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 77 Construction Plan Requirements 20. Final building plans submitted for approval of a building permit shall include on the plans a list of all permanent mechanical equipment to be placed indoors which may be heard outdoors. Demolition Requirements 21. Until such time as the demolition is undertaken, and unless the structure is currently in use, the existing structure shall be maintained and secured by boarding up all openings, erecting a security fence, and removing all debris, bushes and planting that inhibit the easy surveillance of the property to the satisfaction of the Building and Safety Officer and the Fire Department. Any landscaping material remaining shall be watered and maintained until demolition occurs. 22. Prior to issuance of a demolition permit, applicant shall prepare for Building Division approval a rodent and pest control plan to insure that demolition and construction activities at the site do not create pest control impacts on the project neighborhood. Standard Conditions 23. Mechanical equipment in the new project shall not be located on the side of the building, unless otherwise permitted by applicable regulations. Roof locations may be used when the mechanical equipment is installed within a sound-rated parapet enclosure. 24. Final approval of any mechanical equipment installation will require a noise test in compliance with SMMC Section 4.12.040. Equipment for the test shall be provided by the owner or contractor and the test shall be conducted by the owner or contractor. A copy of the noise test results on mechanical equipment shall be submitted to the Community Noise Officer for review to ensure that noise levels do not exceed maximum allowable levels for the applicable noise zone. 25. The Developer shall insure any graffiti on the site is promptly removed through compliance with the City’s graffiti removal program. Condition Monitoring 26. Upon commencement of the project’s construction, the applicant authorizes reasonable City inspections of the property to ensure compliance with the conditions of approval imposed by the City in approving this project and will bear the reasonable cost of these inspections. STRATEGIC AND TRANSPORTATION PLANNING 1554FifthDAgmt.10013.KLK Final: November 26, 2013 78 27. Final auto parking, bicycle parking and loading layouts specifications in the new project shall be subject to the review and approval of the Strategic and Transportation Planning Division: http://www.smgov.net/uploadedFiles/Departments/Transportation/Transportation_Management/ParkingStandards.pdf 28. As to the new project, where a driveway, garage, parking space or loading zone intersects with the public right-of-way at the alley or sidewalk, on-site hazardous visual obstruction triangles shall be provided in accordance with SMMC Section 9.04.10.02.090. Please reference the following standards: http://www.smgov.net/uploadedFiles/Departments/Transportation/Tra nsportation_Management/HVO.pdf 29. Slopes of all driveways and ramps used for ingress or egress of parking facilities shall be designed in accordance with the standards established by the Strategic and Transportation Planning Manager but shall not exceed a twenty percent slope. Please reference the following standards: http://www.smgov.net/uploadedFiles/Departments/Transportation/Transportation _Management/RampSlope.pdf BIG BLUE BUS 30. For the life of the project, the Developer shall notify all tenants in writing as part of their lease or rental agreement that the City envisions a network of transit services in the Downtown area that may result in public transit services operating on any street in the Downtown area, both on streets currently used by transit or through expansion of service to streets not currently utilized by transit. In addition, new bus stops or bus layover zones may be established on these streets for regular use by either the Big Blue Bus or other fixed route or specialized transit operators. On-street parking may be removed at any time to create a bus zone in an appropriate location for safe vehicular movement and passenger safety regardless of business or residential adjacency. Developer, or Developer’s successor in interest, shall be responsible for ensuring this obligation is satisfied. 31. For the life of the project, the Developer shall notify all tenants in writing as part of their lease or rental agreement that they are located within 1000 feet of a facility used 24 hours per day, 365/6 days per year for the operation and maintenance of the City’s transit and other vehicle fleets and such adjacency may subject them to the continuous sounds associated with operating and maintaining a large fleet of vehicles on a daily basis. The sounds of engines, radios, machinery, equipment, alarms, voices, compression tanks/tools, fueling and washing activities are some but not all of the sounds that might be heard on a 24 hour daily basis. Developer, or Developer’s successor in interest, shall be responsible for ensuring this obligation is satisfied. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 79 32. Structures that include spaces specifically intended for seniors and/or persons with disabilities should include an appropriate space for the boarding and alighting of this population into specialty vehicles in a safe location such that the stopped vehicle will not interfere with traffic flow. PUBLIC LANDSCAPE 33. During construction, street trees immediately adjacent to the project site shall be maintained, relocated or provided as required in a manner consistent with the City’s Urban Forest Master Plan, per the specifications of the Public Landscape Division of the Community & Cultural Services Department and the City’s Tree Code (SMMC Chapter 7.40). No street trees shall be removed without the approval of the Public Landscape Division. 34. Prior to the issuance of a demolition permit all street trees that are adjacent to or will be impacted by the demolition or construction access shall have tree protection zones established in accordance with the Urban Forest Master Plan. All tree protection zones shall remain in place until demolition and/or construction has been completed. 35. During construction, replace or plant new street trees immediately adjacent to the project site in accordance with the Urban Forest Master Plan and in consultation with the City Arborist OFFICE OF SUSTAINABILITY AND THE ENVIRONMENT 36. Developer shall enroll the new project in the Savings By Design incentive program if and where available through Southern California Edison prior to submittal of plans for Architectural Review. Developer shall execute an incentive agreement with Southern California Edison prior to the issuance of a building permit. 37. The project shall comply with requirements in section 8.106 of the Santa Monica Municipal code, which adopts by reference the California Green Building Standards Code and which adds local amendments to that Code. In addition, the project shall meet the landscape water conservation and construction and demolition waste diversion requirements specified in Section 8.108 of the Santa Monica Municipal Code. PUBLIC WORKS General Conditions 38. Any work or use of the public right-of-way including any proposed encroachments of on-site improvements into the public right-of-way will require a permit from the Public Works Department (PWD) - Administrative Services Division. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 80 39. Plans and specifications for all offsite improvements shall be prepared by a Registered Civil Engineer licensed in the State of California for approval by the City Engineer prior to issuance of a building permit. 40. Immediately after demolition and during construction, a security fence, the height of which shall be the maximum permitted by the Zoning Ordinance, shall be maintained around the perimeter of the lot. The lot shall be kept clear of all trash, weeds, etc. 41. Until the completion of construction, a sign shall be posted on the property in a manner consistent with the public hearing sign requirements, which shall identify the address and phone number of the owner, developer and contractor for the purposes of responding to questions and complaints during the construction period. Said sign shall also indicate the hours of permissible construction work. 42. Prior to the demolition of any existing structure, the applicant shall submit a report from an industrial hygienist to be reviewed and approved as to content and form by the Building & Safety Division. The report shall consist of a hazardous materials survey for the structure proposed for demolition. The report shall include a section on asbestos and in accordance with the South Coast AQMD Rule 1403, the asbestos survey shall be performed by a state Certified Asbestos Consultant (CAC). The report shall include a section on lead, which shall be performed by a state Certified Lead Inspector/Assessor. Additional hazardous materials to be considered by the industrial hygienist shall include: mercury (in thermostats, switches, fluorescent light), polychlorinated biphenyls (PCBs) (including light Ballast), and fuels, pesticides, and batteries. Water Resources 43. New connections to the sewer or storm drains require a sewer permit from the PWD - Civil Engineering Division. New connections to storm drains owned by Los Angeles County require a permit from the L.A. County Department of Public Works. 44. Upon completion of construction, parking areas and structures and other facilities generating wastewater with potential oil and grease content are required to pretreat the wastewater before discharging to the City storm drain or sewer system. Pretreatment will require that a clarifier or oil/water separator be installed and maintained on site. 45. If the project involves dewatering, developer/contractor shall contact the LA Regional Water Quality Control Board (RWQCB) to obtain an NPDES Permit for discharge of groundwater from construction dewatering to surface water. For more information refer to: http://www.waterboards.ca.gov/losangeles/ and search for Order # R4-2003-0111. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 81 46. If required by City Engineering Division to accommodate any increased sewer demand, prior to the issuance of the first building permit and to the extent such a study is needed, the applicant shall submit a sewer study that shows that the City’s sewer system can accommodate the entire development. Developer shall be responsible to upgrade any downstream deficiencies, to the satisfaction of the Water Resources Manager, if calculations show that the project will cause such mains to receive greater demand than currently being experienced and than can be accommodated. Improvement plans shall be submitted to the Engineering Division. All reports and plans shall also be approved by the Water Resources Engineer. 47. If required by City Engineering Division to accommodate any increased water demand, prior to the issuance of the first building permit and to the extent such a study is needed, the applicant shall submit a water study that shows that the City’s water system can accommodate the entire development for fire flows and all potable needs. Developer shall be responsible to upgrade any water flow/pressure deficiencies, to the satisfaction of the Water Resources Manager, if calculations show that the project will cause such mains to receive greater demand than currently being experienced and than can be accommodated. Improvement plans shall be submitted to the Engineering Division. All reports and plans shall also be approved by the Water Resources Engineer. 48. If required by City Engineering Division to accommodate any increased storm water drainage demand, prior to the issuance of the first building permit and to the extent such a study is needed, the applicant shall submit a hydrology study of all drainage to and from the site to demonstrate adequacy of the existing storm drain system for the entire development. Developer shall be responsible to upgrade any system deficiencies, to the satisfaction of City Engineer, if calculations show that the project will cause such facilities to receive greater demand than currently being experienced and than can be accommodated. All reports and improvement plans shall be submitted to Engineering Division for review and approval. The study shall be performed by a Registered Civil Engineer licensed in the State of California. 49. Absent City approval, developer shall not directly connect to a public storm drain pipe or direct site drainage to the public alley. 50. Prior to and in conjunction with demolition of existing structures, all existing sanitary sewer “house connections” to be abandoned, shall be removed and capped at the “Y” connections. 51. The fire services and domestic services 3-inches or greater must be above ground, on the applicant’s site, readily accessible for testing. 52. Developer is required to meet state cross-connection and potable water sanitation guidelines. Refer to requirements and comply with the cross-connections 1554FifthDAgmt.10013.KLK Final: November 26, 2013 82 guidelines available at: http://www.lapublichealth.org/eh/progs/encirp/ehcross.htm. Prior to issuance of a Certificate of Occupancy, a cross-connection inspection shall be completed. 53. All new restaurants and cooking facilities at the site are required to install Gravity Grease Interceptors to pretreat wastewater containing grease. The minimum capacity of the interceptor shall be determined by using table 10-3 of the 2007 Uniform Plumbing Code, Section 1014.3. All units shall be fitted with a standard final-stage sample box. The 2007 Uniform Plumbing Code guideline in sizing Gravity Grease Interceptors is intended as a minimum requirement and may be increased at the discretion of PWD, Water Resources Protection Program. 54. Plumbing fixtures that meet the standards for 20% water use reduction specified in the California Green Building Standards Code are required on all new development and remodeling where plumbing is to be added. Urban Water Runoff Mitigation 55. To mitigate storm water and surface runoff from the project site, an Urban Runoff Mitigation Plan shall be required by the PWD during plan check pursuant to Municipal Code Chapter 7.10. Prior to submittal of landscape plans for Architectural Review Board approval, the applicant shall contact PWD to determine applicable requirements, such as: a. The site must comply with SMMC Chapter 7.10 Urban Runoff Pollution Ordinance for the construction phase and post construction activities; b. Non-stormwater runoff, sediment and construction waste from the construction site and parking areas is prohibited from leaving the site; c. Any sediments or materials which are tracked off-site must be removed the same day they are tracked off-site; d. Excavated soil must be located on the site and soil piles should be covered and otherwise protected so that sediments are not tracked into the street or adjoining properties; e. No runoff from the construction site shall be allowed to leave the site; and f. Drainage control measures shall be required depending on the extent of grading and topography of the site. g. Development sites that result in land disturbance of one acre or more are required by the State Water Resources Control Board (SWRCB) to submit a Storm Water Pollution Prevention Plan (SWPPP). Effective September 2, 2011, only individuals who have been certified by the Board as a 1554FifthDAgmt.10013.KLK Final: November 26, 2013 83 “Qualified SWPPP Developer” are qualified to develop and/or revise SWPPPs. A copy of the SWPPP shall also be submitted to the PWD. 56. Prior to implementing any temporary construction dewatering or permanent groundwater seepage pumping, a permit is required from the City Water Resources Protection Program (WRPP). Please contact the WRPP for permit requirements at least two weeks in advance of planned dewatering or seepage pumping. They can be reached at (310) 458-8235. Public Streets & Right-of-Way 57. Prior to the issuance of a final Certificate of Occupancy for the Project, all required offsite improvements, such as AC pavement rehabilitation, replacement of sidewalk, curbs and gutters, installation of street trees, lighting, etc. shall be designed and installed to the satisfaction of the Public Works Department and Public Landscape Division. 58. Unless otherwise approved by the PWD, all sidewalks shall be kept clear and passable during the grading and construction phase of the project. 59. Upon completion of the project, sidewalks, curbs, gutters, paving and driveways located immediately adjacent to the Project Site which need replacing or removal as a result of the project or needed improvement prior to the project, as determined by the PWD shall be reconstructed to the satisfaction of the PWD. Design, materials and workmanship shall match the adjacent elements. This is especially true for areas within the City that have architectural concrete, pavers, tree wells, art elements, special landscaping, etc. 60. Upon completion of the project, alley sections immediately adjacent to the Project Site shall be replaced as determined by the PWD. This typically requires full reconstruction of the alley in accordance with City of Santa Monica standards for the full adjacent length of the property. Utilities 61. Prior to issuance of an Excavation Permit, a Telecommunications Investigation shall be initiated by the City of Santa Monica Information Systems Department. The telecommunications investigation shall provide a list of recommendations to be considered for incorporation into the project design including, but not limited to measures associated with joint trench opportunities, location of tie-back and other underground installations, telecommunications conduit size and specifications, fiber optic cable specifications, telecommunications vault size and placement and specifications, interior riser conduit and fiber optic cable, and adjacent public right of way enhancements. Developer shall install two Telecommunications Vaults in either the street, alley and/or sidewalk locations dedicated solely for City of Santa Monica use. Developer shall provide two 1554FifthDAgmt.10013.KLK Final: November 26, 2013 84 unique, telecommunication conduit routes and fiber optic cables from building Telecommunications Room to Telecommunications Vaults in street, alley and/or sidewalk. Developer will be responsible for paying for the connection of each Telecommunications Vault to the existing City of Santa Monica fiber optic network, or the extension of conduit and fiber optic cable for a maximum of 1km terminating in a new Telecommunications Vault for future interconnection with City network. The final telecommunications design plans for the project site shall be submitted to and approved by the City of Santa Monica Information Systems Department prior to approval of project. a. Project shall comply with City of Santa Monica Right-of-Way Management Ordinance No. 2129CCS, Section 3 (part), adopted 7/13/04. 62. Prior to submitting plans for plan check and as part of the plan check approval process, Developer shall make arrangements with all affected utility companies and indicate points of connection for all services on the site plan drawing. During the course of constructing the project, Developer shall pay for undergrounding of all overhead utilities, if any, within and along the development frontages. Existing and proposed overhead utilities, if any, may need to be relocated underground while the new project is under construction. 63. Location of Southern California Edison electrical transformer and switch equipment/structures must be clearly shown of the development site plan and other appropriate plans within the project limits. The SCE structures serving the proposed development shall not be located in the public right-of-way. Resource Recovery and Recycling 64. Development plans must show the refuse and recycling (RR) areas dimensions to demonstrate adequate and easily accessible areas. If the RR areas are completely enclosed, then lighting, ventilation and floor drain connected to sewer will be required. Section 9.04.10.02.151 of the SMMC has dimensional requirements for various sizes and types of projects. Developments that place the RR area in subterranean garages must also provide a bin staging area on their property for the bins to be placed for collection. 65. Contact Resource Recovery and Recycling RRR division to obtain dimensions of the refuse recycling enclosure. 66. Prior to issuance of a building permit for the project, developer shall submit a waste management plan, a map of the enclosure and staging areas with dimensions and a recycling plan to the RRR Division for its approval. All commercial businesses generating 4 cubic yards of trash per week in the new project must have a recycling program in place for its employees and clients/customers. Show compliance with these requirements on the building plans. Project architect should visit the Resource Recovery and Recycling (RRR) 1554FifthDAgmt.10013.KLK Final: November 26, 2013 85 website or contact the RRR Division for requirements of the Waste Management Plan and to obtain the minimum dimensions of the refuse recycling enclosure. The recycling plan shall include: a. List of materials such as white paper, computer paper, metal cans, and glass to be recycled; b. Location of recycling bins; c. Designated recycling coordinator; d. Nature and extent of internal and external pick-up service; e. Pick-up schedule; and f. Plan to inform tenants/ occupants of service. Miscellaneous 67. For temporary excavation and shoring that includes tiebacks into the public right- of-way, a Tieback Agreement, prepared by the City Attorney, will be required. FIRE General Requirements The following comments are to be included on plans if applicable. Requirements are based on the California Fire Code (CFC), the Santa Monica Municipal Code (SMMC) and the California Building Code (CBC). California Fire Code/ Santa Monica Fire Department Requirements 68. A “Knox” key storage box shall be provided for ALL new construction. For buildings, other than high-rise, a minimum of 3 complete sets of keys shall be provided. Keys shall be provided for all exterior entry doors, fire protection equipment control equipment rooms, mechanical and electrical rooms, elevator controls and equipment spaces, etc. For high-rise buildings, 6 complete sets are required. 69. Santa Monica Municipal Code Chapter 8 section 8.44.050 requires an approved automatic fire sprinkler system in ALL new construction and certain remodels or additions. Any building that does not have a designated occupant and use at the time fire sprinkler plans are submitted for approval, the system shall be designed and installed to deliver a minimum density of not less than that required for ordinary hazard, Group 2, with a minimum design area of not less than three 1554FifthDAgmt.10013.KLK Final: November 26, 2013 86 thousand square feet. Plans and specifications for fire sprinkler systems shall be submitted and approved prior to system installation. 70. Buildings four or more stories in height shall be provided with not less than one standpipe during construction. 71. The standpipe(s) shall be installed before the progress of construction is more than 35- feet above grade. Two-and-one-half-inch valve hose connections shall be provided at approved, accessible locations adjacent to useable stairs. Temporary standpipes shall be capable of delivering a minimum demand of 500 gpm at 100-psi residual pressure. Pumping equipment shall be capable of providing the required pressure and volume. 72. Provide Multipurpose Dry Chemical type fire extinguishers with a minimum rating of 2A-10B:C. Extinguishers shall be located on every floor or level. Maximum travel distance from any point in space or building shall not exceed 75 feet. Extinguishers shall be mounted on wall or installed in cabinet no higher than 4 ft. above finished floor and plainly visible and readily accessible or signage shall be provided. 73. An automatic fire extinguishing system complying with UL 300 shall be provided to protect commercial-type cooking or heating equipment that produces grease- laden vapors. A separate plan submittal is required for the installation of the system and shall be in accordance with UFC Article 10, NFPA 17A and NFPA 96. Provide a Class “K” type portable fire extinguisher within 30 feet the kitchen appliances emitting grease-laden vapors. 74. Every building and/or business suite is required to post address numbers that are visible from the street and alley. Address numbers shall be a minimum of six (6) inches in height and contrast with their background. Suite or room numbers shall be a minimum of four (4) inches in height and contrast with their background. Santa Monica Municipal Code Chapter 8 Section 8.48.130 (l) (1) 75. When more than one exit is required they shall be arranged so that it is possible to go in either direction to a separate exit, except deadends not exceeding 20 feet, and 50 feet in fully sprinklered buildings. 76. Exit and directional signs shall be installed at every required exit doorway, intersection of corridors, exit stairways and at other such locations and intervals as necessary to clearly indicate the direction of egress. This occupancy/use requires the installation of approved floor level exit pathway marking. Exit doors shall be openable from the inside without the use of a key, special effort or knowledge. 77. Show ALL door hardware intended for installation on Exit doors. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 87 78. In buildings two stories or more in height an approved floor plan providing emergency procedure information shall be posted at the entrance to each stairway, in every elevator lobby, and immediately inside all entrances to the building. The information shall be posted so that it describes the represented floor and can be easily seen upon entering the floor level or the building. Required information shall meet the minimum standards established in the Santa Monica Fire Department, Fire Prevention Division, information sheet entitled “Evacuation Floor Plan Signs.” (California Code of Regulations Title 19 Section 3.09) 79. Stairway Identification shall be in compliance with CBC 1022.8 80. Floor-level exit signs are required in Group A, E, I, R-1, R-2 and R-4 occupancies. 81. In buildings two stories in height at least one elevator shall conform to the California Building Code Chapter 30 section 3003.5a for General Stretcher Requirements for medical emergency use. a. The elevator entrance shall not be less than 42 inches wide by 72 inches high. b. The elevator car shall have a minimum clear distance between walls excluding return panels of not less than 80 inches by 54 inches. c. Medical emergency elevators shall be identified by the international symbol (star of life) for emergency elevator use. The symbol shall be not less than 3-inches in size. 82. Storage, dispensing or use of any flammable or combustible liquids, flammable compressed gases or other hazardous materials shall comply with the Uniform Fire Code. The Santa Monica Fire Department prior to any materials being stored or used on site shall approve the storage and use of any hazardous materials. Complete and submit a “Consolidated Permit Application Package.” Copies may be obtained by calling (310) 458-8915. 83. Alarm-initiating devices, alarm-notification devices and other fire alarm system components shall be designed and installed in accordance with the appropriate standards of Chapter 35 of the Building Code, and the National Fire Alarm Code NFPA 72. The fire alarm system shall include visual notification appliances for warning the hearing impaired. Approved visual appliances shall be installed in ALL rooms except private (individual) offices, closets, etc. 84. An approved fire alarm system shall be installed as follows: 85. Group A Occupancies with an occupant load of 1,000 or more shall be provided with a manual fire alarm system and an approved prerecorded message 1554FifthDAgmt.10013.KLK Final: November 26, 2013 88 announcement using an approved voice communication system. Emergency power shall be provided for the voice communication system. 86. Group E Occupancies having occupant loads of 50 or more shall be provided with an approved manual fire alarm system. 87. Group R-1, R-2 Apartment houses containing 16 or more dwelling units, in building three or more stories in height R-2.1 and R-4 Occupancies shall be provided with a manual alarm system. Smoke detectors shall be provided in all common areas and interior corridors of required exits. Recreational, laundry, furnace rooms and similar areas shall be provided with heat detectors. 88. Plans and specifications for fire alarm systems shall be submitted and approved prior to system installation 89. Nothing contained in the Development Agreement for this Project or these Conditions of Approval shall prevent Developer from seeking relief pursuant to any Application for Alternative Materials and Methods of Design and Construction or any other relief as otherwise may be permitted and available under the Building Code, Fire Code or any other provision of the SMMC. 90. California Building Code / Santa Monica Fire Department Requirements Occupancy Classification and Division • If a change in occupancy or use, identify the existing and all proposed new occupancy classifications and uses • Assembly (A-1, A-2, A-3), Business (B), Mercantile (M), Residential (R), etc. • Include all accessory uses Building Height • Height in feet (SMMC defines a High-Rise as any structure greater than 55 feet.) • Number of stories • Detail increase in allowable height • Type I (II-FR.) buildings housing Group B office or Group R, Division 1 Occupancies each having floors used for human occupancy located more than 55 feet above the lowest level of fire department vehicle access shall comply with CBC Section 403. a. Automatic sprinkler system. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 89 b. Smoke-detection systems. c. Smoke control system conforming to Chapter 9 section 909. d. Fire alarm and communication systems. 1. Emergency voice alarm signaling system. 2. Fire department communication system. e. Central control station. (96 square feet minimum with a minimum dimension of 8’ ft.) f. {omitted} g. Elevators. h. Standby power and light and emergency systems. i. Exits j. Seismic consideration. Total Floor Area of Building or Project • Basic Allowable Floor Area • Floor Area for each room or area • Detail allowable area increase calculations Corridor Construction • Type of Construction • Detail any and all code exceptions being used Occupant Load Calculations • Occupancy Classification for each room or area. • Occupant Load Calculation for each room or area based on use or occupancy • Total Proposed Occupant Load 1554FifthDAgmt.10013.KLK Final: November 26, 2013 90 Means of Egress • Exit width calculations • Exit path of travel • Exit Signage and Pathway Illumination (low level exit signage) Atria - Atria shall comply with CBC Section 404 as follows: • Atria shall not be permitted in buildings containing Group H Occupancies. • The entire building shall be sprinklered. • A mechanically operated smoke-control system meeting the requirements of Section 909 and 909.9 shall be installed. • Smoke detectors shall be installed in accordance with the Fire Code. • Except for open exit balconies within the atrium, the atrium shall be separated from adjacent spaces by one-hour fire-resistive construction. See exceptions to Section 404.6. • When a required exit enters the atrium space, the travel distance from the doorway of the tenant space to an enclosed stairway, horizontal exit, exterior door or exit passageway shall not exceed 200 feet. • In other than jails, prisons and reformatories, sleeping rooms of Group I Occupancies shall not have required exits through the atrium. • Standby power shall be provided for the atrium and tenant space smoke- control system. Sections 404.7 and 909.11. • The interior finish for walls and ceilings of the atrium and all unseparated tenant spaces shall be Class I. Section 404.8. Atriums of a height greater than 20 feet, measured from the ceiling sprinklers, shall only contain furnishings and decorative materials with potential heat of combustion less than 9,000 Btu’s per pound. All furnishings to comply with California Bureau of Home Furnishings, Technical Bulletin 133, “Flammability Test for Seating Furniture in Public Occupancies.” All furnishings in public areas shall comply with California Bureau of Home Furnishings, Technical Bulletin 133, “Flammability Test for Seating Furniture in Public Occupancies.” 1554FifthDAgmt.10013.KLK Final: November 26, 2013 91 Los Angeles County Fire 91. Fire Flow Requirements I. INTRODUCTION A. Purpose: To provide Department standards for fire flow, hydrant spacing and specifications. B. Scope: Informational to the general public and instructional to all individuals, companies, or corporations involved in the subdivision of land, construction of buildings, or alterations and/or installation of fire protection water systems and hydrants. C. Author: The Deputy Chief of the Prevention Services Bureau through the Assistant Fire Chief (Fire Marshal) of the Fire Prevention Division is responsible for the origin and maintenance of this regulation. D. Definitions: 1. GPM – gallons per minute 2. psi – pounds per square inch 3. Detached condominiums – single detached dwelling units on land owned in common 4. Multiple family dwellings – three or more dwelling units attached II. RESPONSIBILITY A. Land Development Unit 1. The Department’s Land Development Unit shall review all subdivisions of land and apply fire flow and hydrant spacing requirements in accordance with this regulation and the present zoning of the subdivision or allowed land use as approved by the County’s Regional Planning Commission or city planning department. B. Fire Prevention Engineering Section 1. The Department’s Fire Prevention Engineering Section shall review building plans and apply fire flow and hydrant spacing requirements in accordance with this regulation. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 92 III. POLICY A. The procedures, standards, and policies contained herein are provided to ensure the adequacy of, and access to, fire protection water and shall be enforced by all Department personnel. IV. PROCEDURES A. Land development: fire flow, duration of flow, and hydrant spacing The following requirements apply to land development issues such as: tract and parcel maps, conditional use permits, zone changes, lot line adjustments, planned unit developments, etc. 1. Multiple family dwellings, hotels, high rise, commercial, industrial, etc. a. Due to the undetermined building designs for new land development projects (undeveloped land), the required fire flow shall be: 5,000 GPM 5 hrs. 300 ft. NOTE: REDUCTION IN FIRE FLOW IN ACCORDANCE WITH TABLE 1. b. Land development projects consisting of lots having existing structures shall be in compliance with Table 1 (fire flow per building size). This standard applies to multiple family dwellings, hotels, high rise, commercial, industrial, etc. NOTE: FIRE FLOWS PRECEDING ARE MEASURED AT 20 POUNDS PER SQUARE INCH RESIDUAL PRESSURE. B. Building plans The Department’s Fire Prevention Engineering Section shall review building plans and apply fire flow requirements and hydrant spacing in accordance with the following: Multiple residential, apartments, single family residences (greater than 5,000 square feet), private schools, hotels, high rise, commercial, industrial, etc. (R-1, E, B, A, I, H, F, M, S) (see Table 1). C. Public fire hydrant requirements 1. Fire hydrants shall be required at intersections and along access ways as spacing requirements dictate 2. Spacing 1554FifthDAgmt.10013.KLK Final: November 26, 2013 93 a. All occupancies Other than single family dwellings, such as commercial, industrial, multi-family dwellings, private schools, institutions, detached condominiums (five or more units), etc. Fire hydrant spacing shall be 300 feet. NOTE: The following guidelines shall be used in meeting the hydrant spacing requirements. (1) No portion of lot frontage shall be more than 200 feet via vehicular access from a public hydrant. (2) No portion of a building should exceed 400 feet via vehicular access from a properly spaced public hydrant. b. Supplemental fire protection When a structure cannot meet the required public hydrant spacing distances, supplemental fire protection shall be required. NOTE: Supplemental fire protection is not limited to the installation of on-site fire hydrants; it may include automatic extinguishing systems. 3. Hydrant location requirements - both sides of a street Hydrants shall be required on both sides of the street whenever: a. Streets having raised median center dividers that make access to hydrants difficult, causes time delay, and/or creates undue hazard. b. For situations other than those listed in “a” above, the Department’s inspector’s judgment shall be used. The following items shall be considered when determining hydrant locations: (1) Excessive traffic loads, major arterial route, in which traffic would be difficult to detour. (2) Lack of adjacent parallel public streets in which traffic could be redirected (e.g., Pacific Coast Highway). (3) Past practices in the area. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 94 (4) Possibility of future development in the area. (5) Type of development (i.e., flag-lot units, large apartment or condo complex, etc.). (6) Accessibility to existing hydrants (7) Possibility of the existing street having a raised median center divider in the near future. D. On-Site Hydrant Requirements 1. When any portion of a proposed structure exceeds (via vehicular access) the allowable distances from a public hydrant and on-site hydrants are required, the following spacing requirements shall be met: a. Spacing distance between on-site hydrants shall be 300 to 600 feet. (1) Design features shall assist in allowing distance modifications. b. Factors considered when allowing distance modifications. (1) Only sprinklered buildings qualify for the maximum spacing of 600 feet. (2) For non-sprinklered buildings, consideration should be given to fire protection, access doors, outside storage, etc. Distance between hydrants should not exceed 400 feet. 2. Fire flow a. All on-site fire hydrants shall flow a minimum of 1,250 gallons per minute at 20 psi for a duration of two hours. If more than one on- site fire hydrant is required, the on-site fire flow shall be at least 2,500 gallons per minute at 20 psi, flowing from two hydrants simultaneously. On site flow may be greater depending upon the size of the structure and the distance from public hydrants. NOTE: ONE OF THE TWO HYDRANTS TESTED SHALL BE THE FARTHEST FROM THE PUBLIC WATER SOURCE. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 95 3. Distance from structures All on-site hydrants shall be installed a minimum of 25 feet from a structure or protected by a two-hour firewall. 4. Shut-off valves All on-site hydrants shall be equipped with a shut-off (gate) valve, which shall be located as follows: a. Minimum distance to the hydrant 10 feet. b. Maximum distance from the hydrant 25 feet 5. Inspection of new installations All new on-site hydrants and underground installations are subject to inspection of the following items by a representative of the Department: a. Piping materials and the bracing and support thereof. b. A hydrostatic test of 200 psi for two hours. c. Adequate flushing of the installation. d. Flow test to satisfy required fire flow. (1) Hydrants shall be painted with two coats of red primer and one coat of red paint, with the exception of the stem and threads, prior to flow test and acceptance of the system. 6. Maintenance It shall be the responsibility of the property management company, the homeowners association, or the Developer to maintain on-site hydrants. a. Hydrants shall be painted with two coats of red primer and one coat of red, with the exception of the stem and threads, prior to flow test and acceptance of the system. b. No barricades, walls, fences, landscaping, etc., shall be installed or planted within three feet of a fire hydrant. E. Public Hydrant Flow Procedure The minimum acceptable flow from any existing public hydrant shall be 1,000 GPM unless the required fire flow is less. Hydrants used to satisfy fire flow requirements will be determined by the following items: 1554FifthDAgmt.10013.KLK Final: November 26, 2013 96 1. Only hydrants that meet spacing requirements are acceptable for meeting fire flow requirements. 2. In order to meet the required fire flow: a. Flow closest hydrant and calculate to determine flow at 20 pounds per square inch residual pressure. If the calculated flow does not meet the fire flow requirement, the next closest hydrant shall be flowed simultaneously with the first hydrant, providing it meets the spacing requirement, etc. b. If more than one hydrant is to be flowed in order to meet the required fire flow, the number of hydrants shall be flowed as follows: One hydrant 1,250 GPM and below Two hydrants 1,251– 3,500 GPM flowing simultaneously Three hydrants 3,501– 5,000 GPM flowing simultaneously F. Hydrant Upgrade Policy 1. Existing single outlet 2 1/2” inch hydrants shall be upgraded to a double outlet 6” x 4” x 2 1/2” hydrant when the required fire flow exceeds 1,250 GPM. 2. An upgrade of the fire hydrant will not be required if the required fire flow is between the minimum requirement of 750 gallons per minute, up to and including 1,250 gallons per minute, and the existing public water system will provide the required fire flow through an existing wharf fire hydrant. 3. All new required fire hydrant installations shall be approved 6” x 4” x 2 1/2” fire hydrants. 4. When water main improvements are required to meet GPM flow, and the existing water main has single outlet 2 1/2” fire hydrant(s), then a hydrant(s) upgrade will be required. This upgrade shall apply regardless of flow requirements. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 97 5. The owner-developer shall be responsible for making the necessary arrangements with the local water purveyor for the installation of all public facilities. 6. Approved fire hydrant barricades shall be installed if curbs are not provided (see Figures 1, 2, and 3 following on pages 11 and 12). G. Hydrant Specifications All required public and on-site fire hydrants shall be installed to the following specifications prior to flow test and acceptance of the system. 1. Hydrants shall be: a. Installed so that the center line of the lowest outlet is between 14 and 24 inches above finished grade b. Installed so that the front of the riser is between 12 and 24 inches behind the curb face c. Installed with outlets facing the curb at a 45-degree angle to the curb line if there are double outlet hydrants d. Similar to the type of construction which conforms to current A.W.W.A. Standards e. Provided with three-foot unobstructed clearance on all sides. f. Provided with approved plastic caps g. Painted with two coats of red primer and one coat of traffic signal yellow for public hydrants and one coat of red for on- site hydrants, with the exception of the stems and threads 2. Underground shut-off valves are to be located: a. A minimum distance of 10 feet from the hydrant b. A maximum distance of 25 feet from the hydrant Exception: Location can be less than 10 feet when the water main is already installed and the 10-foot minimum distance cannot be satisfied. 3. All new water mains, laterals, gate valves, buries, and riser shall be a minimum of six inches inside diameter. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 98 4. When sidewalks are contiguous with a curb and are five feet wide or less, fire hydrants shall be placed immediately behind the sidewalk. Under no circumstances shall hydrants be more than six feet from a curb line. 5. The owner-developer shall be responsible for making the necessary arrangements with the local water purveyor for the installation of all public facilities. 6. Approved fire hydrant barricades shall be installed if curbs are not provided (see Figures 1, 2, and 3 following on pages 11 and 12). Barricade/Clearance Details Figure 1 1554FifthDAgmt.10013.KLK Final: November 26, 2013 99 Figure 2 Figure 3 Notes: 1. Constructed of steel not less than four inches in diameter, six inches if heavy truck traffic is anticipated, schedule 40 steel and concrete filled. 2. Posts shall be set not less than three feet deep in a concrete footing of not less than 15 inches in diameter, with the top of the posts not less than three feet above ground and not less than three feet from the hydrant 1554FifthDAgmt.10013.KLK Final: November 26, 2013 100 3. Posts, fences, vehicles, growth, trash storage and other materials or things shall not be placed or kept near fire hydrants in a manner that would prevent fire hydrants from being immediately discernable. 4. If hydrant is to be barricaded, no barricade shall be constructed in front of the hydrant outlets (Figure 2, shaded area). 5. The exact location of barricades may be changed by the field inspector during a field inspection. 6. The steel pipe above ground shall be painted a minimum of two field coats of primer. 7. Two finish coats of “traffic signal yellow” shall be used for fire hydrant barricades. 8. Figure 3 shows hydrant hook up during fireground operations. Notice apparatus (hydra-assist-valve) connected to hydrant and the required area. Figure 3 shows the importance of not constructing barricades or other obstructions in front of hydrant outlets. H. Blue reflective hydrant markers replacement policy 1. Purpose: To provide information regarding the replacement of blue reflective hydrant markers, following street construction or repair work. a. Fire station personnel shall inform Department of Public Works Road Construction Inspectors of the importance of the blue reflective hydrant markers, and encourage them to enforce their Department permit requirement, that streets and roads be returned to their original condition, following construction or repair work. b. When street construction or repair work occurs within this Department’s jurisdiction, the nearest Department of Public Works Permit Office shall be contacted. The location can be found by searching for the jurisdiction office in the “County of Los Angeles Telephone Directory” under “Department of Public Works Road Maintenance Division.” The importance of the blue reflective hydrant markers should be explained, and the requirement encouraged that the street be returned to its original condition, by replacing the hydrant markers. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 101 TABLE 1 * BUILDING SIZE (First floor area) Fire Flow *(1) (2) Duration Hydrant Spacing Under 3,000 3,000 to 4,999 5,000 to 7,999 sq. ft. sq. ft. sq. ft. sq. ft. sq. ft. 1,000 GPM 1,250 GPM 1,500 GPM 2 hrs. 2 hrs. 2 hrs. 300 ft. 300 ft. 300 ft. 15,000 to 19,999 20,000 to 24,999 25,000 to 29,999 sq. ft. sq. ft. sq. ft. sq. ft. sq. ft. 3,000 GPM 3,500 GPM 4,000 GPM 3 hrs. 3 hrs. 4 hrs. 300 ft. 300 ft. 300 ft. * See applicable footnotes below: (FIRE FLOWS MEASURED AT 20 POUNDS PER SQUARE INCH RESIDUAL PRESSURE) (1) Conditions requiring additional fire flow. a. Each story above ground level - add 500 GPM per story. b. Any exposure within 50 feet - add a total of 500 GPM. c. Any high-rise building (as determined by the jurisdictional building code) the fire flow shall be a minimum of 3,500 GPM for 3 hours at 20 psi. d. Any flow may be increased up to 1,000 GPM for a hazardous occupancy. (2) Reductions in fire flow shall be cumulative for type of construction and a fully sprinklered building. The following allowances and/or additions may be made to standard fire flow requirements: 1554FifthDAgmt.10013.KLK Final: November 26, 2013 102 a. A 25% reduction shall be granted for the following types of construction: Type I-F.R, Type II-F.R., Type II one-hour, Type II-N, Type III one-hour, Type III-N, Type IV, Type IV one hour, and Type V one-hour. This reduction shall be automatic and credited on all projects using these types of construction. Credit will not be given for Type V-N structures (to a minimum of 2,000 GPM available fire flow). b. A 25% reduction shall be granted for fully sprinklered buildings (to a minimum of 2,000 GPM available fire flow). c. When determining required fire flows for structures that total 70,000 square feet or greater, such flows shall not be reduced below 3,500 GPM at 20 psi for three hours. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 103 EXHIBIT E SMMC ARTICLE 9 (PLANNING AND ZONING) 1554FifthDAgmt.10013.KLK Final: November 26, 2013 104 EXHIBIT F-1 LOCAL HIRING PROGRAM FOR CONSTRUCTION Local Hiring Policy For Construction. Developer shall implement a local hiring policy (the “Local Hiring Policy”) for construction of the Project, consistent with the following guidelines: 1. Purpose. The purpose of the Local Hiring Policy is to facilitate the employment by Developer and its contractors at the Project of residents of the City of Santa Monica (the “Targeted Job Applicants”), and in particular, those residents who are “Low-Income Individuals” (defined below). 2. Findings. a. Approximately 73,000-74,000 individuals work in the City. The City has a resident labor force of approximately 56,800. However, only about one-third (32.2 percent) of the City’s resident labor force works at jobs located in the City, with the balance working outside of the City. Consequently, a significant portion of the City’s resident and non-resident work force is required to commute long distances to find work, causing increased traffic on state highways, increased pollution, increased use of gas and other fuels and other serious environmental impacts. b. Due to their employment outside of the City, many residents of the City are forced to leave for work very early in the morning and return late in the evening, often leaving children and teenagers alone and unsupervised during the hours between school and the parent return from work outside the area. c. Absentee parents and unsupervised youth can result in increased problems for families, communities and the City as a whole, including, but not limited to, increased crime, more frequent and serious injuries, poor homework accomplishments, failing grades and increased high school dropout rates. d. Of the approximately 45,000 households in the City, thirty percent are defined as low-income households or lower, with eleven percent of these households defined as extremely low income and eight percent very low income. Approximately 10.5% of the City’s residents are unemployed. e. By ensuring that Targeted Job Applicants are aware of and have a fair opportunity to compete for Project jobs, this local hiring policy will facilitate job opportunities to City residents which would expand the 1554FifthDAgmt.10013.KLK Final: November 26, 2013 105 City’s employment base and reduce the impacts on the environment caused by long commuting times to jobs outside the area. 3. Definitions. a. “Contract” means a contract or other agreement for the providing of any combination of labor, materials, supplies, and equipment to the construction of the Project that will result in On-Site Jobs, directly or indirectly, either pursuant to the terms of such contract or other agreement or through one or more subcontracts. b. “Contractor” means a prime contractor, a sub-contractor, or any other entity that enters into a Contract with Developer for any portion or component of the work necessary to construct the Project (excluding architectural, design and other “soft” components of the construction of the Project). c. “Low Income Individual” means a resident of the City of Santa Monica whose household income is no greater than 80% of the Median Income. d. “Median Income” means the median income for the Los Angeles-Long Beach Primary Metropolitan Statistical Area, as published from time to time by the City in connection with its Affordable Housing Production Program pursuant to SMMC Section 9.56. e. “On-Site Jobs” means all jobs by a Contractor under a Contract for which at least fifty percent (50%) of the work hours for such job requires the employee to be at the Project site, regardless of whether such job is in the nature of an employee or an independent contractor. On-Site Jobs shall not include jobs at the Project site which will be performed by the Contractor’s established work crew who have not been hired specifically to work at the Project site. 4. Priority for Targeted Job Applicants. Subject to Section 7 below in this Exhibit ”F-1,” the Local Hiring Policy provides that the Targeted Job Applicants shall be considered for each On-Site Job in the following order of priority: a. First Priority: Any resident of a household with no greater than 80% Median Income that resides within the Low and Moderate Income Areas indicated on the map attached to this Exhibit F-1; b. Second Priority: Any resident of a household with no greater than 80% Median Income that resides within the City; and c. Third Priority: Any resident of a household with no greater than 80% Median Income that resides within a five (5) mile radius of the project site. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 106 5. Coverage. The Local Hiring Policy shall apply to all hiring for On-Site Jobs related to the construction of the Project, by Developer and its Contractors. 6. Outreach. So that Targeted Job Applicants are made aware of the availability of On-Site Jobs, Developer or its Contractors shall advertise available On-Site Jobs in the Santa Monica Daily Press or similar local newspaper, or similar local media and electronically on a City-sponsored website, if such a resource exists. In addition, Developer shall consult with and provide written notice to at least two first source hiring organizations, which may include but are not limited to the following: (i) Local first source hiring programs (ii) Trade unions (iii) Apprenticeship programs at local colleges (iv) Santa Monica educational institutions (v) Other non-profit organizations involved in referring eligible applicants for job opportunities 7. Hiring. Developer and its prime contractor shall consider in good faith all applications submitted by Targeted Job Applicants for On-Site Jobs, in accordance with their respective normal hiring practices. The City acknowledges that the Contractors shall determine in their respective subjective business judgment whether any particular Targeted Job Applicant is qualified to perform the On-Site Job for which such Targeted Job Applicant has applied. 8. Term. The Local Hiring Policy shall continue to apply to the construction of the Project until the final certificate of occupancy for the Project has been issued by the City. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 107 1554FifthDAgmt.10013.KLK Final: November 26, 2013 108 EXHIBIT F-2 LOCAL HIRING PROGRAM FOR PERMANENT EMPLOYMENT Local Hiring Policy For Permanent Employment. The Developer (if an Operator) or Hotel/Restaurant/Leasable Space Operator shall implement a local hiring policy (the “Local Hiring Policy”), consistent with the following guidelines: 1. Purpose. The purpose of the Local Hiring Policy is to facilitate the employment by the Hotel, Restaurant, or Leasable Space tenants of the Project of residents of the City of Santa Monica (the “Targeted Job Applicants”), and in particular, those residents who are “Low-Income Individuals” (defined below) by ensuring Targeted Job Applicants are aware of Project employment opportunities and have a fair opportunity to apply and compete for such jobs. The goal of this policy is local hiring. 2. Findings. a. Approximately 73,000-74,000 individuals work in the City. The City has a resident labor force of approximately 56,800. However, only about one- third (32.2 percent) of the City’s resident labor force works at jobs located in the City, with the balance working outside of the City. Consequently, a significant portion of the City’s resident and non-resident work force is required to commute long distances to find work, causing increased traffic on state highways, increased pollution, increased use of gas and other fuels and other serious environmental impacts. b. Due to their employment outside of the City, many residents of the City are forced to leave for work very early in the morning and return late in the evening, often leaving children and teenagers alone and unsupervised during the hours between school and the parent return from work outside the area. c. Absentee parents and unsupervised youth can result in increased problems for families, communities and the City as a whole, including, but not limited to, increased crime, more frequent and serious injuries, poor homework accomplishments, failing grades and increased high school dropout rates. d. Of the approximately 45,000 households in the City, thirty percent are defined as low-income households or lower, with eleven percent of these households defined as extremely low income and eight percent very low income. Approximately 10.5% of the City’s residents are unemployed. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 109 e. By ensuring that Targeted Job Applicants are aware of and have a fair opportunity to compete for Project jobs, this local hiring policy will facilitate job opportunities to City residents which would expand the City’s employment base and reduce the impacts on the environment caused by long commuting times to jobs outside the area. 3. Definitions. a. “Hospitality Training Academy” or “HTA” means the hotel worker job training resource program to be developed in Santa Monica through a Taft-Hartley Labor-Management Partnership between certain local hotels, UNITE HERE Local 11 and others to be determined. b. Low Income Individual” means a resident of the City of Santa Monica whose household income is no greater than 80% of the Median Income. c. “Median Income” means the median income for the Los Angeles-Long Beach Primary Metropolitan Statistical Area, as published from time to time by the City in connection with its Affordable Housing Production Program pursuant to SMMC Section 9.56. d. “On-Site Jobs” means all jobs on the Project site within the non- residential uses of greater than 1,500 gross square feet, regardless of whether such job is in the nature of an employee or an independent contractor. e. “Operator” means the Hotel, Restaurant, or Leasable Space operators on the Project site. 4. Priority for Targeted Job Applicants. Subject to Section 7 below in this Exhibit ”F-2,” the Local Hiring Policy provides that the Targeted Job Applicants shall be considered for each On-Site Job in the following order of priority: a. First Priority: Any resident of a household with no greater than 80% Median Income that resides within the Low and Moderate Income Areas indicated on the map attached to this Exhibit F-2; b. Second Priority: Any resident of a household with no greater than 80% Median Income that resides within the City; and c. Third Priority: Any resident of a household with no greater than 80% Median Income that resides within a five (5) mile radius of the project site. For purposes of this Local Hiring Policy, the employer is authorized to rely on the most recent year’s income tax records (W-2) and proof of residency (e.g. driver’s license, utility bill, voter registration) if voluntarily submitted by a prospective job 1554FifthDAgmt.10013.KLK Final: November 26, 2013 110 applicant for purposes of assessing a Targeted Job Applicant’s place of residence and income. 5. Coverage. The Local Hiring Policy shall apply to all hiring for On-Site Jobs. Notwithstanding the foregoing, the Local Hiring Policy shall not apply to temporary employees utilized while a permanent employee is temporarily absent or while a replacement is being actively sought for a recently-departed permanent employee. Furthermore, the Local Hiring Policy shall not preclude the re-hiring of a prior employee or the transfer of an existing employee from another location. 6. Recruitment. a. Local Hiring Goal - The Developer has established a local hiring goal of 40% of the total full and part-time jobs in the Project being held by Santa Monica residents. There shall be no penalties to the Developer, nor shall the Developer be deemed to be in default under the Development Agreement, if such goal is not achieved. The Developer shall report its actual local hiring results to the City as part of its annual report as mandated by Section 10.2 of the Development Agreement. b. Advanced Local Recruitment - Initial Hiring for New Business. So that Targeted Job Applicants are made aware of the availability of On-Site Jobs, at least 30 days before recruitment (“Advanced Recruitment Period”) is opened up to general circulation for the initial hiring by a new business, Operator shall advertise available On-Site Jobs in the Santa Monica Daily Press, or Santa Monica Police Activity League or similar organization, or similar local media and electronically on a City-sponsored website, if such a resource exists. In addition, Developer shall consult with and provide written notice to the HTA’s program and at least two first source hiring organizations, which may include but are not limited to the following: (i) Local first source hiring programs (ii) Trade unions (iii) Apprenticeship programs at local colleges (iv) Santa Monica educational institutions (v) Other non-profit organizations involved in referring eligible applicants for job opportunities c. Advanced Local Recruitment - Subsequent Hiring. For subsequent employment opportunities, the Advanced Recruitment Period for Targeted Job Applicants can be reduced to at least 7 days before recruitment is opened up to general circulation. Alternatively, the Developer or 1554FifthDAgmt.10013.KLK Final: November 26, 2013 111 Hotel/Restaurant Operator may also use an established list of potential Targeted Job Applicants of not more than one year old. d. Obligations After Completion of Advanced Recruitment Period. Once these advanced local recruitment obligations have been met, Developer or Hotel/Restaurant Operator is not precluded from advertising regionally or nationally for employees. 7. Hiring. As part of this Local Hiring Policy, each time a new Hotel, Restaurant, or other tenant of the Leasable Space having more than ten (10) positions of employment opens within the Project, Developer or the Operator of any new Hotel or Restaurant in the Project shall conduct at least one on-site job fair targeted exclusively for Santa Monica residents, during the Advanced Recruitment Period for the intended purpose of recruiting Targeted Job Applicants for on-site Hotel, Restaurant or other jobs in the Leasable Space. Developer or Hotel/Restaurant/Leasable Space Operator shall consider in good faith all applications submitted by Targeted Job Applicants for On-Site Jobs in accordance with their normal practice to hire the most qualified candidate for each position and shall be make good faith efforts to hire Targeted Job Applicants -- including, as to the Hotel and Restaurant, all applications from those Targeted Job Applicants who have completed the HTA’s hospitality boot camp -- when such Applicants are most qualified or equally qualified as other applicants. The City acknowledges that the Developer or Hotel/Restaurant/Leasable Space Operator shall determine in their respective subjective business judgment whether any particular Targeted Job Applicant is qualified to perform the On-Site Job for which such Targeted Job Applicant has applied. 8. Proactive Outreach. The Developer, Hotel, or Leasable Space Operator shall designate a “First-Source Hiring Coordinator” (FHC) that shall manage all aspects of the Local Hiring Policy. The FHC shall be responsible for actively seeking partnerships with local first-source hiring organizations prior to employment opportunities being available. The FHC shall also be responsible for encouraging and making available information on first-source hiring to respective commercial tenants of the Project. The FHC shall contact new employers on the Project site to inform them of the available resources on first-source hiring and to offer a means by which they can participate in the Hotel’s program. In addition to implementation of the Local Hiring Policy, the FHC can have other work duties unrelated to the Local Hiring Policy. 9. Collective Bargaining Agreement. The provisions of this Local Hiring Policy may be pre-empted, in full or in part, in a bona fide collective bargaining agreement, but only if and to the extent the preemption is clear and unambiguous. 10. Term. The Local Hiring Policy shall apply for the life of the Project. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 112 1554FifthDAgmt.10013.KLK Final: November 26, 2013 113 EXHIBIT G-1 HOTEL CONDITIONS TO DISPENSE ALCOHOL FROM THE MARKET Within the sundry market located on the ground floor and designated as “Market” on the Project Plans, Developer or a business operator, collectively “Market Operator”, may sell alcoholic beverages, including beer, wine, malt beverages, and distilled spirits to hotel patrons, on the following terms and conditions: 1. This approval is for a Type 20 or 21 (Off-Sale General) alcohol license only. Any request to modify the license type shall require either a conditional use permit or a Development Agreement amendment pursuant to Section 2.4.3 (Major Modifications). 2. The permitted hours of alcohol sales in the Market shall be: • 9:00 AM to 12:00 AM (Daily) 3. Concurrently with filing an application with the State ABC, the Market Operator shall provide a copy of this signed Exhibit “G-1” to the local office of the State Alcoholic Beverage Control Department. 4. In the event the Market Operator fails to comply with any conditions of approval of this Exhibit, no further permits, licenses, approvals or certificates of occupancy for the hotel shall be issued to such applicant until such violation has been fully remedied. 5. Minor amendments to the Market as shown on the Project Plans shall be subject to approval by the Director of Planning in accordance with Section 2.4.2 (Minor Modifications). A significant change in the approved concept for the Market, including but not limited to, a significant increase in shelf area for alcoholic beverages as determined by the Director of Planning, shall require either a conditional use permit or a Development Agreement amendment pursuant to Section 2.4.3 (Major Modifications). The Market shall be located on the ground floor of the Hotel. The size and general configuration of the Market shall be in substantial conformance with the plans submitted or as modified by the, Planning Commission, Architectural Review Board, or Director of Planning. An intensity of operation through an increase of any alcohol shelf area by up to 25% can occur without prior approval from the City of Santa Monica, pending State ABC approval. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 114 6. The Market shall at all times be conducted in a manner not detrimental to surrounding properties or residents by reason of lights, noise, activities, parking or other actions. 7. The Market Operator shall prohibit loitering within the Market and shall control unruly or inebriated guests at the Hotel. 8. Window or other signage on or in the hotel visible from the public right-of-way that advertises beer or alcohol shall not be permitted, exclusive of the standard packaging appearing on the alcohol products offered for sale. 9. The Market Operator is on notice that all temporary signage is subject to the restrictions of the City’s sign ordinance included in Exhibit “E” SMCC Article 9 (Planning and Zoning) to this Agreement. 10. The Market Operator shall employ staff whose responsibilities include patrolling the licensed premises to ensure patrons of the hotel are not disruptive to adjoining properties and area residents. 11. The Market Operator shall at all times comply with the provisions of the Noise Ordinance (SMMC Chapter 4.12). 12. Prior to commencement of alcohol sales in the Market, the hotel operator shall post a notice at the entry to the Market stating that the site is regulated by a Development Agreement and the Development Agreement, which includes the Market’s alcohol-related conditions of approval, is available upon request. 13. Prior to commencement of alcohol sales in the Market, a security plan shall be submitted to the Chief of Police for review and approval. The plan shall address both physical and operational security issues related to the Market. 14. Prior to commencement of alcohol service in the Market, the Market Operator shall participate in the Santa Monica Alcohol Awareness for Retailers Training (S.M.A.A.R.T.) program conducted by the Santa Monica Police Department. 15. The Market Operator authorizes reasonable City inspection of the hotel to ensure compliance with the conditions set forth in this Exhibit “G-1” and will bear the reasonable cost of these inspections as established by SMMC Section 2.72.010 and Resolution No. 9905 (CCS) or any successor legislation thereto. These 1554FifthDAgmt.10013.KLK Final: November 26, 2013 115 inspections shall be no more intrusive than necessary to ensure compliance with this Exhibit. Acknowledgement of Market Operator I hereby agree to the above conditions of approval and acknowledge that failure to comply with such conditions shall constitute grounds for potential revocation of the approval to sell alcoholic beverages from the Market. ______________________________________ __________________________ Print Name and Title Date ___________________________________ Signature 1554FifthDAgmt.10013.KLK Final: November 26, 2013 116 EXHIBIT G-2 HOTEL CONDITIONS TO DISPENSE ALCOHOL FROM COMMON AREAS In the Hotel common areas (including the ground floor lobby, lounge bistro, and the second floor meeting room, terrace, spa area and deck areas), Developer or a hotel/business operator may sell or furnish alcoholic beverages for consumption on the following terms and conditions without obtaining a Conditional Use Permit. 1. This approval is for Type 70 (On-Sale General Restrictive Service) alcohol license only. Any request to modify the license type shall require either a conditional use permit or a Development Agreement amendment pursuant to Section 2.4.3 (Major Modifications). 2. Floor areas in which alcohol is served shall not exceed the following: Hotel common areas, including the ground floor lobby, lounge, bistro, and the second floor meeting room, terrace, spa and deck areas. 3. The seating configurations for each of the alcohol serving areas as shown on the Project Plans shall not be altered so as to increase occupancy of those areas. The second floor meeting room, terrace, spa area and deck areas may be rearranged as appropriate for special events or conferences. 4. Hotel employees may sell or furnish alcoholic beverages for consumption within the common areas of the hotel premises, including the ground floor lobby, lounge, bistro and the second floor meeting room, terrace, spa and deck areas, to hotel guests and their invitees between the hours of: • Sunday through Thursday: 9:00 AM to 12:00 AM (midnight), interior common areas 9:00 AM to 12:00 AM (midnight), second floor outdoor common areas • Friday and Saturday: 9:00 AM to 1:00 AM (next day), interior common areas 9:00 AM to 12:00 AM (midnight), second floor outdoor common areas Unless the alcoholic beverages are offered to Hotel guests on a complimentary basis, alcoholic beverage purchases pursuant to this Section 4 shall be charged to guest’s room bill or by method of payment permissible by the State’s Department of Alcoholic Beverage Control for a Type 70 alcohol license. Except for invitees or guests of Hotel patrons, the general public shall not be able to purchase alcoholic beverages for consumption in the Hotel common areas. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 117 5. Minor amendments to the Hotel floor areas where alcohol may be served as shown on the Project Plans shall be subject to approval by the Director of Planning in accordance with Section 2.4.2 (Minor Modifications). A significant change in the approved concept for Hotel alcohol service areas or any increase in the square footage shall require either a Conditional Use Permit or a Development Agreement amendment pursuant to Section 2.4.3 (Major Modifications). Construction of the hotel common areas where alcohol may be served shall be in substantial conformance with the plans submitted or as modified by the Planning Commission, Architectural Review Board, or Director of Planning. No expansion of any alcohol serving area, intensity of operation of any alcohol serving area, or outdoor alcohol serving areas shall occur without prior approval from the City of Santa Monica and State ABC (if required by the ABC). 6. Concurrently with filing an application to the State ABC for one or more alcohol licenses, the applicant shall provide a copy of this signed Exhibit “G-2” to the local office of the State Alcoholic Beverage Control Department. 7. The operation of the hotel, including the common areas, shall at all times be conducted in a manner not detrimental to surrounding properties or residents by reason of lights, noise, activities, parking or other actions. 8. No alcoholic beverage shall be sold for consumption beyond the hotel premises unless pursuant to an approved Conditional Use Permit. 9. The primary use of the hotel premises shall be for Hotel Use. 10. Live, non-amplified, acoustical music shall be permitted in the hotel indoor common areas provided there is no dancing or dance floor and there is no cover charge or minimum drink purchase requirement. No dancing or live entertainment is permitted in any of the Hotel outdoor areas. 11. No outside promoter shall be permitted to rent or lease the hotel. No event held at the hotel shall be advertised under another name as a nightclub or dancehall. All private parties shall be operated through the hotel. 12. Except for special events, alcohol shall not be served in any disposable container such as disposable plastic or paper cups. 13. The hotel operator shall control unruly or inebriated guests at the Hotel. 14. The hotel shall at all times comply with the provisions of the Noise Ordinance (SMMC Chapter 4.12). 15. Window or other comparable signage visible from the public right-of-way that advertises beer or alcohol shall not be permitted. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 118 16. Prior to commencement of alcohol service, a security plan shall be submitted to the Chief of Police for review and approval. The plan shall address both physical and operational security issues at the hotel. 17. Prior to the commencement of alcohol service, the hotel operator, restaurant operator or business operator, as applicable, shall participate in the Santa Monica Alcohol Awareness for Retailers Training (S.M.A.A.R.T) program conducted by the Santa Monica Police Department. 18. The Developer authorizes reasonable City inspection of the Property to ensure compliance with the conditions set forth in this Exhibit “G-2” and will bear the reasonable costs of these inspections as established by SMMC Section 2.72.010 and Resolution No. 9905 (CCS) or any successor legislation thereto. These inspections shall be no more intrusive than necessary to ensure compliance with this Section. 19. Prior to exercising the rights of this Exhibit “G-2,” the applicant shall post a notice at the hotel entry stating that the Property is regulated by a Development Agreement and the Development Agreement, which includes the hotel’s alcohol related conditions of approval, is available upon request. This notice shall remain posted at all time the hotel is in operation. 20. The hotel operator shall employ staff whose responsibilities include patrolling the hotel to ensure patrons of the hotel are not disruptive to adjoining properties and area residents. Acknowledgement of Hotel Operator I hereby agree to the above conditions of approval and acknowledge that failure to comply with such conditions shall constitute grounds for potential revocation of the approval to dispense alcoholic beverages in the hotel common areas. ______________________________________ __________________________ Print Name and Title Date ______________________________________ Signature 1554FifthDAgmt.10013.KLK Final: November 26, 2013 119 EXHIBIT H RESTAURANT CONDITIONS TO DISPENSE ALCOHOL Within the Restaurant which may be located on the ground floor and designated as “Leasable Space” on the Project Plans, and/or within any Restaurant operated within the Hotel, (collectively “Restaurant”) Developer or a business operator or the Hotel Operator, as the case may be, (collectively “Restaurant Operator”) may dispense for sale or other consideration, alcoholic beverages, including beer, wine, malt beverages, and distilled spirits for on-site consumption, on the following terms and conditions: 1. This approval is for a Type 41 (On Sale Beer & Wine -- Eating Place) and/or 47 (On Sale General -- Eating Place) alcohol license only. Any request to modify the license type shall require either a conditional use permit or a Development Agreement amendment pursuant to Section 2.4.3 (Major Modifications). 2. Seating arrangements for sit-down patrons in the Restaurant shall not exceed fifty-four (54) interior dining seats (including up to eleven (11) bar/counter seats) and up to twenty-four (24) exterior seats. Up to nine (9) interior waiting seats may also be provided. Any request for additional interior or exterior seating shall be subject to Director of Planning approval, pursuant to Condition No. 10 of this Exhibit H. 3. The permitted hours of alcohol consumption in the Restaurant shall be: • Sunday through Thursday 9:00 AM to 1:00 AM (next day), interior dining area 9:00 AM to 12:00 AM (midnight), outdoor dining area • Friday and Saturday 9:00 AM to 2:00 AM (next day), interior dining area 9:00 AM to 1:00 AM (next day), outdoor dining area Complete closure and all employees shall vacate the tenant space by 2:00 AM Sunday through Thursday, and 3:00 AM Friday and Saturday and no “after hours” operations shall be permitted; provided, however, that such vacation of the premises shall not apply to any Hotel operations where the Hotel Operator also operates the Restaurant. 4. Alcoholic beverage orders shall cease 30 minutes prior to closure of the Restaurant, or no later than the closing of the associated food service of the Restaurant, whichever is first. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 120 5. Prior to commencement of alcohol service by the Restaurant, the Restaurant Operator shall post a notice at the entry stating that the site is regulated by a Development Agreement and the Development Agreement, which includes the Restaurant’s conditions of approval is available upon request. 6. Concurrently with filing an application with the State ABC, the Restaurant Operator shall provide a copy of this signed Exhibit “H” to the local office of the State Alcoholic Beverage Control Department. 7. Prior to commencement of alcohol service in the Restaurant, the Restaurant operator shall submit a plan for approval by the City’s Planning Director regarding Restaurant employee alcohol awareness training programs and policies. The plan shall outline a mandatory alcohol awareness training program for all Restaurant employees having contact with the public and shall state management’s policies addressing alcohol consumption and inebriation. The program shall require all Restaurant employees having contact with the public to complete a California Department of Alcoholic Beverage Control (ABC) sponsored alcohol awareness training program within 90 days of the effective date of the approval by the Planning Director of the plan. In the case of new Restaurant employees, the employee shall attend the alcohol awareness training within 90 days of hiring. In the event the ABC no longer sponsors an alcohol awareness training program, all Restaurant employees having contact with the public shall complete an alternative program approved by the Planning Director. The Restaurant operator shall provide the City with an annual report regarding compliance with this condition. The Restaurant shall be subject to any future City-wide alcohol awareness training program condition affecting similar establishments. 8. Prior to commencement of alcohol service in the Restaurant, the Restaurant operator shall also submit a plan describing the establishment’s designated driver program, which shall be offered by the Restaurant operator to the establishment’s patrons. The plan shall specify how the Restaurant operator will inform Restaurant patrons of the program, such as offering on the menu a free non- alcoholic drink for every party of two or more ordering more than one alcoholic beverage. 9. In the event the Restaurant operator fails to comply with any conditions of approval of this Exhibit, no further permits, licenses, approvals or certificates of 1554FifthDAgmt.10013.KLK Final: November 26, 2013 121 occupancy for the Restaurant shall be issued to such applicant until such violation has been fully remedied. 10. Minor amendments to the Restaurant as shown on the Project Plans shall be subject to approval by the Director of Planning in accordance with Section 2.4.2 (Minor Modifications). A significant change in the approved concept for the Restaurant as determined by the Director of Planning shall require either a conditional use permit or a Development Agreement amendment pursuant to Section 2.4.3 (Major Modifications). If alcohol is to be served, construction of the Restaurant shall be in substantial conformance with the plans submitted or as modified by the Planning Commission, Architectural Review Board, or Director of Planning. No expansion in number of seats of any alcohol serving area, intensity of operation of any alcohol serving area, or outdoor alcohol serving areas shall occur within the Restaurant without prior approval from the City of Santa Monica and State ABC (if required by the ABC). 11. The Restaurant shall at all times be conducted in a manner not detrimental to surrounding properties or residents by reason of lights, noise, activities, parking or other actions. 12. No alcoholic beverage shall be sold for consumption beyond the Restaurant premises. Notwithstanding the foregoing, if the Restaurant offers room service of meals to the hotel rooms as part of its regular operations, then alcoholic beverages may be sold for consumption in guest rooms or adjoining private outdoor space to hotel guests 21 years of age or older who provide proof of age if requested by room service personnel. 13. Except for special events, alcohol shall not be served in the Restaurant in any disposable container such as disposable plastic or paper cups. 14. No more than 35% of total gross revenues per year of the Restaurant shall be from alcohol sales. The Restaurant Operator shall maintain records of gross revenue sources which shall be submitted annually to the City’s Planning Division at the beginning of each calendar year after the first year of operation and also available to the City and the State ABC upon request. 15. The primary use of the Restaurant shall be for sit-down meal service to patrons. Alcohol shall only be served to patrons in areas of the Restaurant where meal service is available. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 122 16. Bottle service shall not be available to patrons unless full meal service is provided concurrent with the bottle service. All food items shall be available from the full service menu. Bottle service shall mean the service of any full bottle of liquor, wine, or beer, of more than 375 ml, along with glass ware, mixers, garnishes, etc., in which patrons are able to then make their own drinks or pour their own wine or beer.. 17. The Restaurant shall maintain a kitchen or food-serving area in which a variety of food is prepared or cooked onsite. 18. The Restaurant shall serve food to patrons during all hours the establishment is open for customers. 19. Any minimum purchase requirement may be satisfied by the purchase of beverages or food. 20. Patrons shall be permitted to order meals at the bar at all times the bar or Restaurant is open for business. 21. Take out service (not including Hotel use or room service) shall be only incidental to the primary sit down use. 22. The primary use of the outdoor dining area shall be for seated meals service. Patrons who are standing in the outdoor seating area shall not be served. 23. No dancing or live entertainment beyond in that allowed in the definition of “Restaurant” contained in SMMC Section 9.04.02.030.730 shall be permitted in the Restaurant. 24. No queuing of patrons at the Restaurant entry or checking of identification at that entry shall be permitted. There shall not be any age limitation imposed restricting access to the restaurant (e.g. persons of all ages must be allowed to enter the restaurant). 25. The restaurant shall not organize or participate in organized “pub-crawl” events where participants or customers pre-purchase tickets or tokens to be exchanged for alcoholic beverages at the restaurant. 26. No video or other amusement games shall be permitted in the Restaurant, other than personal handheld and tablet devices. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 123 27. The Restaurant operator shall prohibit loitering in the restaurant area and shall control noisy patrons leaving the restaurant. 28. Window or other signage on or in the Restaurant visible from the public right-of- way that advertises beer or alcohol shall not be permitted. 29. The operator of the Restaurant is on notice that all temporary signage is subject to the restrictions of the City’s sign ordinance included in Exhibit “E” SMCC Article 9 (Planning and Zoning) to this Agreement. 30. The Restaurant shall at all times comply with the provisions of the Noise Ordinance (SMMC Chapter 4.12). 31. Pursuant to SMMC Section 4.12 (Noise), establishments with amplified music may be required to provide entrances and exits, except exits which are solely emergency exits, designed as two-door vestibules, so that only one set of doors is open at a time. Doors shall be of solid core design and windows shall be constructed with double-paned glass in the event of amplified music. 32. The Restaurant shall not conduct recycling deposits, pressure washing or other noise generating activity audible from the Property between the hours of 11PM and 7AM. 33. Prior to commencement of alcohol service in Restaurant, a security plan for the Restaurant shall be submitted to the Chief of Police for review and approval. The plan shall address both physical and operational security issues. 34. Prior to commencement of alcohol service in the Restaurant, the restaurant operator shall participate in the Santa Monica Alcohol Awareness for Retailers Training (S.M.A.A.R.T.) program conducted by the Santa Monica Police Department. 35. The Restaurant operator authorizes reasonable City inspection of the Restaurant to ensure compliance with the conditions set forth in this Exhibit “H” and will bear the reasonable cost of these inspections as established by SMMC Section 2.72.010 and Resolution No. 9905 (CCS) or any successor legislation thereto. These inspections shall be no more intrusive than necessary to ensure compliance with this Exhibit. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 124 Acknowledgement of Restaurant Operator I hereby agree to the above conditions of approval and acknowledge that failure to comply with such conditions shall constitute grounds for potential revocation of the approval to dispense alcoholic beverages in the Restaurant. ______________________________________ __________________________ Print Name and Title Date ___________________________________ Signature 1554FifthDAgmt.10013.KLK Final: November 26, 2013 125 EXHIBIT I PARKING AND DELIVERIES MANAGEMENT PLAN The three parking scenarios are described as follows: SELF-PARKING OPTION GUIDELINES: The hotel is expected to have approximately seventy-seven (77) striped parking spaces which can be utilized by guests and employees for self-parking vehicles. The main vehicular access to the hotel will be from a driveway located on 5th Street. Vehicles will enter the site and either, pull into one of the LOADING ZONE (drop-off/ check-in) spaces on the Ground Level to check-in, drop someone off, pick someone up, or they may drive down the ramp to subterranean parking levels P1 or P2 and park in one of the parking spaces that will be designated for GUEST CHECK-IN ONLY. Also, Taxi’s or other vehicles entering the site for pick-up or drop-off’s may proceed to the lower level and turn around, or more directly perform a 3-point-turn at the Ground Level and exit the site. Hotel guests and employees will access the hotel via an elevator and stairs located on levels P1 and P2. Vehicles will exit the subterranean parking levels shall drive up the ramps to the ground level and either, pull into one of the LOADING ZONES, or exit the site by the driveway onto 5th Street. An appropriate daily, hourly and/ or usage Self-Parking Fee shall be charged to hotel guests and/ or employees for parking vehicles. During periods when the Self-Parking Option is being utilized, all areas will be monitored by hotel staff to ensure traffic flows and does not block public sidewalks or back-up into 5th Street. An appropriate and comprehensive signage program will be developed and implemented. Examples of signage might include: “SELF-PARKING FOR HOTEL GUESTS ONLY”, “PARKING FEE APPLIES” and “NO VALET PARKING AVAILABLE AT THIS TIME”, “GUESTS CHECK-IN, PICK-UP, DROP-OFF’S SHOULD PROCEED DOWN TO LOWER LEVEL OF PARKING GARAGE”, “LOADING ZONE ONLY: VEHICLES SHALL NOT BE LEFT UNATTENDED”, ETC…. VALET/ATTENDANT PARKING OPTION GUIDELINES: The parking capacity of the hotel is expected to be increased by approximately thirty one (31) stalls by double and tandem parking techniques when used in conjunction with either valet parking services or parking attendant services, increasing the total parking capacity to approximately one-hundred-eight (108) parking spaces, which can be utilized by hotel guests and employees for parking vehicles. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 126 Valet Parking Service. Vehicular access will be the same as with the Self-Parking Option, except that all vehicles shall be greeted by a Valet Attendant either on the Ground Level, or vehicles shall be directed below to Level P1. Hotel guests with vehicles to park shall receive a Parking Ticket and leave their vehicle keys with the Valet Attendant. Vehicles that will not be parked, may perform a 3-point-turn on the Ground Level, P1 , and exit the site. Valets may park cars on levels P1 and P2, as appropriate, and shall return to the Valet Station with another vehicle for a departing guest or via an elevator located on P1 and P2. Vehicle keys and accompanying Parking Ticket shall be placed in a designated Valet Station for retrieval at a later time. When a hotel guest wishes to depart, they shall either contact a Valet Attendant via a hotel phone or approach a Valet Attendant and provide their Parking Ticket. The vehicle may be retrieved and delivered to the designated Valet Station, and cars shall exit the site by the driveway onto 5th Street. An appropriate daily, hourly and/ or usage Valet-Parking Fee shall be charged to hotel guests and/ or employees for parking vehicles. During periods when the Valet-Parking Option is being utilized, all areas will be monitored by hotel staff to ensure traffic flows and does not block public sidewalks or back-up into 5th Street. An appropriate and comprehensive signage program will be developed and implemented. Examples of signage might include: “SELF PARKING FOR HOTEL GUESTS ONLY, PARKING FEE APPLIES”, “NO VALET PARKING AT THIS TIME”, “LOADING ZONE ONLY: VEHICLES SHALL NOT BE LEFT UNATTENDED”, “PROCEED TO LEVEL P1 BELOW FOR GUESTS CHECK-IN, PICK-UP, DROP-OFF’S”, “U-TURNS PERMITTED AT LOWER LEVEL OF PARKING GARAGE”, “LOADING ZONE ONLY: VEHICLES SHALL NOT BE LEFT UNATTENDED”, etc... Attendant Parking. Vehicular access will be the same as with the Self-Parking Option, except that the drivers of any vehicles that are double parked or stack parked shall be required to leave their keys with the on-site parking attendant and would receive a Parking Ticket from the Parking Attendant. Vehicle keys and accompanying Parking Ticket shall be placed in a designated Parking Attendant Station for retrieval at a later time. The Parking Attendant would remain on-site to move cars in the event a driver of a car that is blocked in wishes to depart from the parking garage. When a hotel guest wishes to depart, they would present their Parking Ticket to the Attendant if they left their keys at the time of arrival. The attendant would return their keys to the guest. If a hotel guest’s vehicle is blocked in by another vehicle, the Parking Attendant would retrieve that vehicle’s key from the Parking Station and move the vehicle to allow the guest to depart in their own vehicle. All cars shall exit the site by the driveway onto 5th Street. During periods when the Attendant-Parking Option is being utilized, all areas will be monitored by hotel staff to ensure traffic flows and does not block public sidewalks or back-up into 5th Street. An appropriate and comprehensive signage program will be developed and implemented. Examples of signage might include: “ATTENDANT PARKING FOR HOTEL GUESTS ONLY, PARKING FEE APPLIES”, “NO SELF-PARKING AT THIS TIME”, “GUESTS CHECK-IN, PICK-UP, DROP-OFF’S SHOULD PROCEED DOWN TO LOWER LEVEL OF PARKING GARAGE”, “LOADING ZONE ONLY: VEHICLES SHALL NOT BE LEFT UNATTENDED”, ETC…. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 127 VALET PARKING, WITH SELF-PARKING OPTION GUIDELINES: Utilizing only the lowest subterranean parking level, P2, for Valet/Attendant Parking, and P1, for Self-Parking, it is expected that the parking capacity of each hotel is expected to be increased by fifteen (15) stalls by double and tandem parking techniques, increasing the total parking capacity to approximately eighty-nine (89) parking spaces, which can be utilized by hotel guests and employees for parking vehicles. The respective Self-Parking and Valet/Attendant Parking Options Guidelines shall be followed for each situation as outlined above. An appropriate daily, hourly and/ or usage Parking Fee shall be charged to hotel guests and/ or employees for parking vehicles for both Valet and Self-Parking Options. DELIVERIES: Deliveries to the hotels and retail and/or restaurant spaces will be made by delivery trucks or vans, and will occur in the 4th Court and 5th Court alleyways and at the Ground Level LOADING ZONES accessed from the driveways off of 5th Street for each hotel. Deliveries in the alleyways will be limited to between the hours of 10AM and 2PM. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 128 EXHIBIT J RESERVED 1554FifthDAgmt.10013.KLK Final: November 26, 2013 129 EXHIBIT K CONSTRUCTION MITIGATION PLAN Construction Period Mitigation 1. A construction period mitigation plan shall be prepared by the applicant for approval by the PWD prior to issuance of a building permit. The approved mitigation plan shall be posted on the site for the duration of the project construction and shall be produced upon request. As applicable, this plan shall: a. Specify the names, addresses, telephone numbers and business license numbers of all contractors and subcontractors as well as the developer and architect; b. Describe how demolition of any existing structures is to be accomplished; c. Indicate where any cranes are to be located for erection/construction; d. Describe how much of the public street, alleyway, or sidewalk is proposed to be used in conjunction with construction; e. Set forth the extent and nature of any pile-driving operations; f. Describe the length and number of any tiebacks which must extend under the public right-of-way and other private properties; g. Specify the nature and extent of any dewatering and its effect on any adjacent buildings; h. Describe anticipated construction-related truck routes, number of truck trips, hours of hauling and parking location; i. Specify the nature and extent of any helicopter hauling; j. State whether any construction activity beyond normally permitted hours is proposed; k. Describe any proposed construction noise mitigation measures, including measures to limit the duration of idling construction trucks; l. Describe construction-period security measures including any fencing, lighting, and security personnel; m. Provide a grading and drainage plan; 1554FifthDAgmt.10013.KLK Final: November 26, 2013 130 n. Provide a construction-period parking plan which shall minimize use of public streets for parking; o. List a designated on-site construction manager; p. Provide a construction materials recycling plan which seeks to maximize the reuse/recycling of construction waste; q. Provide a plan regarding use of recycled and low-environmental-impact materials in building construction; and r. Provide a construction period urban runoff control plan. Air Quality 2. Dust generated by the development activities shall be kept to a minimum with a goal of retaining dust on the site through implementation of the following measures recommended by the SCAQMD Rule 403 Handbook: • During clearing, grading, earth moving, excavation, or transportation of cut or fill materials, water trucks or sprinkler systems are to be used to the extent necessary to prevent dust from leaving the site and to create a crust after each day’s activities cease. • Vehicles hauling dirt or other construction debris from the site shall cover any open load with a tarpaulin or other secure covering to minimize dust emissions. Immediately after commencing dirt removal from the site, the general contractor shall provide the City with written certification that all trucks leaving the site are covered in accordance with this condition of approval. • During clearing, grading, earth moving, excavation, or transportation of cut or fill materials, streets and sidewalks within 150 feet of the site perimeter shall be swept and cleaned a minimum of twice weekly or as frequently as required by the PWD. • During construction, water trucks or sprinkler systems shall be used to keep all areas of vehicle movement damp enough to prevent dust from leaving the site. At a minimum, this would include wetting down such areas in the later morning and after work is completed for the day and whenever wind exceeds 15 miles per hour. • Soil stockpiled for more than two days shall be covered, kept moist, or treated with soil binders to prevent dust generation. 3. Construction equipment used on the site shall meet the following conditions in order to minimize NOx and ROC emissions: 1554FifthDAgmt.10013.KLK Final: November 26, 2013 131 • Diesel-powered equipment such as booster pumps or generators should be replaced by electric equipment to the extent feasible; and • The operation of heavy-duty construction equipment shall be limited to no more than 5 pieces of equipment at one time. Noise Attenuation 4. All diesel equipment shall be operated with closed engine doors and shall be equipped with factory-recommended mufflers. 5. Electrical power shall be used to run air compressors and similar power tools. 6. For all noise-generating activity on the project site associated with the installation of new facilities, additional noise attenuation techniques shall be employed to reduce noise levels to City of Santa Monica noise standards. Such techniques may include, but are not limited to, the use of sound blankets on noise generating equipment and the construction of temporary sound barriers between construction sites and nearby sensitive receptors. Construction Period 7. Construction Moratorium: There shall be no construction activities that require opening, closing, or blocking of streets, sidewalks, alleys, or street parking in retail areas of the City over the holiday season that runs from the day before Thanksgiving through January 2nd. Exemptions are allowed for emergencies and special conditions authorized in advance by the Director of Public Works. The following areas are affected by this condition: Downtown (Wilshire to the 10 Freeway and Lincoln to Ocean Avenue; Main Street (Pico to the Southerly city limit); Montana Avenue (6th Court to 17th Street); Pico Boulevard (from the Ocean to the Easterly city limit at Centinela). 8. Any construction related activity in the public right-of-way will be required to acquire the approvals by the City of Santa Monica, including but not limited to: Use of Public Property Permits, Sewer Permits, Excavation Permits, Alley Closure Permits, Street Closure Permits, and Temporary Traffic Control Plans. 9. Immediately after demolition and during construction, a security fence eight feet in height shall be maintained around the perimeter of the lot. The lot shall be kept clear of all trash, weeds, etc. 10. Vehicles hauling dirt or other construction debris from the site shall cover any open load with a tarpaulin or other secure covering to minimize dust emissions. Immediately after commencing dirt removal from the site, the general contractor shall provide the City of Santa Monica with written certification that all trucks leaving the site are covered in accordance with this condition of approval. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 132 11. During demolition, excavation, and construction, this project shall comply with SCAQMD Rule 403 to minimize fugitive dust and associated particulate emission, including but not limited to the following: 12. All material excavated or graded shall be sufficiently watered to prevent excessive amounts of dust. Watering shall occur at least three times daily with complete coverage, preferably at the start of the day, in the late morning, and after work is done for the day. 13. All grading, earth moving, or excavation activities shall cease during periods of high winds (i.e., greater than 20 mph measured as instantaneous wind gusts) so as to prevent excessive amounts of dust. 14. Soils stockpiles shall be covered. 15. Onsite vehicle speeds shall be limited to 15 mph. 16. Wheel washers shall be installed where vehicles enter and exit the construction site onto paved roads or wash off trucks and any equipment leaving the site each trip. 17. An appointed construction relations officer shall act as a community liaison concerning onsite construction activity including resolution of issues related to PM10 generation. 18. Streets shall be swept at the end of the day using SCAQMD Rule 1186 certified street sweepers or roadway washing trucks if visible soil is carried onto adjacent public paved roads (recommend water sweepers with reclaimed water). 19. All active portions the construction site shall be sufficiently watered three times a day to prevent excessive amounts of dust. 20. Developer shall prepare a notice, subject to the review by the Director of Planning and Community Development, that lists all construction mitigation requirements, permitted hours of construction, and identifies a contact person at City Hall as well as the developer who will respond to complaints related to the proposed construction. The notice shall be mailed to property owners and residents of the neighborhood within 500 feet of the Project at least five (5) days prior to the start of construction. 21. A sign shall be posted on the property in a manner consistent with the public hearing sign requirements which shall identify the address and phone number of the owner and/or applicant for the purposes of responding to questions and complaints during the construction period. Said sign shall also indicate the hours of permissible construction work. 22. A copy of these conditions shall be posted in an easily visible and accessible 1554FifthDAgmt.10013.KLK Final: November 26, 2013 133 location at all times during construction at the project site. The pages shall be laminated or otherwise protected to ensure durability of the copy. 23. No construction-related vehicles may be parked on the street at any time or on the subject site during periods of peak parking demand. For the duration of demolition and construction, all construction-related vehicles must be parked for storage purposes either on-site or at on offsite location on a private lot. The offsite location shall be approved as part of the Department of Environmental and Public Works review of the construction period mitigation plan and by the Department of City Planning if a Temporary Use Permit is required. 24. Construction period signage shall be subject to the approval of the Architectural Review Board. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 134 EXHIBIT L ASSIGNMENT AND ASSUMPTION AGREEMENT Recording Requested By and When Recorded Mail To: HARDING LARMORE KUTCHER & KOZAL, LLP 1250 6th Street, Suite 200 Santa Monica, CA 90401 Attn: Kenneth L. Kutcher ________________________________________________________________________ ASSIGNMENT AND ASSUMPTION AGREEMENT This ASSIGNMENT AND ASSUMPTION AGREEMENT (“Agreement”) is made and entered into by and between ___________________________, a ______________________________________ (“Assignor”), and ________________________, a __________________ (“Assignee”). R E C I T A L S A. The City of Santa Monica (“City”) and Assignor entered into that certain Development Agreement dated _______________, 2013 (the “Development Agreement”), with respect to the real property located in the City of Santa Monica, State of California more particularly described in Exhibit “A” attached hereto (the “Project Site”). B. City has granted certain development approvals and permits with respect to the development of the Project Site, including without limitation, approval of the Development Agreement (collectively, the “Project Approvals”). C. Assignor intends to sell, and Assignee intends to purchase, Assignor’s interest in the Project Site. D. In connection with such purchase and sale, Assignor desires to transfer all of the Assignor’s right, title, and interest in and to the Development Agreement and the Project Approvals with respect to the Project Site. Assignee desires to accept such assignment from Assignor and assume the obligations of Assignor under the Development Agreement and the Project Approvals with respect to the Project Site. THEREFORE, the parties agree as follows: 1. Assignment. Assignor hereby assigns and transfers to Assignee all of Assignor’s right, title, and interest in and to the Development Agreement and the Project Approvals with respect to the Project Site. Assignee hereby accepts such assignment from Assignor. 1554FifthDAgmt.10013.KLK Final: November 26, 2013 135 2. Assumption. Assignee expressly assumes and agrees to keep, perform, and fulfill all the terms, conditions, covenants, and obligations required to be kept, performed, and fulfilled by Assignor under the Development Agreement and the Project Approvals with respect to the Project Site. 3. Effective Date. The execution by City of the attached receipt for this Agreement shall be considered as conclusive proof of delivery of this Agreement and of the assignment and assumption contained herein. This Agreement shall be effective upon its recordation in the Official Records of Los Angeles County, California, provided that Assignee has closed the transaction and the transfer of the real property interest in the Project Site has been completed. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates set forth next to their signatures below. “ASSIGNOR” “ASSIGNEE” 1554FifthDAgmt.10013.KLK Final: November 26, 2013 136 RECEIPT BY CITY The attached ASSIGNMENT AND ASSUMPTION AGREEMENT is received by the City of Santa Monica on this ___ day of ________________, ________. CITY OF SANTA MONICA ___________________________________ By: _______________________________ Planning Director 182381ORDINANCENO._ An ordinance authorizing the execution of a development agreement by and between the City of Los Angeles and Next Century Associates,LLC,relating to real property in the West Los Angeles Community Plan area and located at 2025 Avenue of the Stars,2030 Century Park West and 1220 West Constellation Boulevard. WHEREAS,the City Planning Commission on August 23,2012,approved and recommended that the City Council approve a development agreement by and between the City of Los Angeles and Next Century Associates,LLC,which final version is attached to Council File No.12-1580,by and between the City of Los Angeles and the Next Century Associates,LLC (Development Agreement),which Development Agreement is hereby incorporated by reference and which is hereby incorporated into the provisions of this ordinance;and WHEREAS,after due notice,the City Planning Commission and the City Council did conduct public hearings on this matter;and WHEREAS,pursuant to California Government Code Section 65864,et seq.,the City Planning Commission has transmitted to the City Council its findings and recommendations;and WHEREAS,the Development Agreement is in the public interest and is consistent with the City's General Plan and the West Los Angeles Community Plan;and WHEREAS,The City Council has reviewed and considered the Development Agreement and the findings and recommendations of the City Planning Commission. NOW,THEREFORE, THE PEOPLE OF THE CITY OF LOS ANGELES DO ORDAIN AS FOLLOWS: Section 1.The City Council finds,with respect to the Development Agreement, that: (a)It is consistent with the City's General Plan,policies and programs specified in the West Los Angeles Community Plan,and is compatible with the uses authorized in,and the regulations prescribed for,the zone in which the real property is located; (b)The intensity,building height and use set forth in the Development Agreement are permitted by,or are consistent with,the West Los Angeles Community Plan; (c)It will not be detrimental to the public health,safety and general welfare since it encourages the construction of a project that is desirable and beneficial to the public. 1 Furthermore,the Development Agreement specifically permits application to the project of rules and regulations under the Los Angeles Municipal Code Section 91.101.1 to 98.0605 relating to public health and safety; (d)It complies with all applicable City and State regulations governing development agreements;and (e)It is necessary to strengthen the public planning process and to reduce the public and private costs of development uncertainty. Sec.2.The City Council hereby approves the Development Agreement and authorizes and directs the Mayor to execute the Development Agreement in the name of the City of Los Angeles. 2 Sec.3.The City Clerk shall certify to the passage of this ordinance and have it published in accordance with Council policy,either in a daily newspaper circulated in the City of Los Angeles or by posting for ten days in three public places in the City of Los Angeles:one copy on the bulletin board located at the Main Street entrance to the Los Angeles City Hall;one copy on the bulletin board located at the Main Street entrance to the Los Angeles City Hall East;and one copy on the bulletin board located at the Temple Street entrance to the Los Angeles County Hall of Records. I hereby certify that this ordinance was passed by the Council of the City of Los Angeles,at its meeting of "JANt 5 20«... BY __~~~~-4 _ Deputy IJ:~.N 2 -1 2013Approved _ Mayor Approved as to Form and Legality CARMEN A.TRUTANICH,City Attorney BY~CL~i&v/LAURA CADO N HURD Deputy City Attorney Pursuant to Charter Section 559,I approve this ordinance on behalf of the City Planning Commission and recommend that it be adopted . December~,2012 Date /eJ.-5"-ICl--DG~~~QSG\~ Michael LoGrande Director of PlanningFileNo.CF No.12-1580 M:\RP-E\Laura Cadogan\ORDINANCES\Century Plaza DA Ordinance.DOC 3 DECLARATION OF POSTING ORDINANCE I,MARIA VIZCARRA,state as follows:I am,and was at all times hereinafter mentioned,a resident of the State of California,over the age of eighteen years,and a Deputy City Clerk of the City of Los Angeles,California. Ordinance No.182381 -Authorizing the execution of a development agreement by and between the City of Los Angeles and Next Century Associates,LLC located at 2025 Avenue of the Stars,2030 Century Park West and 1220 West Constellation Boulevard -a copy of which is hereto attached,was finally adopted by the Los Angeles City Council on January 15,2013,and under the direction of said City Council and the City Clerk,pursuant to Section 251 of the Charter of the City of Los Angeles and Ordinance No.172959,on January 28.2013 I posted a true copy of said ordinance at each of the three public places located in the City of Los Angeles,California,as follows: 1)one copy on the bulletin board located at the Main Street entrance to the Los Angeles City Hall;2) one copy on the bulletin board located at the Main Street entrance to the Los Angeles City Hall East; 3)one copy on the bulletin board located at the Temple Street entrance to the Los Angeles County Hall of Records. Copies of said ordinance were posted conspicuously beginning on January 28,2013 and will be continuously posted for ten or more days. I declare under penalty of perjury that the foregoing is true and correct. Signed this 28th day of January,2013 at Los Angeles,California. Ordinance Effective Date:March 9,2013 Rev.(2f21f06) Council File No.12-1580 DEVELOPMENT AGREEMEN1' by and between THE CITY OF LOS .ANGELES and NEX1~CENTURY ASSOCIATES,LLC dated as of DI<:VELOPMENT AGREEMENT T ABLE OF CONTENTS Page RECITALS 1 1.DEFINITIONS 2 l.I "Agreement"2 1.2 "Applicable Rules""2 1.3 "CEQA"2 1.4 "City",.""''''''''2 1.5 "City Agency":2 1.6 "City Council"2 1.7 "Conditions of Approval"3 1.8 "Developer"3 1.9 "Development Agreement Act"3 1.10 "Discretionary Action"3 1.11 "Effective Date"3 1.t2 "Fees';3 1.13 "FEIR"3 1.14 "General Plan"3 L 15 "Ministerial Permits and Approvals"3 1.16 "Mitigation Measures"3 1.17 "Parties",.3 1.18 "Party"3 1.19 "Planning Commission"4 1.20 "Planning Director"4 1.21 "Processing Fees"..,4 1.22 "Project"4 1.23 "Project Approvals",4 1.24 "Property",4 1.25 "Reserved Powers"5 1.26 "Term"5 1.27 "Vesting Tentative Tract Map"5 2.RECITALS OF PREMISES,PURPOSE ANTI INTENT..5 2.1 State Enabling Statute 5 2.2 City Procedures and Action c 6 2.2.1 City Planning Commission Action 6 2.2.2 City Council Action 6 2.3 Purpose of this Agreement ,6 2.3.1 Public Benefits ,7 2.3.2 Developer Objectives ,7 2.3.3 Mutual Objectives 7 2.4 Applicability of the Agreement 8 3.AGREEMENT AND ASSURANCES ,,..,,,8 3.1 Agreement and Assurance on the Part of Developer __,.,8 3.1.1 Project Development ,'__.,,,__..__.__8 3,1.2 Timing of Development ",____8 3.1.3 Additional Obligations of Developer as Consideration for this Agreement.As additional consideration for this Agreement, Property Owner shall provide the specific benefits below __.__8 3.1.3.1 Integration ofthe Project with Potential Subway Portal at Avenue of the Stars and Constellation Boulevard ______9 3.13.2 Additional Localized Community Benefits '..",,,..9 3.2 Agreement and Assurances on the Part of the City ":..9 3.2.1 Entitlement to Develop __,..,""'".__..,.,",..,","'9 3.2.2 Consistency in Applicable Rules ,,__.__""",,,..l 0 3.2.3 Changes in Applicable Rules "--__"10 3.2.3,1 Non-application of Changes in Applicable Rules ""1.0 3.2.3.2 Changes in Building and Fire Codes "..10 3.2.3.3 Changes Mandated by Federal or State Law __".."lO 3.2.4 Subsequent Development Review ----.____11 3.2.5 Effective Development Standards ,,,--11 3.2.6 Interim Use ..,__.,,__""..""..'..,11 3.2.7 Moratoria or Interim Control Ordinances __""11 3,2.8 Time Period of Tentative Tract Map and Project Approvals .1] 3 .2.9 Processing Fees ",,'""__,,______.."12 3 .2.10 Timeframes and Staffing for Processing and Review ______.12 3.2.11 Other Governmental Approvals ______12 4,ANNUAL REVIEW .__.."..__,.__"",,,__,,,'"12 4.1.Annual Review,"..,:""",,__12 4.2 Pre-Determination Procedure ",__"____"12 4.2.1 Special Review __,__..__,',12 4.3 Planning Director's Determination __,..,]3 4.4 Appeal By Developer ,,,13 4.5 Period to Cure Non-Compliance "13 4.6 Failure to Cure Non-Compliance Procedure ""__13 4.7 Termination or Modification of Agreement __"14 4.8 Reimbursement of Costs "",14 4.9 City's Rights and Remedies Against Developer.",14 5,DEFAULT PROVISIONS ,,__14 5.1 Default by Developer ,,',__"..14 5.1.1 Default ,,',__,.,,14 5,1.2 Notice of Default ,,,"""14 5,13 Failure to Cure Default Procedures "I5 5,1.4 Termination or Modification of Agreement..__,..__..15 5,2 Default by the City.""""'"""""""""""""'"""""""",..,"""""",15 5.2.1 Default ""15 5.2.2 Notice of Default 16 5.3 No Monetary Damages ",,16 6.MORTGAGEE RIGHTS 16 6.1 Encumbrances on the Property 16 6.2 Mortgagee Protection 16 6.3 Mortgagee Not Obligated 16 6.4 Request for Notice to Mortgage ""]7 6.5 Mortgagee's Time to Cure ",17 6.6 Disaffirmation 17 7.GENERAL PROVISIONS 17 7.1 Effective Date 17 7.2 Term ,17 7.3 Appeals to City Council ~:187.4 Enforced Delay;Extension of Time of Performance 18 7.5 Dispute Resolution 18 7.5.1 Dispute Resolution Proceedings 18 7.5.2 Arbitration ":18 7.5.2.1 Arbitration Procedures ""19 7.5.3 Extension of Term 19 7.5.4 Legal Action 19 7.5.5 Applicable Law 19 7.6 Amendments 19 7.7 Assignment ,"19 7.7.1 Conditions of Assignment 20 7.7.1.1 Written Notice of Assignment Required 20 7.7.1.2 Automatic Assumption of Obligations 20 7.7.2 Liability Upon Assignment 20 7.7.3 Release of Property Owner 20 7.7.4 Release of Property Transferee ,20 7.8 Covenants "21 7.9 Cooperation and Implementation .21 7.9.1 Processing 21 7.9.2 Other Governmental Permits 21 7.9.3 Cooperation in the Event of Legal Challenge 21 7.9.4 Relationship of the Parties .22 7.1.0 Indemnification 22 7.10.1 Obligation to Defend,Indemnify,and Hold Harmless 22 7.10.2 Defending The Project Approvals 22 7.10.3 Breach of Obligations 23 7.10.4 Cooperation """"23 7.10.5 Contractual Obligation ""23 7.10.6 Waiver of Right to Challenge 23 7.10.7 Survival 23 7.10.8 Preparation of Administrative Record "23 7.10.9 Deposit 24 7.11 Notices 24 7.12 Recordation 25 7.13 Constructive Notice and Acceptance _25 7.14 Successors and Assignees 25 7.15 Severability .,25 7.16 Time of Essence 26 7.17 Waiver.26 7.18 No Third Party Beneficiaries 26 7.19 Entire Agreement ,,26 7.20 Legal Advice;Neutral Interpretation;Headings,Table of Contents,and Index ,26 7.21 Counterparts ",26 DEVELOPMENT AGREEMENT This Development Agreement ("Agreement")is executed this day of ___~>20--,by and between the CITY OF LOS ANGELES,a municipal corporation ("City"),and NEXT CENTURY ASSOCIATES,LLC,a (the "Developer"),pursuant to California Government Code Section 65864 et seq.,and the implementing procedures of the City,with respect to the following: RECITALS WHEREAS,the City and the Developer recognize that the further development of the subject Property,as defined below,will create significant opportunities for economic growth in the City,the Southern California region and California generally; WHEREAS,the Developer wishes to obtain reasonable assurances that the project as defined below may be developed in accordance with the Project Approvals,as defined below, and the terms of this Agreement; WHEREAS,the Developer will implement public benefits above and beyond the necessary mitigation for the Project including benefits and other consideration as noted in Sections 2.3.I and 3.1.3; WHEREAS,this Agreement is necessary to assure the Developer that the Project will not be reduced in density,intensity or use or be subjected to new rules,regulations,ordinances or policies unless otherwise allowed by this Agreement; V/HEREAS,by entering into this Agreement,the City is encouraging the development of the Project as set forth in this Agreement in accordance with the goals and objectives of the City, while reserving to the City the legislative powers necessary to remain responsible and accountable to its residents; WHEREAS,the Developer intends to develop the roughly six (6)net acre site as legally described in Exhibit A,located at 2025 Avenue of the Stars,bounded by Constellation Boulevard to the northwest,Avenue of the Stars to the northeast,a high rise residential development to the southeast,and Solar Drive to the southeast (the "Property").The Property also includes a portion of 2030 Century Park West and 10220 West Constellation Boulevard.The Project consists of (i)preservation and rehabilitation of the existing Century Plaza Hotel located at the Property into 63 condominium units,394 hotel guest rooms,26,250 square feet of hotel meeting room/ballroom space,1,900 square feet of hotel retail space,14,100 square feet ofhoteI spa and fitness center space,and 9,100 square feet ofhote1 restaurant space;(ii)development of two 578- foot high buildings with 290 condominium units and 10 housekeeping units;and (iii)roughly 93,840 squaIe feet of non-Hotel,pedestrian serving retail and restaurant uses (the «Project").A portion of the Project would,encroach onto the neighboring property owned by Century City Garage Partners,L.P.Accordingly,the Developer has entered into an agreement with Century City Garage Partners,L.P to adjust the lot lines between the two parcels to enable possible development of the Project. WHEREAS,the Developer has entered into negotiations with UNITE HERE Local 11 regarding the status of workers at the Century Plaza Hotel during development of the Project and both patties have reached an agreement that addresses 1:1.nI011 concerns with regard to pay issues, job security and health benefit during renovations. WHEREAS,the Developer has also been negotiating a Project Labor Agreement with the Los Angeles/Orange County Building &Construction Trades Council and that agreement;while confidential,will ensure union trade workers are utilized during construction of the Project. VlHEREAS,for the foregoing reasons,the Parties desire to enter into a development agreement for the Project pursuant to the Development Agreement Act,as defined below,and the City's charter powers upon the tenus and conditions set forth herein. AGREEMENT NOW,THEREFORE,pursuant to the authority contained in the Development Agreement Act,as it applies to the City,and in consideration of the premises and mutual promises and covenants herein contained and other valuable consideration the receipt and adequacy of which the Parties hereby acknowledge,the Parties agree as follows: 1.DE:FINITIONS For all purposes of this Agreement,except as otherwise expressly provided or unless the context requires: 1.1 "Agreement"means this Development Agreement. 1.2 "A pplicable Rules"means the rules,regulations,ordinances and official policies of the City in force as of the Effective Date of this Agreement which are generally applicable to all or some properties within the City.Notwithstanding the language of this Section or any other language in this Agreement,all specifications,standards and policies regarding the design and construction of public works facilities,if any,shall be those that are in effect at the time the project plans are being processed for approval and/or under construction 1.3 "CEQA"means the California Environmental Quality Act (Cal.Public Resources Code Sections 21000 et seq.)and the State CEQA Guidelines (Cal.Code of Regs.,Title 14, Sections 15000 et seq.). 1.4 "City"means the City of Los Angeles,a charter city and municipal corporation. 1.5 "City Agency"means each and every agency,department,board,commission, authority,employee,and/or official acting under the authority of the City,including without limitation the City Council and the Planning Commission. 1.6 "City Council"means the City Council of the City and the legislative body of the City pursuant to Section 65867 of the California Government Code (Development Agreement Act). 2 1.7 "Conditions of Approval"means the Conditions of Approval for the Project, including,but not limited to,any conditions associated with the Project Approvals,and attached hereto as Exhibit B ,Conditions of Approval. 1.8 "Developer"has the meaning as described in the opening paragraph of this Agreement 1.9 "Development Agreement Act"means Article 2.5 of Chapter 4 of Division 1 of Title 7 (Sections 65864 through 65869.5)of the California Government Code. 1.10 "Discretionary Action"means an action which requires the exercise of judgment,deliberation or a decision on the part of the City and/or any City Agency,including any board,commission or department or any officer or employee thereof in the process of approving or disapproving a particular activity,as distinguished from an activity which merely requires the City and/or any City Agency,including any board,commission or department or any officer or employee thereof,to determine whether there has been compliance with statutes, ordinances or regulations. 1.11 "Effective Date"has the meaning set forth in Section 7.1 below. 1.12 "Fees"means Impact Fees,Processing Fees and any other fees or charges imposed or collected by the City. 1.13 "FEIR'~means the Final Environmental Impact Report for the Project,State Clearinghouse No.2009061084,certified by the City in accordance with the requirements of CEQA. 1.14 "General Plan"means the General Plan of the City. 1.15 "Ministerial Permits and Approvals"me3J1S the permits,approvals,plans, inspections,certificates,documents,licenses,and all other actions required to be taken by the City in order for Developer to implement,develop and construct the Project and the Mitigation Measures,including without limitation,building permits,foundation permits,public works permits,grading permits,stockpile permits,encroachment permits,and.other similar penn its and approvals which are required by the Los Angeles Municipal Code and project plans and other actions required by the Project Approvals to implement the Project and the Mitigation Measures. Ministerial Permits and Approvals shall not include any Discretionary Actions. 1.16 "Mitigation Measures"means the mitigation measures described in the FEIR and in the Mitigation Monitoring Program for the Project which is attached hereto as Exhibit C, Mitigation Monitoring Program. 1.17 "Parties"means collectively the Developer and the City. 1.18 "Party"means anyone of the Developer or the City. 3 1.19 "Planning Commission"means the City Planning Commission and the planning agency of the City pursuant to Section 65867 of the California Government Code (Development Agreement Act). 1.20 "Planning Director"means the Planning Director for the City. 1.21 "Processing Fees"means all processing fees and charges required by the City or any City Agency including,but not limited to,fees for land use applications;project permits, building applications,building permits,grading permits,encroachment permits,tract or parcel maps,lot line adjustments,air right lots,street vacations and certificates of occupancy which are necessary to accomplish the intent and purpose of this Agreement.Expressly exempted from Processing Fees are all linkage fees or exactions which may be imposed by the City on development projects pursuant to laws enacted after the Effective Date of this Agreement,except as specifically provided for in.this Agreement.Processing Fees include those linkage fees, impact fees and exactions which are in effect as of the Effective Date,the amounts of which are subject to ongoing annual increases which shall be calculated at time of payment.The amount of the Processing Fees to be applied in connection with the development of the Project shall be the amount which is in effect on a City-wide basis at the time an application for the City action is made,unless an alternative amount is established by the City in a subsequent agreement 1.22 "Project"means development of an integrated mixed-use development on the Property as described in the legal description attached as Exhibit "A"and as ultimately described in the Project Approvals,that provides a combination of hotel,residential,commercial,and ground-level retail and restaurant uses.More specifically,the Project consists of 0)preservation and rehabilitation of the existing Century Plaza Hotel located at the Property into 63 condominium units,394 hotel guest rooms,26,250 square feet of hotel meeting room/ballroom space,1,900 square feet of hotel retail space,14,]00 square feet of hotel spa and fitness center space,and 9,100 square feet of hotel restaurant space;(ii)development of two 578-foot high buildings with 290 condominium units and 10 housekeeping units;and (iii)roughly 93,840 square feet of non-Hotel,pedestrian serving retail and restaurant uses. 1.23 "Project Approvals"means those Discretionary Actions authorizing the Project which have been approved by the City on or before the Effective Date (irrespective of their respective effective dates)including,but not limited,to (1)certification of the EIR,(2)Project Permit Compliance,(3)Development Agreement,(4)Plan Approval to an Existing Conditional Use Permit to allow for the relocation of a wireless telecorn facility,(5)A Master Conditional Use Permit (or various Conditional Use Permits)for the sale or dispensation of alcoholic beverages at several locations at the Project Site for on and off-site consumption,(6)a Zoning Administrator's Adjustment to establish O-foot yards around the Project Site,(7)Approval of a Miscellaneous Entitlement for relocation of the Pedestrian Corridor (pursuant to the Century City North Specific Plan Section 10.B.9),(8)Conditional Use Permit or Plan Approval to a deemed approved Conditional Use Permit to allow hotel use within 500 feet of a residential zone, (9)Vesting Tentative Tract Map #71688 (with haul route approval),and (10)Site Plan Review approval. 1.24 "Property"has the meaning in the sixth recital above and as fully described in the legal description attached as Exhibit "A". 4 1.25 "Reserved Powers"means the lights and authority excepted from this Agreement's restrictions on the City's police powers and which are instead reserved to the City. The Reserved Powers include the powers to enact regulations or take future Discretionary Actions after the Effective Date of this Agreement that may be in conflict with the Applicable Rules and Project Approvals,but (1)are necessary to protect the public health and safety,and are generally applicable on a City-wide basis (except in the event of natural disasters as found by the City Council such as floods,earthquakes and similar acts of God);(2)are amendments to Chapter IX of the Los Angeles Municipal Code 91.0101 et.seq.(Building Code)or Chapter V of the Los Angeles Municipal Code,Section 57.0101 et.seq.(Fire Code)regarding the construction,engineering and design standards for private and public improvements and which are (a)necessary to the health and safety of the residents of the City,and (b)are generally applicable on a Citywide basis (except in the event of natural disasters as found by the Mayor or City Council such as floods>earthquakes,and similar acts of God);(3)are necessary to comply with state or federal laws and regulations (whether enacted previous or subsequent to the Effective Date of this Agreement)as provided in Section 3.2.3.3 or;(4)constitute Processing Fees and charges imposed or required by the City to cover its actual costs in processing applications,permit requests and approvals of the Project or in monitoring compliance with permits issued or approvals granted for the performance of any conditions imposed on the Project,unless otherwise waived by the City. 1.26 "Term"means the period of time for which this Agreement shall be effective in accordance with Section 7.2 hereof. 1.27 "Vesting Tentative Tract Map"means Vesting Tentative Tract Map Nos. 71688 approved by the City on August 1,2012,and which became final on August 13,2012, after expiration of the ten (10)day appeal period set forth in the Los Angeles Municipal Code. 2.RECITAI-S OF PREMISES,PURPOSE AND INTENT 2.1 State Enabling Statute.To strengthen.the public planning process,encourage private participation in comprehensive planning and reduce the economic risk of development, the Legislature of the State of California adopted the Development Agreement Act,which authorizes any city to enter into binding development agreements establishing certain development rights in real property with persons having legal or equitable interests in such property.Section 65864 of the Development Agreement Act expressly provides as follows: «The Legislature finds and declares that: "(a)The lack of certainty in the approval of development projects can result in a waste of resources,escalate the cost of housing and other development to the consumer,and discourage investment in and a commitment to comprehensive planning which would make maximum efficient utilization of resources at the least economic cost to the public.. (b)Assurance to the applicant for a development project that upon approval of the project,the applicant may proceed with 5 the project in accordance with existing policies,rules and regulations,and subject to conditions of approval will strengthen the public planning process,encourage private participation in comprehensive planning,and reduce the economic cost of development." Notwithstanding the foregoing,to ensure that the City remains responsive and accountable to its residents while pursuing the benefits of development agreements contemplated by the Legislature,the City:(l)accepts restraints on its police powers contained in development agreements only to the extent and for the duration required to achieve the mutual objectives of the parties;and (2)to offset such restraints,seeks public benefits which go beyond those obtained by traditional City controls and conditions imposed on development project applications. 2.2 City Procedures and Actions. 2.2.1 City Planning Commission Action.The City Planning Commission held a duly-noticed public hearing and recommended approval of this Agreement on August 23,2012. 2.2.2 City Council Action.The City Council on ,after conducting a duly-noticed public hearing,adopted Ordinance No.__,"__,to become effective on.the thirty-first day after publication,or on the forty-first day after posting,approving this Agreement, found that its provisions are consistent with the City's General Plan,the West Los Angeles Community Plan,the Century City North Specific Plan,the West Los Angeles Transportation Improvement and Mitigation Specific Plan,and the Municipal Code,and authorized the execution of this Agreement. 2.3 Purpose of this Agreement. 2.3.1 Public Benefits.This Agreement provides assurances that the Public Benefits identified below will be achieved and developed in accordance with the Applicable Rules and Project Approvals and with the terms of this Agreement and subject to the City'S Reserved Powers.The Project will provide local and regional Public Benefits to the City, including without limitation (i)development of an integrated,mixed-use project in close proximity to major existing and planned transit lines;(ii)the creation of permanent and construction related employment opportunities;(iii)creation of a publicly accessible plaza enhanced with extensive landscaping,multiple water features and high-quality hardscape materials;(iv)preservation and rehabilitation of the existing Hotel,as described in greater detail in Section 3.1.3.l below;(v)utilization of a variety of green building elements,including but not limited to,use of 'efficient water management techniques,green roofs and other sustainability features equivalent to a LEED®Silver rating;(vi)increased revenues to the City in the form of increased sales,transit occupancy,documentary transfer,business license and property taxes; and (vii)support for community efforts to control traffic and promote public art as described in greater detail in Section 3.1.3.3 below. 2.3.2 Developer Objectives.In accordance with the legislative findings set forth in the Development Agreement Act,and with full recognition of the City's policy of judicious restraints on its police powers,the Developer wishes to obtain reasonable assurances 6 that the Project may be developed in accordance with the Applicable Rules and Project Approvals and with the terms of this Agreement and subject to the City's Reserved Powers.In the absence of this Agreement,Developer would have no assurance that it can complete the Project for the uses and to the density and intensity of development set forth in this Agreement and the Project Approvals.This Agreement,therefore,is necessary to assure Developer that the Project will not be (1)reduced or otherwise modified in density,intensity or use from what is set forth in the Project Approvals;(2)subjected to new rules,regulations,ordinances or official policies or plans which are not adopted or approved pursuant to the City's Reserved Powers;or (3)SUbjected to delays for reasons other than Citywide health and safety enactments related to critical situations such as,but not limited to,the lack of water availability or sewer or landfill capacity. 2.3.3 Mutual Objectives,Development of the Project in accordance with this Development Agreement will provide for the orderly development of the Property in accordance with the objectives set forth in the General Plan.Moreover,a development agreement for the Project will eliminate uncertainty in planning for and securing orderly development of the Property,assure installation of necessary improvements,assure attainment of maximum efficient resource utilization within the City at the least economic cost to its citizens and otherwise achieve the goals and purposes for which the Development Agreement Act was enacted.The Parties believe that such orderly development of the Project will provide Public Benefits,as described in Section 2.3.1 and 3.1.3,to the City through the imposition of development standards and requirements under the of this Agreement,including without limitation:increased tax revenues,installation of on-site and off-site improvements,creation and retention of jobs, development of an aesthetically attractive regional commercial center with a mix of complementary uses in direct proximity to public transit.Additionally,although development of the Project in accordance with this Agreement will restrain the City's land use or other relevant police powers,this Agreement provides the City with sufficient reserved powers during the Term hereof to remain responsible and accountable to its residents.In exchange for these and other benefits to City,the Developer will receive assurance that the Project may be developed during the Term of this Agreement in accordance with the Applicable Rules,Project Approvals and Reserved Powers,subject to the terms and conditions of this Agreement. 2.4 Applicability of the Agreement.This Agreement does not (1)grant height, density or intensity in excess of that otherwise established in the Applicable Rilles and Project Approvals;(2)eliminate future Discretionary Actions relating to the Project if applications requiring such Discretionary Action are initiated and submitted by the owner of the Property after the Effective Date of this Agreement;(3)guarantee that Developer will receive any profits from the Project;(4)prohibit the Project's participation in any benefit assessment district that is generally applicable to surrounding properties;or (5)amend the City'S General Plan.This Agreement has a fixed TelID.Furthermore,in any subsequent actions applicable to the Property, the City may apply such new rules,regulations and official policies a'>are contained in its Reserved Powers. 3.AGREEMENT AND ASSURANCES 3.1 Agreement and Assurance on the Part of Developer.In consideration for the City entering into this Agreement,and as an inducement for the City to obligate itself to carry 7 out the covenants and conditions set forth in this Agreement,and in order to effectuate the premises,purposes and intentions set forth in Section 2.3 of this Agreement,Developer hereby agrees as follows: 3.1.1.Project Development.Developer agrees that it will use commercially reasonable efforts,in accordance with its own business judgment and taking into account market conditions and economic considerations,to undertake development of the Project in accordance with the terms and conditions of this Agreement,including the Applicable Rules and the Project Approvals. 3.1.2.Timing of Development.The parties acknowledge that Developer cannot at this time predict when or at what rate the Property would be developed,Such decisions depend upon numerous factors which ate not all within the control of Developer.such as market orientation and demand,availability of financing,interest rates and competition.Because the California Supreme COUlt held in Pardee Constrllction Co.v,City of Camarillo,37 Cal.3d 465 (1984),that the failure of the parties therein to provide for the timing of development permitted a later adopted initiative restricting the timing of development and controlling the Parties' agreement,Developer and the City do hereby acknowledge that Developer has the right to develop the Project in an order and at a.rate and times as Developer deems appropriate within the exercise of its sole and subjective business judgment,subject to any restrictions that may exist in the Project Approvals.The City acknowledges that this right is consistent with the intent, purpose and understanding of the Parties to this Agreement. 3.1.3.Additional Obligations of Developer as Consideration for this Agreement.As additional consideration for this Agreement,Property Owner shall provide the specific benefits listed below. 3.1.3.1 Integration of the Project with Potential Subway Portal at Avenue of the Stars and Constellation Boulevard.The Los Angeles County Metropolitan Transportation Authority ("MetTo")is considering building a subway station at the corner of Avenue ofthe Stars and Constellation Boulevard as part of the nine mile extension of the Metro Purple Line from the Wilshire/Western station to the WestwoodIV A Hospital (the "Station"), Prior to issuance of a building permit,the Developer shall provide,at no cost to Metro,an irrevocable offer to dedicate a .subterranean easement to Metro to accommodate the Station and an in-evocable offer to dedicate an above-grade easement for an associated Station shelter.In the event Metro selects the Property for the location of the future Station,the Developer shall then grant a subterranean easement to Metro to accommodate the Station and an above-grade easement to Metro for the shelter.The precise location of the easement shall be determined by agreement between the Developer,Metro,the Department of City Planning and the Department of Transportation,The Developer shall be responsible for costs associated with preparation of the easement related documents,including the legal description. 3.1.3.2 Additional Localized Community Benefits As additional consideration for this Agreement,within ten (l0)days prior to issuance of a building permit for construction of the Project,the Developer will 0)pay $25,000 each year for a period of five years to fund marketing and promotional efforts for the Century City Transportation Management Organization;(ii)deposit $125,000 in a private escrow account (the California 8 Community Foundation Fund FS08 "Council District 5 Regional Transportation,Plann-ing and Traffic Fund")for the purpose of funding a traffic study that (1)analyzes vehicular movements within the vicinity of the Century City community and (2)identifies potential feasible traffic calming measures;(iii)deposit $50,000 into the Board of Public Works Trust Fund "Santa Monica Boulevard Alleys Project"(established by Council File 10-0473-S1)for the purpose of repairing alleys within the vicinity of Century City;and (iv)deposit $100,000 into the Department of Transportation's Local Match Fund entitled "Century City Pedestrian Connection Project"for the purpose of supporting and advancing the Century City Greening Plan.For the avoidance of doubt,permits pulled in the ordinary COUI'seof operations of the existing Hotel at the Property shall not be deemed "building permits"that trigger payment or fulfillment of these localized community benefit commitments. 3.2 Agreement and Assurances on the Part of the City.In consideration for Developer entering into this Agreement,and as an inducement for Developer to obligate itself to carry out the covenants and conditions set forth in this Agreement,and in order to effectuate the premises,purposes and intentions set forth in Section 2.3 of this Agreement,the City hereby agrees as follows: 3.2.1 Entitlement to Develop.Developer has the vested right to develop the Project subject to the terms and conditions of this Agreement,the Applicable Rules,Project Approvals and the Reserved Powers,Developer's vested rights under this Agreement shall include,without limitation,the right to remodel,renovate,rehabilitate,rebuild or replace the Project or any portion thereof throughout the applicable Term for any reason,including,without limitation,in the event of damage,destruction or obsolescence of the Project 01'any portion thereof,subject to the Applicable Rules,Project Approvals and Reserved Powers,To the extent that all or any portion of the Project is remodeled,renovated,rehabilitated,rebuilt or replaced, Developer may locate that portion of the Project at any other location of the Property,subject to the requirements of the Project Approvals,the Applicable Rules,and the Reserved Powers. 3.2.2 Consistency in Applicable Rules.Based upon all information made available to the City up to or concurrently with the execution of this Agreement,the City finds and certifies that no Applicable Rules prohibit or prevent or encumber the full completion and occupancy of the Project in accordance with the uses,intensities,densities,designs and heights, permitted demolition,and other development entitlement"incorporated and agreed to herein and. in the Project Approvals, 3.2.3 Changes in Applicable Rules. 3.2.3.1 Non-application of Changes in Applicable Rules.Any change in,or addition to,the Applicable Rules,including,without limitation,any change in any applicable general plan,zoning or building regulation,adopted or becoming effective after the Effective Date of this Agreement,including,without limitation,any such change by means of ordinance,including,but not limited to adoption of a specific plan or overlay zone,City Charter amendment,initiative,referendum,resolution,motion,policy,order or moratorium,initiated or instituted for any reason whatsoever and adopted by the City,the Mayor,City Council,Planning Commission or any other Board,Commission,Department or Agency of the City,or any officer or employee thereof,01'by the electorate,as the case may be,which would,absent this 9 Agreement,otherwise be applicable to the Project and which would conflict in any way with the Applicable Rules,Project Approvals,or this Agreement,shall not be applied to the Project unless such changes represent an exercise of the City's Reserved Powers,or are otherwise agreed to in this Agreement.Notwithstanding the foregoing,Developer may,in its sole discretion,give the City written notice of its election to have any subsequent change in the Applicable Rules applied to some portion or all of the Property as it may own,in which case such subsequent changes in the Applicable Rules shall be deemed to be contained within the Applicable Rules insofar as that portion of the Property is concerned.In the event of any conflict or inconsistency between this Agreement and the Applicable Rules,the provisions of this Agreement shall control. 3.2.3.2 Changes in Building and Fire Codes.Notwithstanding any provision of this Agreement to the contrary,development of the Project shall be subject to changes which may occur from time to time in the California Building Code .and other uniform construction codes.In addition,development of the Project shall be subject to changes occurring from time to time in Chapters V and IX of the Municipal Code regarding the construction,engineering and design standards for both public and private improvements provided that these changes are (1)necessary to the health and safety of the residents of the City, and (2)are generally applicable on a Citywide basis (except in the event of natural disasters as found by the Mayor or City Council,such as Hoods,earthquakes and similar disasters). 3.2.3.3 Changes Mandated by Federal or State Law.This Agreement shall not preclude the application to the Project of changes in,OI additions to,the Applicable Rules,including rules,regulations,ordinances and official policies,to the extent that such changes or additions are mandated to be applied to developments such as this Project by state or federal regulations,pursuant to the Reserved Powers.In the event state or federal laws or regulations prevent or preclude compliance with one or more provisions of this Agreement, such provisions shall be modified or suspended as may be necessary to comply with such state or federal laws or regulations. 3.2.4 Subsequent Development Review.The City shall not require Developer to obtain any approvals or permits [or the development of the Project in accordance with this Agreement other than those permits or approvals which are required by the Applicable Rules,the Reserved Powers and/or the Project Approvals.Any subsequent Discretionary Action initiated. by Developer which substantially changes the entitlements allowed under the Project Approvals, shall be subject to rules,regulations,ordinances and official policies of the City then in effect. The parties agree that this Agreement does not modify,alter or change the City's obligations pursuant to CEQA and acknowledge that future Discretionary Actions may require additional environmental review pursuant to CEQA.In the event that additional environmental review is required by CEQA,the City agrees to utilize tiered environmental documents to the fullest extent permitted by law,as determined by the City,and as provided in California Public Resources Code Sections 21093 and 21094. 3.2.5 Effective Development Standards.The City agrees that it is bound to permit the uses,intensity of use and density on this Property which are permitted by this Agreement and tile Project Approvals,insofar as this Agreement and the Project Approvals so provide or as otherwise set forth in the Applicable Rules or the Reserved Powers, 10 3.2.6 Interim Usc.The City agrees that Developer may use the Property during the term of this Agreement for any use which is otherwise permitted by the applicable zoning regulations and the General PIan in effect at the time of the interim use,except as expressly provided in this Development Agreement,or pursuant to any approvals,permits,other agreements between the City and Developer,or other entitlements previously granted and in effect as of the Effective Date. 3.2.7 Moratoria or Interim Control Ordinances.In the event an ordinance, resolution,policy,or other measure is enacted,whether by action of the City,by initiative,or otherwise,which relates directly or indirectly to the Project or to the rate,amount,timing, sequencing,or phasing of the development or construction of the Project on all or any part of the Property,City agrees that such ordinance,resolution or other measure shall not apply to the Property or this Agreement,unless such changes (1)are found by the City to be necessary to the public health and safety of the residents of the City,and (2)are generally applicable on a Citywide basis except in the event of natural disasters as found by the Mayor or the City Council, such as floods,earthquakes and similar disasters. 3.2.8 Time Period of Tentative Tract Map and Project Approvals.The City acknowledges that the construction of the Project may be subject to unavoidable delays due to the factors outside the Developer's control.Pursuant to California Government Code Sections 66452_6(a),and any other applicable provision of the Subdivision Map Act,the City agrees that the duration of the Vesting Tentative Tract Map and any new tract or parcel map which are consistent with the Project Approvals,shall automatically be extended for the Term of this Agreement The City further agrees that the duration of the Project Approvals shall automatically be extended for the Term of the Agreement 3.2.9 Processing Fees.Developer shall pay all Processing Fees for Ministerial Permits and Approvals. 3.2.10 Timeframes and Staffing for Processing and Review.The City agrees that expeditious processing of Ministerial Permits and Approvals and Discretionary Actions,if any,and any other approvals or actions required for the Project are critical to the implementation of the Project.In recognition of the importance of timely processing and review of Ministerial Permits and Approvals,the City agrees to work with Developer to establish time frames for· processing"and reviewing such Ministerial Permits and Approvals,and to comply with timeframes established in the Project Approvals.The City agrees to expedite all Ministerial Permits and Approvals and Discretionary Actions requested by Developer,if any. 3.2.11 Other Governmental Approvals.Developer may apply for such other permits and approvals as may be required for development of the Project in accordance with the provisions of this Agreement from other governmental or quasi-governmental agencies having jurisdiction over the Property.The City shall reasonably cooperate with Developer in its endeavors to obtain such permits and approvals,Each Party shall take all reasonable actions and execute,with acknowledgment or affidavit,if required,any and all documents and writings that may be reasonably necessary or proper to achieve the purposes and objectives of this Agreement. 11 4,ANNUAL REVIEW 4.1 Annual Review.During the Term of this Agreement,the City shall review annually Developer's good faith compliance with this Agreement by Developer and/or any Transferee.This periodic review shall be limited in scope to good faith compliance with the provisions of this Agreement as provided in the Development Agreement Act and Property Owner,and/or any Transferee shall have the burden of demonstrating such good faith compliance relating solely to such parties'portion of the Property and any development located thereon.The Annual Review shall be in the form of an Annual Report prepared and SUbmitted by the Planning Director.The Report shall include the number,type and square footage of and the status of the Project;the total number of parking spaces developed;provisions for open space;status of activities relating to streetscape improvements;summary of performance of Property OV\T11er'sobligations. 4.2 Pre-Determination Procedure.Submission by Developer,and/or.Transferee,of evidence of compliance with this Agreement,in a form which the Planning Director may reasonably establish,shall be made in writing and transmitted to the Planning Director not later than sixty (60)days prior to the yearly anniversary of the Effective Date.If the public has comments regarding compliance,such comments must be submitted to the Planning Director at least sixty (60)days prior to the yearly anniversary of the Effective Date.All such public comments and final staff reports shall,upon receipt by the City,be made available as soon as possible to Developer and/or any Transferees. 4.2.1 Special Review.The City may order a special review of compliance with this Agreement upon reasonable evidence of materia]non-compliance with the terms of this Agreement. 4.3 Planning Directors Determination.On or before the yearly anniversary of the Effective Date of the Agreement,the Planning Director shall make a determination regarding whether or not Developer has complied in good faith with the provisions and conditions of this Agreement This determination shall be made in writing with reasonable specificity,and a copy of the determination shall be provided to Developer or Transferee in the manner prescribed in Section 7.13_ 4.4 Appeal by Developer.Inthe event the Planning Director makes a finding and determination of non-compliance,Developer,and/or any Transferee as the case may be,shall be entitled to appeal that determination to the Planning Commission.After a public hearing on the appeal,the Planning Commission shall make written findings and determinations,on the basis of substantial evidence,whether or not Developer,and/or any Transferee as the case may be,has complied in good faith with the provisions and conditions of this Agreement.A finding and determination of compliance by the Planning Commission shall be final and effective as provided in Charter Section 245.Nothing in this Agreement shall be construed as modifying or abrogating Los Angeles City Charter Section 245 (City Council review of Commission and Board actions). 4.5 Period to Cure Non-Compliance.If,as a result of this Annual Review procedure,it is found and determined by the Planning Director or the Planning Commission,or 12 City Council on appeal,that Developer and/or any Transferee,as the case may be,has not complied in good faith with the provisions and conditions of this Agreement,the City,after denial of any appeal Of,where no appeal is taken,after the expiration of the appeal period described in Section 7.3,shall submit to Developer,by registered or certified mall,return receipt requested,a written notice of non-compliance in the manner prescribed in Section 7.13,stating with specificity those obligations of Developer which have not been performed.Upon receipt of the notice of non-compliance,Developer and/or any Transferee,as the case may be,shall promptly commence to cure the identified items of non-compliance at the earliest reasonable time after receipt of the notice of non-compliance and shall complete the cure of such items of non-compliance not later than sixty (60)days after receipt of the notice of non-compliance,or such longer period as is reasonably necessary to remedy such items of non-compliance,by mutual consent of the City and Developer provided that Developer shall continuously and diligently pursue the remedy at all times until the item of non-compliance is cured. 4.6 Failure to Cure Non-Compliance Procedure.rr the Planning Director finds and determines that Developer,or a Transferee has not cured an item of non-compliance pursuant to this Section,and that the City intends to terminate or modify this Agreement or those transferred or assigned rights and obligations,as the case may be,the Planning Director shall make a report to the Planning Commission.The Planning Director shall then set a date for a public hearing before the Planning Commission in accordance with the notice and hearing requirements of Government Code Sections 65867 and 65868.If after such public hearing,the Planning Commission finds and determines,on the baSIS of substantial evidence,that (i)Developer or its Transferee has not cured a default pursuant to this Section,and (ii)that the City may terminate or modify this Agreement,or those transferred or assigned rights and obligations,as the case may be,the finding and determination shall be appealable to the City Council in accordance with Section 7.3 hereof.In the event of a finding and determination of compliance,there shall be no appeal by any person or entity.Nothing in this Section or this Agreement shall be construed as modifying or abrogating Los Angeles City Charter Section 245 (City Council's review of Commission and Council actions). 4.7 Termination or Modification of Agreement.The City may terminate or modify this Agreement,or those transferred or assigned rights and obligations,as the case may be,after a finding or determination of noncompliance by the City Council or,where no appeal is taken, after tile expiration of the appeal periods described in Section 7.3.There shall be no modifications of this Agreement unless the City Council acts pursuant to Government Code Sections 65867.5 and 65868,irrespective of whether an appeal is taken as provided in Section 7.3. 4.8 Reimbursement of Costs.Developer shall reimburse the City for its actual costs, reasonably and necessarily incurred,to accomplish the required annual review. 4.9 City's Rights and Remedies Against Developer.The City's rights in Section 4 of this Agreement relating to compliance with this Agreement by Developer shall be limited to only those rights and obligations assumed by Developer under this Agreement and as expressly set forth in the applicable Assignment Agreement authorized by Section 7.8 of this Agreement. 13 5.Dl<:FAULTPROVISIONS S.l Default by Developer. S.1.A Default.In the event Developer or a Transferee of any portion of the Property fails to perform its obligations under this Agreement applicable to its portion of the Property as specified in the applicable Assignment Agreement,in a timely manner and in compliance pursuant to Section 4 of this Agreement,the City shall have all rights and remedies provided for in this Agreement,including without limitation,modifying or terminating this Agreement,shall relate exclusively to the defaulting Party and such defaulting Party's portion of the Property,provided that the City has first complied with all applicable notice and opportunity to cure provisions in Section 5.1.2 and given notice as provided in Section 4.3 hereof,and provided further that Developer may appeal such declaration in the manner provided in,and subject to all tenus and provisions of,Sections 4.4 and 4.5.In no event shall a default by a Developer or a Transferee of any portion of the Property constitute a default by any non-. defaulting Developer or a Transferee with respect to such non-defaulting parties'obligations hereunder nor affect such non-defaulting parties>rights hereunder,or respective portion of the Property. 5.1.2 Notice of Default.The City,through the Planning Director,shall submit to Developer or Transferee,as applicable,by registered or certified mail,return receipt requested,a written notice of default in the manner prescribed in Section 7.13,identifying with specificity those obligations of Developer or Transferee,as applicable,which have not been performed.Upon receipt of the notice of default,Developer or Transferee shall promptly commence to cure the identified default(s)at the earliest reasonable time after receipt of the notice of default,and shall complete the cure of the default(s)not later than sixty (60)days after receipt of the notice of default,or a longer period as is reasonably necessary to remedy the defaulus),provided that Developer or Transferee,as applicable,shall continuously and diligently pursue the remedy at all times until the defaultts is cured.In the case of a dispute as to whether Developer has cured the default,the Parties shall submit the matter to dispute resolution pursuant to Section 7.6 of this Agreement. 5.1.3 Failure to Cure Default Procedures.If after the cure period has elapsed (Section 4.5),the Planning Director finds and determines that Developer,or its Transferees, successors,andlor assignees,as the case may be,remains in default and that the City intends to terminate or modify this Agreement,or those transferred or assigned rights and obligations,as the case may be,the Planning Director shall make a report to the Planning Commission and then set a public hearing before the Commission in accordance with the notice and hearing requirements of Government Code Sections 65867 and 65868.If after public hearing,the Planning Commission finds and determines,on the basis of substantial evidence,that Developer, or its Transferees,successors,and/or assigns,remains in default and that the City intends to terminate or modify this Agreement,or those transferred or assigned right and obligations,as the case may be,the Developer and its Transferees,successors,and/or assigns,shall be entitled to appeal that finding and determination to the City Council in accordance with Section 7.3.In the event of a finding and determination that all defaults are cured,there shall be no appeal by any person OJ entity.Nothing in this Section or this Agreement shall be construed as modifying or 14 abrogating Los Angeles City Charter Section 245 (City Council review of Commission and Board actions). 5.1.4 Termination or Modification of Agreement,The City may terminate or modify this Agreement or those transferred Of assigned rights and obligations,as the case may be,relating solely to the defaulting Developer or Transferee and such defaulting party's portion of the Property after such final determination of the City Councilor,where no appeal is taken, after the expiration of the appeal periods described in Section 7.3 relating to the defaulting party's rights and obligations,There shall be no termination or modification of this Agreement unless the City Council acts pursuant to Section 7.3. 5.2 Default by the City. 5.2.1 Default.111 the event the City does not accept,process,or render a decision on necessary development permits,entitlements,or other land useor building approvals for use as provided in this Agreement upon compliance with the requirements thereof,or as otherwise agreed to by the Parties,or the City otherwise defaults under the provisions of this Agreement,Developer and Transferee shall have all rights and remedies provided herein or by applicable law,which shall include compelling the specific performance of the City's obligations under this Agreement provided that Developer or Transferee,as the case may be,has first complied with the procedures in Section 5.2.2.No part of this Agreement shall be deemed to abrogate or limit any immunities or defenses the City may otherwise have with respect to claims for monetary damages. 5.2,2 Notice of Default,Developer or Transferee,as the case may be,shall first submit to the City a written notice of default stating with specificity those obligations which have not been performed.Upon receipt of the notice of default,the City shall promptly commence to cure the identified defaulus)at the earliest reasonable time after receipt of the notice of default and shall complete the cure of such default(s)not later than one hundred and twenty (120)days after receipt of the notice of default,or such longer period as is reasonably necessary to remedy such defaulus),provided that the City shall continuously and diligently pursue the remedy at all times until such default(s)is cured.In the case of a dispute as to whether the City has cured the default,the Parties shall submit the matter to disputeresolution pursuant to Section 7.6 of this Agreement. 15 5.3 No Monetary Damages,It is acknowledged by the Parties that the City would not have entered into this Agreement if it were liable in monetary damages under or with respect to this Agreement or the application thereof.The Parties agree and recognize that,as a practical matter,it may not be possible to determine an amount of monetary damages which would adequately compensate Developer for its investment of time and financial resources in planning to arrive at the kind,location,intensity of use,and improvements for the Project,nor to calculate the consideration the City would require to enter into this Agreement to justify the exposure. Therefore,the Parties agree that each of the Parties may pursue any remedy at law or equity available for any breach of any provision of this Agreement,except that the Parties shall not be liable in monetary damages and the Parties covenant not to sue for or claim any monetary damages for the breach of any provision of this Agreement. 6.MORTGAGEE RIGHTS 6.1 Encumbrances on the Property.The Parties hereto agree that this Agreement shall not prevent or limit the Developer from encumbering the Property or any estate or interest therein,portion thereof,or any improvement thereon,in any manner whatsoever by one or more mortgages,deeds of trust,sale and leaseback,or other form of secured financing ("Mortgage") with respect to the construction,development,use or operation of the Project and parts thereof. The Planning Department acknowledges that the lender(s)providing such Mortgages may require certain Agreement interpretations and modifications and agrees,upon request,from time to time;to meet with the Developer and representatives of such.lender(s)to negotiate in good faith any such request for interpretation or modification.The Planning Department will not unreasonably withhold its consent to any such requested interpretation or modification,provided such interpretation or modification is consistent with the intent and purposes of this Agreement. 6.2 Mortgagee Protection.To the extent legally permissible,this Agreement shan be superior and senior to any lien placed upon the Property,or any portion thereof,including the lien of any Mortgage.Notwithstanding the foregoing,no breach of this Agreement shall defeat, render invalid,diminish,or impair the lien of any Mortgage made in good faith and for value. Any acquisition or acceptance of title or any right or interest in or with respect to the Property or anyportion thereof by the holder of a Mortgage (a "Mortgagee"),pursuant to foreclosure, trustee's sale,deed in lieu of foreclosure,lease or sublease termination or otherwise,shall be subject to all of the terms and conditions of this Agreement except that any such Mortgagee, including its affiliate,who takes title to the Property or any portion thereof shall be entitled to the benefits arising under this Agreement provided Mortgagee complies with Section 6.3 below. 6.3 Mortgagee Not Obligated.Notwithstanding the provisions of this Section 6, Mortgagee will not have any obligation or duty pursuant to the terms set forth in this Agreement to perf orm the obligations of the Developer or other affirmative covenants of the Developer hereunder,or to guarantee such performance,except that the Mortgagee and its successor shall have no vested right to develop the Project without fully complying with the terms of this Agreement and executing and delivering to the City,in a form and with terms reasonably acceptable to the City,an assumption agreement of Developer's obligations hereunder. 16 6.4 Request for Notice to Mortgage.The Mortgagee of any Mortgage or deed of trust encumbering the Property,or any part or interest thereof,who has submitted a request in writing to the City in the manner specified herein for giving notices shall be entitled to receive written notification from the City of any notice of non-compliance by Developer in the performance of Developer's obligations under this Agreement. 6.5 Mortgagees Time to Cure.If the City timely receives a written request from a Mortgagee requesting a copy of any notice of non-compliance given to Developer under the terms of this Agreement,the City shall provide a copy of that notice to the Mortgagee within ten (10)days of sending the notice of non-compliance to Developer.The Mortgagee shall have the right,but not the obligation,to cure the non-compliance for a period of sixty (60)days after the Mortgagee receives written notice of non-compliance,or any longer period as is reasonably necessary,not to exceed 120 days,to remedy such items of non-compliance,by mutual consent of the City and the Mortgagee provided that Mortgagee shall continuously and diligently pursue the remedy at all times until the item of non-compliance is cured. 6.6 Disaffirmation.If this Agreement is terminated as to any portion of the Property by reason of (i)any default or (ii)as a result of a bankruptcy proceeding,or if this Agreement is disaffirmed by a receiver,liquidator,or trustee for the Developer or its property,the City,if requested by any Mortgagee,shall negotiate in good faith with such Mortgagee for a new development agreement for the Project as to such portion of the Property with the most senior Mortgagee requesting such new agreement.This Agreement does not require any Mortgagee or the City to enter into a new development agreement pursuant to this Section. 7.GENERAL PROVISIONS 7.1 Effective Date.This Agreement shall be effective upon date this Agreement is attested by the City Clerk of the City of Los Angeles after execution by the Developer and the Mayor of the City of Los Angeles. 7.2 Term.The Term of this Agreement shall commence on the Effective Date and shall extend for a period of fifteen (15)years after the Effective Date,unless said Term is otherwise terminated,modified or extended by circumstances set forth in this Agreement or by mutual consent of the Parties hereto.Following the expiration of this Term,this Agreement shall terminate and be of no further force and effect;provided,however,that this termination shall not affect any right or duty arising from entitlements or approvals,including the Proj ect Approvals on the Property,approved concurrently with,or subsequent to,the Effective Date of this Agreement The Term of this Agreement shall automatically be extended for the period of time of any actual delay resulting from any enactments pursuant to the Reserved Powers or moratoria, or from legal actions or appeals which enjoin performance under this Agreement or act to stay performance under this Agreement (other than bankruptcy or similar procedures),or from any actions pursuant to Section 7.6 (Dispute Resolution),or from any litigation related to the Project or Project Approvals,this Agreement or the Property. 7.3 Appeals to City Council.Where an appeal by Developer or its Transferees,as the case may be,to the City Council from a finding and/or determination of the Planning Commission is created by this Agreement,such appeal shall be taken,if at all,within twenty (20) 17 days after the mailing of such finding and/or determination to Developer,or its successors, transferees,and/or assignees,as the case may be.The City Council shall act upon the finding and/or determination of the Planning Commission eighty (80)days after such mailing,or within such additional period as may be agreed upon by the Developer or its Transferees,as tile case may be,and the City Council,The failure of the City Council to act shall not be deemed to be a denial Or approval of the appeal,which shall remain pending until final City Council action. 7.4 Enforced Delay;Extension of Time of Performance.In addition to specific provisions of tills Agreement,whenever a period of time,including a reasonable period of time, is designated within which either Party hereto is required to do or complete any act,matter or thing,the time for the doing or completion thereof shall be extended by a period of time equal to the number of days during which such P31iy is actually prevented from,or is unreasonably interfered with,the doing or completion of such act,matter or thing because of causes beyond the reasonable control of the Pa11y to be excused,including:war;insurrection;riots;floods; earthquakes;fires;casualties;acts of God;litigation and administrative proceedings against the Project (not including any administrative proceedings contemplated by this Agreement in the normal course of affairs (such as the Annual Review));any approval required by the City (not including any period of time normally expected for the processing of such approvals in the ordinary course of affairs);restrictions imposed or mandated by other governmental entities; enactment of conflicting state or federal laws or regulations;judicial decisions;the exercise of the City's Reserved Powers;or similar bases for excused performance which are not within the reasonable control of the party to be excused (financial inability excepted).Tills Section shall not be applicable to any proceedings with respect to bankruptcy or receivership initiated by or on behalf of Developer or,if not dismissed within ninety (90)days,by any third parties against Developer.If written notice of such delay .18 given to either party within thirty (30)days of the commencement of such delay,an extension of time for such cause will be granted in writing for the period of the enforced delay,or longer as may be mutually agreed upon. 7.5 Dispute Resolution. 7.5.1 Dispute Resolution Proceedings.The parties may agree to dispute resolution proceedings to fairly and expeditiously resolve disputes or questions of interpretation under this Agreement.These dispute resolution proceedings may include:(a)procedures developed by the City for expeditious interpretation of questions arising under development agreements;or (b)any other manner of dispute resolution which is mutually agreed upon by the parties. 7.5.2 Arbitration.Any dispute between the parties that is to be resolved by arbitration shall be settled and decided by arbitration conducted by an arbitrator who must be a former judge of the Los Angeles County Superior Court or Appellate Justice of the Second District Court of Appeals or the California Supreme Court This arbitrator shall be selected by mutual agreement of the parties. 7.5.2.1 Arbitration Procedures.Upon appointment of the arbitrator,the .rnatter shall be set for arbitration at a time not less than thirty (30)nor more than ninety (90)days from the effective dale of the appointment of the arbitrator.The arbitration shall be conducted under the procedures set forth in Code of Civil Procedure Section 638,et seq.,Or under such 18 other procedures as are agreeable to both parties,except that provisions of the California Code of Civil Procedure pertaining to discovery and the provisions of the California Evidence Code shall be applicable to such proceeding.' 7.5.3 Extension of Term.The TenTI of this Agreement as set forth in Section 7.2 shall automatically be extended for the period of time in which the parties are engaged in dispute resolution to the degree that such extension of the Term is reasonably required because activities which would have been completed prior to the expiration of the Term are delayed beyond the scheduled expiration of the Term as the result of such dispute resolution. 7.5.4 Legal Action.Either'Party may,in addition to any other rights or remedies,institute legal action to cure,correct,or remedy any default,enforce any covenant or agreement herein,enjoin any threatened or attempted violation,or enforce by specific performance the obligations and lights of the Parties hereto.Notwithstanding the above,the City'S right to seek specific performance shall be specifically limited to compelling Developer to complete,demolish or make safe any particular improvernentis)on public lands which is required as a Mitigation Measure or Condition of Approval.Developer shall have no liability (other than the potential termination of this Agreement)if the contemplated development fails to occur. 7.5.5 Applicable Law.This Agreement shall be construed and enforced in accordance with the laws of the State of California,and the venue for any legal actions brought by any party with respect to this Agreement shall be the County of Los Angeles,State of California for state actions and the Central District of California for any federal actions, 7.6 Amendments.This Agreement may be amended from time to time by mutual consent in writing of the parties to this Agreement in accordance with Government Code Section 65868,and any Transferee of the Property or any portion thereof.Any amendment to this Agreement which relates to the Term,permitted uses,substantial density or intensity of use, height,or size of buildings,provisions,obligations for reservation and dedication of land, conditions,restrictions,and requirements relating to subsequent Discretionary Action or any conditions or covenants relating to the use of the Property,which are not provided for under the Applicable Rules or Project Approvals,shall require notice and public hearing before the parties may execute an amendment thereto,Developer,or a Transferee as applicable,shall reimburse the City for its actual costs,reasonably and necessarily incurred;to review any amendments requested by Developer or a Transferee,including the cost of any public hearings. 7.7 Assignment.The Property,as well as the rights and obligations of Developer under this Agreement,may be transferred or assigned III whole or in part by Developer to a Transferee without the consent of the City;subject to the conditions set forth below in Sections 7.8.1 and 7.8.2.Upon such assignment the assignor shall be released from the obligations so assigned. 7.7.1 Conditions of Assignment.No such assignment shall be valid until and UD less the following occur: 19 7.7.1.1 Written Notice of Assignment Required.Developer or any successor transferor gives prior written notice to the City of its intention to assign or transfer any of its interests,rights or obligations under this Agreement and a complete disclosure of the identity of the assignee or Transferee,including copies of the Articles of Incorporation in the case of corporations and the names of individual partners in the case of partnerships.Any failure by Developer or any successor transferor to provide the notice shall be curable in accordance with the provisions in Section 5.1. 7.7.1.2 Automatic Assumption of Obligations,Unless otherwise stated elsewhere in this Agreement to the contrary,a Transferee of Property or any portion thereof expressly and unconditionally assumes all of the rights and obligations of this Agreement transferred or assigned by Property Owner and which are expressly set forth in the applicable Assignment Agreement. 7.7.2 Liability Upon Assignment.Each Transferee of any portion of the Property shall be solely and only liable for performance of such Transferee's obligations applicable to its portion of the Property under this Agreement as specified in the applicable Assignment Agreement.Upon the assignment or transfer of any portion of the Property,together with any obligations assignable under this Agreement,the Transferee shall become solely and only liable for the performance of those assigned or transferred obligations so assumed and shall have the rights of a "Developer"under this Agreement,which such rights and obligations shall be set forth specifically in the Assignment Agreement,executed by the transferring Developer and the Transferee,as of the date of such transfer,assignment or conveyance of the applicable portion of the Property.The failure of a Transferee of any portion of the Property to perform such Developer's obligations set forth in the applicable Assignment Agreement may result,at the City's option,in a declaration that this Agreement has been breached,and the City may,but shall not be obligated to,exercise its rights and remedies under this Agreement solely as it relates to the defaulting Transferee's portion of the Property as provided forin Section 5.1 hereof,subject to such defaulting Transferee's right to notice and opportunity to cure the default in accordance with provisions of Section 5.1 hereof.Any partial termination of this Agreement as it relates to that Transferee's holding is severable from the entire Agreement,and shall not affect the remaining entirety of the Agreement. 7.7.3 Release of Property Owner.With respect to a transfer and assignment of all or a portion of Developer's interest in the Property and the related rights and obligations hereunder,upon the effective date of any such transfer and assignment,as evidenced by the execution of an Assignment Agreement pursuant to this Section 7.8.3 between Developer and the Transferee and delivery of such Assignment Agreement to the City,Developer shall automatically be released from any further obl-igations to the City under this Agreement with respect to the Property so transferred. 7.7.4 Release of Property Transferee.A Transferee shall not be liable for any obligations to the City under this Agreement relating to any portion of the Property other than that portion transferred to such Transferee,and no default by a Developer under this Agreement with respect to such other portions of the Property shall be deemed a default by such Transferee with respect to the portion of the Property transferred to such Transferee. 20 7.8 Covenants.The provisions of this Agreement shall constitute covenants which shall run with the land comprising the Property for the benefit thereof,subject to any Assignment Agreement (if applicable)and the burdens and benefits hereof shall bind and inure to the benefit of the Parties hereto and all successors and assigns of the Parties,including any Transferee of Developer. 7.9 Cooperation and Implementation. 7.9.1..Processing.Upon satisfactory completion by Developer of all requited preliminary actions and payment of appropriate Processing Fees,including the fee for processing this Agreement,the Planning Department shall commence and process all required steps necessary for the implementation of this Agreement and development of the Property in accordance with State law and the terms of this Agreement.Developer shall,in a timely manner, provide the Planning Department with all documents,plans,fees and other information necessary for the Planning Department to carry out its processing obligations pursuant to this Agreement. 7.9.2.Other Governmental Permits.Developer shall apply in a timely manner for such other permits and approvals as may be required from other governmental or quasi- governmental agencies having jurisdiction over the Project as may be required for the development of,or provision of services to the Project.The City shall cooperate with Developer in its endeavors to obtain such penn its and approvals and shall,from time to time at the request of Developer,attempt with due diligence and in good faith to enter into binding agreements with any such entity to ensure the availability of such permits and approvals,01'services,provided such agreements are reasonable and not detrimental to the City.These agreements may include, but are not limited to,joint powers agreements under the provisions of the Joint Exercise of Powers Act (Government Code Section 6500,et seq.),or the provisions of other laws to create legally binding,enforceable agreements between such parties.To the extent allowed by law, Developer shall be a party to any such agreement,or a third party beneficiary thereof,entitled to enforce for its own benefit on behalf of the City,or in its own name,the rights of the City or Developer thereunder or the duties and obligations of the parties thereto.Developer shall reimburse the City for all costs and expenses incurred in connection with seeking and entering into any such agreement,provided that Developer has requested such agreement.Developer or Transferee,as the case may be,shall defend the City in any challenge by any person or entity to any agreement,and shall reimburse the City for any costs and expenses incurred by the City in enforcing any agreement.Any fees,assessments,or other amounts payable by the City thereunder shall be borne by Developer or Transferee,as the case may be,except where Developer or Transferee,as the case may be,has notified the City in writing,prior to the City entering into an agreement,that it does not desire for the City to execute an agreement. 7.9.3.Cooperation in the Event of Legal Challenge.In the event of any legal action instituted by a third party or other governmental entity or official challenging the validity of any provision of this Agreement,the Parties hereby agree to affirmatively cooperate in. defending said action.Developer and the City agree to cooperate in any legal action seeking specific performance,declaratory relief or injunctive relief,to set court dates at the earliest practicable datc(s)and not to cause delay in the prosecution/defense of the action,provided such cooperation shall not require any Party to waive any rights. 21 7.9.4.Relationship of the Parties.It is understood and agreed by the parties hereto that the contractual relationship created between the parties hereunder is that Developer is an independent contractor and not an agent of the City.Further,the City and Developer hereby renounce the existence of any form of joint venture or partnership between them and agree that nothing herein or in any document executed in connection herewith shall be construed as making the City and Developer j oint venturers or partners. 7.10 Indemnification. 7.10.1 Obligation to Defend,Indemnify,and Hold Harmless.Developer hereby agrees to defend,indemnify,and hold harmless the City and its agents,officers,and employees,from any claim,action,or proceeding ("Proceeding")against the City or its agents, officers,or employees (i)to set aside,void,or annul,all or any part of any Project Approval,or (ii)for any damages,personal injury or death which may arise,directly or indirectly,from such Developer or such Developer's contractors,subcontractors"agents',or employees'operations in connection with the construction of the Project,whether operations be by such Developer or lilly of such Developer's contractors,subcontractors,by anyone or more persons directly or indirectly employed by,or acting as agent for such Developer or any of such Developer's contractors or subcontractors.In the event that the City,upon being served with a lawsuit or other legal process to set aside,void or annul all or part of any Project Approval,fails to promptly notify Developer in writing of the Proceeding,or fails to cooperate fully in the defense of the Proceeding,Developer shall thereafter be relieved of the obligations imposed in this Section 7.11.However,if Developer has actual written notice of the Proceeding,it shall not be relieved of the obligations imposed hereunder,notwithstanding the failure of the City to provide prompt written notice of the Proceeding.The City shall be considered to have failed to give prompt written notification of a Proceeding if the City,after being served with a lawsuit or other legal process challenging the Approvals,unreasonably delays in providing written notice thereofto the Developer.As used herein,"unreasonably delays"shall mean any delay that materially adversely impacts Developer's ability to defend the Proceeding.The obligations imposed in this Section 7.11 shall apply notwithstanding any allegation or determination in the Proceedings that the City acted contrary to applicable laws.Nothing in this Section shall be construed to mean that Developer shall hold the City harmless and/or defend it from any claims arising from,or alleged to arise from,its intentional misconduct or gross negligence in the performance of this Agreement. 7.10.2 Defending The Project Approvals.The Property Owner shall have the obligation to timely retain legal counsel to defend against any proceeding to set aside,void,or annul,all or any part of any Project Approval.The City shall have the right,if it so chooses,to defend the Proceeding utilizing in-house legal staff,in which case the Property Owner shall be liable for all legal costs and fees reasonably incurred by the City,including charges for staff time charged.In the event of a conflict of interest which prevents the Property Owner's legal counsel from representing the City,and in the event the City does 110t have the in-house legal resources to defend against the Proceeding,the City shall also have the ri ght to retain outside legal counsel provided that retaining outside legal counsel causes no delays,in which case the Property Owner shall be liable for all legal costs and fees reasonably incurred by the City.Provided that the Property Owner is not in breach of the terms of this Section,the City shall not enter into any settlement of the Proceeding which involves modification to any Project Approval or otherwise 22 results in the Property Owner incurring liabilities or other obligations,without the consent of the Property Owner. 7.10.3 Breach of Obligations.Actions constituting a breach of the obligations imposed in this Section 7.11 shall include,but not be limited to (i)the failure to timely retain qualified legal counsel to defend against the Proceedings;(ii)the failure to promptly pay the City for any attorneys fees or other legal costs for which the City is Hable pursuant to a judgment or settlement agreement in"the Proceeding seeking to set aside,void or annul all or part of any Project Approval;or (iii)the breach of any other obligation imposed in this Section 7.11,in each case after written notice from the City and a reasonable period of time in which to cure the breach,not to exceed thirty (30)days.For purposes of this Section 7.11,Developer shall be considered to have failed to timely retain qualified legal counsel if such counsel is not retained within thirty (30)days following the City's provision of the notice of Proceedings to Developer required hereunder.In the event that Developer breaches the obligations imposed in this Section 7.11,the City shall have no obligation to defend against the Proceedings,and by not defending against the Proceedings,the City shall not be considered to have waived any rights in this Section 7,11. 7.10A Cooperation.The City shall cooperate with Developer in the defense of the Proceeding,provided,however,that such obligation of the City to cooperate in its defense shall not require the City to 0)assert a position in its defense of the Proceeding which it has determined,in its sole discretion,has no substantial merit;(ii)advocate in its defense of the Proceeding legal theories which it has determined,in its sole discretion,lack substantial merit;or (iii)advocate in its defense of the Proceeding legal theories which it has determined,in its sole discretion,axe contrary to its best interests or to public policy.Nothing contained in this section shall require Developer to refrain from asserting in its defense of the Proceeding positions or legal theories that do not satisfy the foregoing requirements. 7.10.5 Contractual Obligation,Developer acknowledges and agrees that the obligations imposed in this Section 7.11 are contractual in nature,and that the breach of any such obligation may subject Developer to a breach of contract claim by the City. 7.10.6 Waiver of Right to Challenge.Developer hereby waives the right to challenge the validity of the obligations imposed in this Section 7.1 L 7.10.7 Survival.The obligations imposed in this Section 7.11 shall survive any judicial decision invalidating the Project Approvals. 7.10.8 Preparation of Administrative Record.Developer and the City acknowledge that,upon the commencement of legal Proceedings,the administrative record of proceedings relating to the Project Approvals must be prepared.Those documents must also be certified as complete and accurate by the City.Developer,as part of its defense obligation imposed in this Section 7.11,shall prepare at its sole cost and expense the record of proceedings in a manner which complies with all applicable laws;in accordance with reasonable procedures established by the City;and subject to the City's obligation to certify the administrative record of proceedings and the City's right to oversee the preparation of such administrative record. Developer agrees that its failure to prepare the administrative record as set forth herein,and in 23 compliance with all time deadlines imposed by law,shall constitute a breach Of its obligation to defend the City.In the event that Developer fails to prepare the administrative record,the City may do so,in which event the City shall be entitled to be reimbursed by Developer for all reasonable costs associated with preparation of the administrative record,including reasonable charges for staff time. 7.10.9.Deposit.Following the filing of a lawsuit,or other legal process seeking to set aside,void or annul all or part of any Project Approval,Developer shall be required, following written demand by the City,to place funds on deposit with the City,which funds shall be used to reimburse the City for expenses incurred in connection with defending the Project Approvals.For Project Approvals which included the certification of an environmental impact report by the City>the amount of said deposit shall be ten thousand ($10>000)dollars.For all other Project Approvals,the amount of the deposit shall be five thousand ($5,000)dollars.The City,at its sole discretion,may require a larger deposit upon a detailed showing to the Developer of tile basis for its determination that the above stated amounts are insufficient.Any unused portions of the deposit shall be refunded to Developer within thirty (30)days following the resolution of the challenge to the Project Approvals.All deposits must be paid to the City within thirty (30)days of Developer's receipt of the City's written demand for the deposit. 7.11 Notices.Any notice or communication required hereunder between the City or Developer must be in writing,and shall be given either personally or by registered or certified mail,return receipt requested.If given by registered or certified mail,the same shall be deemed to have been given and received on the first to occur of (I)actual receipt by any of the addressees designated below as the party to whom notices are to he sent,or (ii)five (5)days after a registered or certified letter containing such notice,properly addressed,with postage prepaid,is deposi ted in the United States mail.If personally delivered,a notice shall be deemed to have been given when delivered to the party to whom it is addressed.Any party hereto may at any time,by giving ten (l0)days'written notice to the other party hereto,designate any other address in substitution of the address,or any additional address,to which such notice or communication shall be given.Such notices or communications shall be given to the parties at their addresses set forth below: 24 If to the City: City of Los Angeles Attention:Director of Planning 200 N01ih Spring Street Los Angeles,CA 90012 with copies to Los Angeles City Attorney's Office Real Property/Environment Division Los Angeles City Attorney's OfficeihFloor,City Hall East 200 North Main Street Los Angeles,CA 90012 If to Developer: Next Century Associates,LLC 1999 Avenue of the Stars,Suite 2850 Los Angeles,CA 90067 Attn:Michael Rosenfeld with copies to Armbruster Goldsmith &Delvac LLP 11611 San Vicente Blvd"Suite 900 Los Angeles,CA 90049 Attn:Mark Armbruster 7.12 Recordation,As provided in Government Code Section 65868.5,this Agreement shall be recorded with the Register-Recorder of the County of Los Angeles within ten (10)days following its execution by all Parties.Developer shall provide the City Clerk with the fees for such recording prior to or at the time of such recording should the City Clerk effectuate recordation. 7.13 Constructive Notice and Acceptance.Every person who now or hereafter owns or acquires any right,title,interest in or to any portion of the Property,is and shall be conclusively deemed to have consented and agreed to every provision contained herein,whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Property, 7.14 Successors and Assignees,The provisions of this Agreement shall be binding upon and shall inure to the benefit of the Parties,any subsequent owner of all or any portion of the Property and their respective Transferees,successors and assignees, 7.15 Severability,If any provisions,conditions,or covenants of this Agreement,or the application thereof to any circumstances of either Party,shall be held invalid or unenforceable,the remainder of this Agreement or the application of such provision,condition, OJ:covenant to persons or circumstances other than those as to whom Of which it is held invalid 25 or unenforceable shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law. 7.16 Time of the Essence.Time is of the essence for each provision of this Agreement of which time is an element. 7.17 Waiver.No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the Party against whom enforcement of a waiver is sought and refers expressly to this Section.No waiver of any right or remedy with respect to any occurrence or event shall be deemed a waiver of any right or remedy with respect to any other occurrence or event. 7.18 No Third Party Beneficiaries.The only Parties to this Agreement are the City and Developer and their successors-in-interest There are no third party beneficiaries,and this Agreement is not intended,and shall not be construed,to benefit or be enforceable by any other person whatsoever. 7.19 Entire Agreement.This Agreement sets forth and contains the entire understanding and agreement of the Parties and there are no oral or written representations, understandings or ancillary covenants,undertakings or agreements which are not contained or expressly referred to herein and no testimony or evidence of any such representations, understandings,or covenants shall be admissible in any proceedings of any kind or nature to interpret or determine the provisions or conditions of this Agreement 7.20 Legal Advice;Neutral Interpretation;Headings,Table of Contents,and Index.Each Party acknowledges that it has received independent legal advice from its attorneys with respect to the advisability of executing this Agreement and the meaning of the provisions hereof.The provisions of this Agreement shall be construed as to their fair meaning,and not for or against any Party based upon any attribution to such Party as the source of the language in question.The headings,table of contents,and index used in this Agreement are for the convenience of reference only and shall not be used in construing this Agreement 7.21 Counterparts.This Agreement is executed in duplicate originals,each of which is deemed to be an original,This Agreement,110t counting the Cover Page,Table of Contents or Index,consists of 27 pages and three (3)Exhibits which constitute the entire understanding and agreement of the Parties. 26 IN WITNESS WHEREOF,the Parties hereto have executed this Agreement as of the date first written above. CITY OF LOS ANGELES,a municipal corporation of the State of California By: Antonio Villaraigosa,Mayor DATE: NEXT CENTUR YASSOCIA TES,LLC,a Delaware limited liability company By: Name:Michael Rosenfeld Title:Authorized Signatory APPROVED AS TO FORM: CARMEN A.TRUTANICH,City Attorney By: Laura Cadogan Hurd,Deputy City Attorney DATE: ATTEST: JUNELAGMAY By:~_ Deputy DATE: APPROVED AS TO FORM: Armbruster Goldsmith &Delvac LLP By: Mark Armbruster 27 EXHIBIT "An LEGAL DESCRIPTION OF THE PROPERTY Parcel "A"of Parcel Map L.A No.1495,in the CIty of Los Angeles,County of Los Angeles,State of California,as per map filed in Book 29,Page 23,of Parcel Maps,in the Office of the County Recorder of said County. Excepting therefrom that portion lying southeasterly of the following described fine: Beginning at the most southerly corner of said Parcel "A",said corner also being in the northwesterly line of Olympic Boulevard,100.00 feet wide,as shown on said Map; thence along the generally southwesterly line of said Parcel "A",North 35°38'00"West 211.49 feet;thence continuing along said southwesterly line and it's northwesterly prolongation,North 39°29'13"West 347.13 feet;thence North 50030'57"East 359.37 feet to the northeasterly line of said Parcel "A". Also excepting therefrom that portion lying southwesterly of the following described line: Beginning at a point on the northwesterly line of said Parcel "A",said point being the northeasterly terminus of that certain course in said northwesterly line having a bearing and distance of North 50"'28'43"East 1096.27 feet,as shown on said Parcel Map; thence southwesterly along said northwesterly fine,South 50°28'43"West 415.35 feet; thence South 39°29'03"East 406.19 feet to the southeasterly line of Lot 7 of Tract No. 26196,in said City,as per map recorded in Book 684,Pages 78 to 86,inclusive,of Maps,in the Office of the County Recorder of said County;thence southwesterly along said southeasterly line,South 50°29'00"West 12.02 feet;thence South 84043'19"East 27.55 feet;thence South 39017'33"East 222.48 feet to the southeasterly line of said Parcel "A", 28 EXHIBIT "B" CONDITIONS OF APPROVAL 29 CPC-200B-4953·CU·CUB-DA-ZAA-SPP-SPR-PA-MlSC 2025 Avenue of the Stars C-1 CONDITIONS OF APPROVAL A,ENTITLEMENT CONDITIONS 1,Use.Use of the subject property shall be limited to the use and area provisions of the C2-2··o zone permitting a hotel with related amenities and/or residential condominium units,asdefinedinSection12.16 of the Municipal Code. 2.Site Plan.The Use and development of the subject property shan be in substantia! conformance with the site plan,elevations,and floor plans labeled "Exhibit A-i,"stamped and dated August 1,2012,or as modified by the City Planning Commission,attached to the subject case file.Minor deviations may be aUowed in order to comply with provisions of the Municipa[Code,the subject conditions and the intent of the subject permit authorization. The fotlowing project is approved: In accordance with the site plan,elevations,and section drawings labeled "Exhibit A~1," stamped and dated August 1,2012 attached to the subject case file shan include,but not limited to the following elements as shown in the exhibit: a.A maximum of 290 dwelling units are permitted on the subject site to be located in the two (2)residential towers. b.A maximum of 10 accessory housekeeping rooms are permitted on the subject site to be located in the two (2)residential towers c.The rehabilitated hotel shall contain a maximum of 63 dwelling units and a maximum of 394 hotel rooms. d.Office uses not associated with the operation of the hotel are prohibited. e.The rehabilitated hotel shall contain a maximum of 26,250 square feet of ballroom and meeting floor area, f.The rehabilitated hotel shall be permitted to have a maximum of 9,100 square feet of restaurant use. g.The rehabilitated hotel shaH be permitted to have a maximum of 1,900 square feet of hotel retail floor area h.The rehabllltated hotel shaH be permitted to have a maximum of 14,000 square feet of spa and fitness floor area.. i.A maximum of 93,840 square feet of non-hotel commercial retail/restaurant floor area is permttted. j.Pools,spas,and landscaped deckshall be permitted on the roof of the existing hotel. 3.Maximum Height -The maximum height of the structures shall be as shown'.on the elevations and plans of CPC-2008-4953-CU-CUB~DA-ZAA-SPP-SPR~PA-MISO dated August 1,2012 or revised by the City Planning Commission.In no event shall the S'undings be higher than 578 feet as defined per the Los Angeles Municipal Code'(Sec.12.21.2 LAMe)and the Century City North Spec[fic Plan (Ord No.156,122). 4.Floor Area Ratio (FAR)-The Maxlml,lm FloorArea Raila (FAR)shall not exceed 6.0:1. 5.Parking/Driveway Plan.Prior to the issuance of any building permit,a parking area and driveway plan shall be prepared for approval by the Bureau of Engineering and the Department of Transportation. CPC-2008-49 53-CU-CU8-DA-ZAA-S PP-SP R-PA-M ISC 2025 Avenue of the Stars C-2 6.Parking.Parking garages shall provide 2,480 parking spaces or a minimum parking ratio as shown on the following "Proposed Project Parking Summary Table".A maximum of 400 of the total number of parking spaces may be provided in an off-site parking structure. Tab!e IV.M-32 Proposed Pr0ject Parking Summary Option a.-WiUlOut Office- Spaces,Spaces Use S'[z:e P,n1tinQ RatiOo lFte;q~rr.e,d!PfQVitled1-----,CondominIum 353dU 2.5ldu 883,eal Hol1S'aJtoopin,g:._,.-1Ddu 1:.01du '1'0 in Hotel 3Qrrn t.Olrro 30 3n -30rm !1..5lml!~5 15 334 rm D,33ftm 111 111 MeetlnglBaJlroom 26,250s,{1/1135 Sf ThO'7511 .AnciITary RemiI 1,9011 sf 4J)f1,nOOsf 8·S AnciH"l'j Resfuurant g,1!Q[}:s{HlOf1,000 sI1 91 91 Spa!Frtness Facilily 14,OOQsf 10JN1,oao.s~14(}140 Oftiice o Sf;2Jlf1,flOU sf ,11 0: Retail 82,620 s.f 4.0/1,000 sf 33!l 331l-Rest<!lurnn!11,220 sf iO;Cif1JIOO SF i12 t12 2,48.i)2,4$U Source:Grotn&Aswt:fatee 20'tClt ......... 7.Related Subdivision Case VTT ..71688-CC.The applicant or any successor in interest shall comply with all of the Advisory Agency requirements contained in Case No.VTr-71688~CC being processed concurrently with these entitlements and any subsequent modifications thereto,to the satisfaction of the Director 9f Planning, 8.Conditional Use -A Conditional Use is approved to permit the establishment of a hate!on a site classified in the C2 (commercial)Zone that is located within 500 feet of properties classified in an R (residential)Zone. Adjustments 9.Adjustment -A Yard Adjustment is granted herein to permit zero-foot setbacks in lieu of 16 feet minimum otherwise required for the west side yards. 10,Adjustments -A Yard adjustment is granted herein to permit zero-foot setbacks in lieu of 20 feet minimum otherwise required for the south rear yard. Miscellaneous Entitlement 11.Miscellaneous Entitlement Approval ~Pursuant to Section 10.B.9 of the Century City North Specific Plan,a Miscellaneous Entitlement authorization is granted herein to change of the alignment of the on-site Pedestrian Corridor as shown on the Plans dated August 1, 2012.The revised Pedestrian Corridor location shall be submitted to the Bureau of Engineering that includes the foHowing design criteria: CPC-2008-4953~CU-CU8-DA-ZAA-SPP-SPR-PA-M[SC 2025 Avenue of the Stars C-3 a.The revised Pedestrian Corridor conforms to the spirit and intent of the Specific Plan and will provide equal or better pedestrian access and safety. b.The Pedestrian Walkway located in the lower sunken Plaza area shall follow the alignment and dimensions on the plans dated August 5,2012 (Exhibit A-4). c.Pedestrian Corridor shaH be constructed of a hard,durable surface and shall be a minimum of 6 feet in width;provided,however,the City Engineer may require a greater width if such is necessary to carry anticipated pedestrian traffic. d.The revised Pedestrian Corridor located on the lower plaza level from the escalators in the hate!to the Pedestrian Crossing (underpass)leading to 2000 Avenue of the Stars shalf be clearly delineated with the use of materials,textures,landsca.ping, lighting,color or other defining features.The flooring materials of this section of walkway shall be consistent to clearly delineate the path across the driveway and taxi cueing area. e.The Pedestrian Corridor shall be designed and constructed to conform to applicable handicapped person access standards.f Mounted diagrams,maps or other graphic devices,clearly setting forth a schematic of the Pedestrian Corridor shall be located along the Pedestrian Corridor.Said graphic devices shalf conform to a uniform graphfc standard and shall not be more than 5feet or less than 3 feet in height. g.The Pedestrian Corridor and Walkways shall be open to the public,but there may be private Access to the Corridor. h.The Pedestrian Corridor and Walkways shall be open to the public at least one hour after the close of business for the restaurants,retail or cultural use whichever is latest. i,Security for the on-site Pedestrian Corridor and Walkways shall be provided by the Project j,The Pedestrian Walkway located in the lower sunken Plaza area shall be separated from the parked vehicles by a solid low wall with a minimum height of 42 inches and topped with a transparent partition to the ceiling to provide a buffer from vehicle exhaust and to attenuate sound levels. Conditional Use Permit {Alcohol) 12.Conditional Use -A Conditional Use authorization granted herein for a Master Alcohol .Permit,or various conditional use permits toa!low the safe and dispensation of a full line of. alcoholic beverages,for on-site consumption within up to five'(5)separate facilities and/or as an accessory to the operation of a hotel and apartment hotel and for two (2)off-site sale permits for use in connection with catering and a retail food and beverage shop The operations permitted under this Conditional Use shall be in compliance with the State of California,Department of Alcohollo Beverage Control laws and standards. 13,Alcohol Uses and Sales.- a.The hours of alcohol sales shall be determined by the State of California Department of Alcoholic Beverage Control permits.Mini-bars located within hotel/apartmenUcondominium guest rooms shall not be limited in the hours of alcohol service. b.The owners,operators,managers,and all employees serving alcohol to patrons shall enroll in and complete a certified training program is recognized by the State Department of Alcoholic Beverage Control for the responsible service of alcohol.This training shall be completed by new employees within four weeks of employment and shall be completed by all employees serving alcoholic beverages every 24 months. c.\Nithin six (6)months of the effective date of this action or within six (6)months of opening of the licensee business,all employees and managers involved with the sale CPC-2008·-4953-CU-CUB-OA-ZAA-SPP-SPR·PA-MISC 2025 Avenue of the Stars C-4 of alcoholic beverages shall enrol!in the Los Angeles Police Department" Standardized Training for Alcohol Retailers (STAR)".Upon completion of such training,the applicant shall request the Police Department to issue a letter identifying which employees completed the training.The applicant shall transmit a copy of the letter from the Police Department to the Department of Gity Planning as evidence of compliance.AI!new employees shall complete the STAR program within 60 days of hire and then every 12 months thereafter. d.Each restaurant and bar facility shall establish and operate a viable and effective designated driver program (i.e.,free soft drinks or coffee to a designated driver of the group).The availability of this program shall be made known to patrons either via a two-sided card placed on all tables and/or a program description printed on the menu. e.At least one on-duty manager with authority over the activities within the facility shall be on the premises at aU times that the facility ls open for business.The on-duty manacer'sresponsibillties shall include the monitoring of the interior of the premises to ensure cornpllance with all State laws,municipal codes and conditions imposed by the Department of Alcoholic Beverage Control and the Department of City Planning.f.An electronic age verification device shall be utilized as a means to assist in age identification verification with training provided for all employees in the sale of alcohol. g.The applicant shall maintain on the premises and present upon request to the Police or other enforcement agency,a copy of the Business Permit,Insurance Information, and valid emergency contact phone number for any Valet Service utilized and for the Security Company Service employed. h.The applicantrowner and on-site manager(s)shall comply with all applicable laws and conditlons and shall properly manage the facility to discourage illegal and criminal activities on the subject premises and any accessory parking areas over which they exercise control. i.The conditions of this grant,a copy of a valid business license,and a valid emergency contact phone number for the business operator and for any associated valet parking service shall be maintained in the restaurant office at all times and shall be immediately produced upon request of any police officer or Department of Alcoholic Beverage Control investigator.. j.Each establishment shall secure a City permit deal denoting approval of alcoholic beverage sales from a Department of City Planning public counter and mount it on either the inside of the window of the subject site facing the internal street or on the outside of the buHding (if inside mounting is not possible).The decal shall be visible at all times and mounted before the privileges granted herein for alcoholic beverages are utilized.. k.The applicant shall be responsible for maintaining the area adjacent to the premises over his/her control free of litter.. I.A contact phone number shari be posted at the entrance to the prernisesfor calls regarding any complaints regarding the operation of the hotel. m,Any music,sound or noise.emitted,that is under the control of the operator,shall not exceed the decibel levels permitted by the Noise Abatement regulations of the Municipal Code. n.No cover charge or any afterhours use of any of the restaurants shall be permitted. No membership shall be required for admission to any of the restaurants or any sub- portion of the restaurants.No minimum age requirements shall be required for entry. 0.No coin operated electronic,video,or mechanical amusement devices shall be maintained on any of the individual restaurant premises. p.Any amplified music shall not be audible beyond that part of the establishment which is under the control of the licensee. CPC-2008-4953-CU-CUB-DA-ZAA-SPP-SPR-PA-MISC 2025 Avenue of the Stars C-5 q.All restaurant tenants shall be provided with a copy of these conditions which shall also be referenced in any lease and which shall be maintained on the premises and available upon request by an enforcement agency.r.All conditions of this grant shall apply to all establishments,unless otherwise noted. s.Tenants shaf be made aware that a violation of these conditions may result inrevocation. i II! ! 14.Alcohol Use-Plan Approvals Required.The applicant or individual operator shall me a Pian Approval with the Department of City Planning prior to the utilization of any grant made herein pursuant to the sale of alcoholic beverages.Each plan approval shall be accompanied by the payment of appropriate fees,pursuant to 'Sectlon 19.0.1 C of the Municipal Code,and must be accepted as complete by the Department of City Planning. Mailing labels shall be provided by the applicant for all abutting owners.In reviewing the Plan Approvals for alcohol sales,the Zoning Administrator may consider add tti onaI conditions provided by the applicant or requested by the Police Department,but not limited to establishing conditions,as applicable,on the foHowing:maximum seating capacity;valet parking,noise;mode,character and nature of the operation;and age limits. 15.The number of alcohol sales facilities may be changed only by new Plan Approval authorization relative to the entire property ownership. 16.Alcohol Use -Additional Corrective Measures.The authorized use shall be conducted atantimeswithdueregardforthecharacterofthesurroundingdistrict,and the right is reserved to the Department of City Planning to impose additional corrective conditions if the Zoning Administrator determines such conditions are proven.necessary for the protection of persons in the neighborhood or occupants of adjacent property. B.Other Conditions 17.Transportation Demand Management (TDM)Program.Since the project involves the construction of more than 25,000 square feet of new non-resldential gross floor area,it must comply with all requirements of the Citywide TOM Ordinance No.168,700.The ordinance requires the provision of transportation demand management features in new construction, which would facilitate the use of alternative transportation modes to decrease dependency on vehicles carrying only one person,Prior to the issuance of a permanent certificate of occupancy,the owner/applicant shall agree,by way of a covenant that runs with the land,to provide and maintain in a state of good repair the management and trip reduction measures required by Ordinance 168,700. 18.Bicycle Parking.The Project shari provide bicycle spaces (50 bicycle spaces or two.percent of the 2,480 parking spaces provided for.the Project)pursuant to LAMe requirement. 19.Street Ughting.Street Hghting improvements are required if street widening is required per the Bureau of Engineering improvement conditions.If the widening is required,relocate and upgrade street lights:four (4)on Constellation Boulevard and eight (8)on Avenue of the Stars. 20.Street Trees.Prior to the issuance of any permits,satisfactory arrangements shall be made with the Street Tree Division of the Bureau of-Street Maintenance for the construction of tree wells and planting of street trees,if necessary,along the portions of Avenue of the Stars and Constellation Boulevard fronting the Project site. CPC-200B-4953-CU-CUB-DA-ZAA-SPP-SPR-PA-MISC 2025 Avenue of the Stars C-6 21.Sustainable Development Practices.The Project shall be built to standard of the United States Green Building Council's (USGBC)Leadership in Energy and Environmental Design (LEED)Silver level.Sustainable design features include:roof or building mounted photovoltaic panels,building integrated photovoltaics;dayllghting of work areas;operable windows and fresh air circulation;dual piping to enable the use of recycled water,water efficient fixtures,and recycling during demolition and construction. a.Recycled content products (l.e,building materials and landscaping); b.Materials from renewable sources (i.e.rapidly renewable floor products to reduce land and resources dedicated to producing construction materials); c.Roof systems (i.e.cool roof); d.Efficient modes of transportation; e.Energy efficient equipment and appliances; f.Water conserving devices (i.e.low flush toilets,shower heads,plumbing sensors, drip irrigation systems);. g.Landscaping plant materials (i.e,native trees,shrubs and ground cover);and h.Low Volatile Organic Compounds (VaC)emitting materials. 22.Maintenance,trash and storage.The subject property including associated parking facilities,sidewalks,public plazas,walkways,outdoor pool areas,and landscaped planters adjacent to the exterior walls along the property lines shall be maintained in an attractive condition and shall be kept free of trash and debris.Trash receptacles shall be located throughout the site. 23.Utilities (Solid Waste)-Recycling bins shall be provided at appropriate locations to promote recycling of paper,metal,glass,and other recyclable material. 24.AU employees shall be notified not to park on adjoining residential streets.Any employee parking shall be provided in a manner suitable to the Director of Planning so that there wi!! be no employee parking spilling out into the adjacent residential neighborhoods, 25.Prior to the issuance of a Building Permit the applicant shall provide a Future Dedication of Easement to the MTA,without cost to tl;e MT A,for the future Century City Metro Transit Station and the construction of an associated shelter.In the event Metro selects the Project site for the location of its future Century City Metro Transit Station,the Applicant shall grant an easement to Metro to accommodate the station.The scope and precise location of the easement shall be determined by mutual agreement among the Department of Transportation,Department of City Planning,the MTA and the project applicant based on a feastbitity study to be funded by the applicant. 26.Bicycle Plan Q Prior to the issuance of a Buildfng Permit the applicant shall incorporate any adopted f3icycle Plan provisions and improvements that are adjacent to the project .site into the development plans.These adjacent improvements shari be funded by the applicant. 27.The applicant shan improve the at-grade pedestrian crossing at the Intersection of Avenue of the Stars and Constellation Boulevard,including the upgrade/replacement/installation of traffic signals to the satisfaction of the Department of Transportation (DOT)the Bureau of Engineering and the Department of City Planning. a.Improvement shall include special street pavers to better delineate the intersection crosswalks. b.The applicant shall analyze and request the Department of Transportation to consider requiring the installation of a signalized crosswalk with an "All-Walk"phase for pedestrians at the intersection of Avenue of the Stars and Constellation Boulevard and CPC-200B-4953-CU-CUB-DA-ZAA-SPP-SPR-PA-M!SC 2025 Avenue of the Stars advise the Department of City Planning accordingly,LADOT should at a minimum consider allowing the "All-Walk"during peak pedestrian traffic times including,but not limited to lunch peak time, 28,Truck Traffic Restricted Hours.Truck traffic directed to the project site for the purpose of delivering materials or construction-machinery shall be limited to the hours beginning at 7:00 AM arid ending at 6:00 PM,Monday through Friday and 8:00 AM to 6:00 PM on Saturday. No truck deflverles shalt occur outside of that time period,No truck queuing related to such deliveries to the project site shall occur on any local street within the project vicinity outside of that time period, i,j r \ I 29.Loading.Loading and unloading activities shall not interfere with traffic on any public street Public sidewalks,alleys and/or other public ways shall not be used for the parking or loading or unloading of vehicles.The location of loading areas shall be clearly identified on the site plan to the satisfaction of the Department of City Planning. 3~.Signs -Off-site signs,pole signs,mural signs,bill boards and supergraphic displays are prohibited, 31.Lighting,NI lighting shaU be shielded and directed onto the site and no floodlighting shall be located so as to shine directly onto any adjacent residential property.This condition shall not preclude the installation of low-level security lighting. 32.The Los Angeles Ponce Department shall be consulted for recommendations regarding the appropriate number of security personnel to be provided and addItional security measures which will provide for adequate protection to Visitors and employees of the site and nearby residents.Security features may include the provision of a private on-site security force, implementation of a survelllance system,installation of locks and alarms on entryways where appropriate,security lighting,and parking garage patrols.A plan setting forth the feasible protection measures shall be submitted for approval by Director and included in the subject case file. c.ENV!RONMENTAL CONDITIONS 33.The Applicant shall prepare and execute a Covenant and Agreement (Planning Department General form CP-6770)in a in a manner satisfactory to the Department of City Planning , requiring the Applicant to identify mitigation monitors who shaH provide periodic status reports on the implementation of applicable mitigation items required by Mitigation Conditions of the Project's approval satisfactory to the Department of City Planning.The mitigation monitors shall be identified as to their areas of responsibility,and phase of intervention (pre-construction,construction,post-construction/maintenance)to'ensure continued implementation of the below mentioned mitigation items. 34,The Applicant shall prepare and execute a Covenant and Agreement (P!anning Department General form CP-6770)in a in a manner satisfactory to the Planning Department,binding the Applicant,blnding the Applicant and all successors to the following: Note:MM corresponds to mitigation measures,To the extent that the Conditionals of Approval conflict with Mitigation Measure,if any,the Conditions of Approval shaHgovern and shall serve as part of the final Mitigation Monitoring and Reporting Program. CPC-2008-4953-CU-CUB-DA-ZAA-SPP-SPR-PA-MJSC 2025 Avenue of the Stars C-8 MM-1:A-1 If an archaeological resource is encountered,construction activities shall be diverted and a qualified archaeologist shall be consulted.The archaeologist shall assess the significance of the exposed archaeological discovery in accordance with all relevant California Register of Historical Resources criteria.If the resource is historically significant,and if it is not possible to construct the Proposed Project without disturbance of the archaeological resource,a data recovery plan shall be implemented unless the qualified archaeolopist determines that testing or studies already completed have adequately recovered the scientifically consequential information from and about the resource.The data recovery plan,if needed, shall set forth the size of the sample to be acquired,the methods and techniques of excavation,methods and techniques of laboratory studies to be conducted,documentation procedures,and the place where all materials and documentation will be curated.All work required by this Mitigation Measure shall be undertaken in a manner that minimizes disruption and delay to the Proposed Project. MM-2:A-2 If a potential paleontological resource is encountered,construction activities shall be diverted and a qualified paleontologist shall be consulted.If a potential fossil is found and the paleontoloqlst determines that such fossil could be important,the paleontoloqlst shall be allowed to temporarily divert or redirect grading and excavation activities in the area of the exposed fossil to facHltate evaluation of such fossil and,if necessary and appropriate,salvage of such fossil. MM-3:A-3 At the paleontologist's discretion and to reduce any construction delay, the grading and excavation contractor may assist the paleontologist in removing rock samples from excavation and grading locations for initial processing. MM-4:A-4 All fossils encountered and recovered from the Project Site shall be prepared by the paleontologist to the point of identification and catalogued before such fossil is donated to a final repository. MM-5:A-5 AI!fossils recovered from the Project Site shall be donated to a public, non-profit institution with a research interest in the materials,such as the Natural History Museum of Los Angeles County.Along with any fossil donated to an institution,the paleontologist shall also prepare (or have prepared)and included with the fossil notes,maps,and (if available)relevant photographs of the fossil and its location prior to removal. MM~6:A~6 If fossils are recovered from the Project Site,following completion of the tasks set forth in Mitigation Measures A-3 through A-6 above,the paleontologist shall prepare a report summarizing the results of the monltoring and salvaging efforts,the methodology used in these efforts,and a descrlptlon of the fossils collected and their respective significance.The report shall be submitted by the paleontoloqlst to the Lead Agency,to the Natural History Museum of Los Angeles County,and to representatives of other appropriate or concerned agencies.This report shall signify the satisfactory completion of the monitoring and review of excavation and grading activities and application of the required mitigation measures. MM~7:A-7 In the event human remains are discovered,work in the immediate vicinity of the discovery shall be suspended and the County Coroner shall be cpe~2008-4953-CU-CUB-DA-ZAA-SPP-SPR-PA·MI se 2025 Avenue of the Stars C-9 contacted.if the remains are deemed Native American in origin,the Native American Heritage Commission ("NAHC")shall be contacted to request consultation with an NAHC appointed Most Likely Descendant pursuant to Public Resources Code Section 5097.98 and CEQA Guidelines Section 15064.5.Work may be resumed at the landowner's discretion but shall only commence once consultation and treatment have been concluded.Work may continue on other parts of the Project Site while consultation and treatment are conducted. MM-8:B-1 All open areas not used for buildings,driveways,pedestrian amenities or walks shall be attractively landscaped and maintained in accordance with a landscape plan,including an automatic irrigation plan,prepared by a licensed landscape architect to the satisfaction of the Planning Department MM-9:8-2 A landscape plan shall be prepared by a licensed landscape architect to the satisfaction of the Planning Department. MM-10;B-3 The Applicant shall ensure through appropriate postings and daily visual inspections that no unauthorized materials are posted on any temporary construction barriers or temporary pedestrian walkways,and that such temporary barriers and walkways are maintained in a visually attractive manner throughout the construction period. MM-11:B-4 The Applicant shall prepare a street tree plan to be reviewed and approved by the City's Department of Public Works,Street Tree Division.All plantings in the public right-of-way shall be installed in accordance with the approved street tree plan. MM-12:8-5 Outdoor ttghting shall be designed and installed with shielding so that the light source shall not project directly upon any adjacent residential properties or routinely used outdoor spaces. MM-13:8-6 All exterior glazing used on the building surfaces shatl be low-reflective. MM~14:.8-7 All new street and pedestrian lighting within the public right-af-way shalt be approved by the Bureau of Street Lighting and shall:be tested in accordance with the requirements of the Bureau of Street Lighting. MM-15:8-8 New fit sign age shall be oriented so that the light source does not directly project upon any adjacent R1 property to the west of Century Park West. MM-16:B-9 Architectural fighttng shall be directed onto the building surfaces and have low reflectiVity to mmlmlze glare and limit light onto adjacent properties. MM-17:8-10 Prior to the issuance of a building permit,architectural plans showing building surface materials shall be submitted to the Planning Department for review to ensure that specific surfacing materials and trim shall not cause roadway glare. MM-18;C-1 Proposed buildings would be designed to minimize the need for the application of architectural coatings;and where the application of architectural coatings is necessary,shall use [ow and zero VOC coatings to the extent feasible. CPC-2008-4953-CU-CUB-DA-ZAA-SPP-SPR-PA-M1SC 2025 Avenue of the Stars C-10 MM-19:C-2 Water active grading/exc8vatlonsltes and unpaved surfaces at least three times daily. MM-20:C-3 The Project Applicant shall require by contract specifications that construction-related equipment,lncluding heavy duty equipment,motor .vehicles,and portable equipment,shall be turned off when not in use for an extended period of time (i.e.,5 minutes Of longer). MM-21:C-4 The Project Applicant shall require by contract specifications that construction operations rely on the electricity infrastructure surrounding the construction site and that the use of electrical generators powered by internal combustion engines shall be limited to three generators operating a combined 12 hours per day during building construction.The Project Applicant shall also encourage the use of fuel cells as a power source instead of diesel generators,to the extent feasible. MM-22:C-5 The project representative shall make available to the le'ad agency and SCAQMD a comprehensive inventory of all off-road construction equipment, equal to or greater than 50 horsepower,that wilf be used an aggregate of 40 or more hours during any portion of the mass grading phase of project construction.The inventory shall include the horsepower rating,engine production year,and certification of the specified Tier standard.A copy of each unit's certified tier specification,BACT documentation,and CARB or AQMD operating permit shall be provided onsite at the time of mobilization of each applicable unit of equipment Off-road diesel-powered construction equipment shall meet the Tier standards based on the following schedule: Prior to December 31,2014:AU eft-road diesel-powered construction equipment greater than 50 hp used an aggregate of 40 or more hours shall meet Tier 3 off-road emissions standards,where commercially available.In addition,all construction equipment shall be outfitted with BACT devices certified by CARB.Any emissions control device used by the contractor shall achieve emissions reductions that are no less than what could be achieved by a Level 3 diesel emissions control strategy for a similarly sized engine as defined by CARB regulations, where commercially available. Post-January 1,'2015:AI!off-road diesel-powered construction equipment greater than 50 hp used an aggregate of 40 or more hours shall meet the Tier 4 emission standards,where commercially available.In addition,all construction equipment shall be outfitted with BACT devices certified by CARB.Any emissions control device used by the contractor shan achieve emissions reductions that are no less than what could be achieved by a Level 3 diesel emissions control strategy for a similarly sized engine as defined by CARB regulations, where commercially available. MM-23:C-6 All vehicles and equipment shall be properly tuned and maintained according to manufacturers'specifications. MM-24:C-7 Haul truck fleets dUring demolition and shoring/excavation activities shall use newer truck fleets (e.q.,alternative fueled vehicles or meet 2010 model year Environmental Protection Agency [EPA]NOX standards),where commercially available.p,t a minimum,truck fleets used for these activities CPC~2008-4953-CU-CUB-DA-ZAA-SPP,·SPR-PA-MISC 2025 Avenue of the Stars C-11 shall be encouraged to apply for funding (e.g.,Car!Moyer Grant Program) from the Air Resources Board (ARB)or Air Quality Management District (AQMD)to upgrade their truck fleets,and if awarded,shall be required to use those funds to upgrade their fleets. MM:25 F-1 Subsurface water shall be removed by subdrains from behind building basement walls and retaining walls to prevent development of damaging hydrostatic pressures and to avoid detrimental effects on the strength and compressibility of compacted fills in accordance with City of Los Angeles requirements,as applicable.Water shall be conducted to collection drains at the base of the walls and disposed of in accordance with all applicable permit requirements,including all applicable National Pollutant DischargeEliminatfonSystemrequirements.,. MM-26:F-2 A,temporary shoring system shall be implemented during Proposed Project construction to ensure slope stability during excavation activities.lf the necessary space Is available,temporal)'excavations up to 25 feet in depth can be sloped back at a 1:1 (horizontal to vertical),in lieu of shoring. Deeper excavations should be sloped at an inclination of 1%:1,Where there is not sufficient space for sloped embankments,temporary shoring shall be erected,in an acceptable manner.An acceptable manner may include,but is not limited to,installing steel soldier piers in drilled holes,that would be backfilled with concrete and restrained with tie-in anchors. MM-27:F-3 Subterranean walls shall be braced internally and be designed to resist at-rest pressures.For preliminery design,it shall be assumed that the at-rest pressures wnl be equal to that developed by a fluid with a density of 55 pounds per cubic foot.In addition,subterranean walls shall be designed to resist any additional pressure resulting from storage or vehicular traffic and seismic earth pressures. MM-28:F-4 The Applicant shall ensure that all floor slabs,paving and adjacent concrete slabs and walks should be underlain by at least two feet of relatively non-expansive soil.Additionally,wall backtill shall consist of relatively nOI1- expansive soil.The non-expansive soil could be composed of the granular on-site soil. MM-29:F-5 Excavation and grading activities shall be scheduled during dry weather periods,as feasible.If grading occurs durlng the rainy season (October 15 through April 1),construction Best Management Practices shall be enforced per City.regulatory requirements to llrnlt soils leaving the Project Site, MM-30:F-6 Appropriate erosion control and drainage devices to the satisfaction of the Los Angeles Department of Building and Safety shall be incorporated, such as sand bags and inlet and outlet structures,as specified'by Section 91.7013 of the LABC.This could include planting fast-growing annual and perennial grasses in areas where construction is not immediately planned, which would shield and bind the soil. MM-31:F-7 Stockpiles and excavated soil shall be covered with secured tarps or plastic sheeting. CPC-200B-4953-CU-CUB-OA-ZAA-SPP-SPR-PA-MISC 2025 Avenue of the Stars C-12 MM-32:F-8 The Applicant shall comply with Ordinance No.172,176 and Ordinance No.173,494,as applicable,which specify Stormwater and Urban Runoff Pollution Control and require the application of BMPs. MM-33:F-9 The Applicant shall comply with Chapter IX,Division 70 of the Los Angeles Municipal Code (LAMC),as applicable,which addresses grading, excavations,and fills. IiIiI IiI II!i .i!I 1II ) !!I I IIIi ! 1 j IIi MM-34:F-10 The Applicant shall comply with the applicable requirements of the SUSMP approved by the Los Angeles Regional Water Quality Control Board. Mitigation Measures MM-35.MM-36,and MM-37shaH only apply if the version of the Proposed Project that is approved by the decision-makers includes retention of the Existing Hotel (e.q.,Option 8,Alternative 5). MM-35:F-11.During construction,underpinning shall be required to maintain the vertical support of the Existing Hotel.The underpinning may serve as part of the shorinq system to retain the earth beneath the Existing Hotel.The underpinning/shoring system shall be designed to support the latera! surcharge pressures from nearby existing footings that are not underpinned. The underpinning piles shall consist of steel wide flange sections and shall be utillzed to support the gravity loads of the Existing Hotel.The piles shall be deeply embedded into the ground ",'eU below the bottom of the excavation. The Existing Hotel shall be surveyed prior to the underpinning/shoring installation and monitored during excavation and construction until construction of the new parking structure is completed to at least the foundation level of the Rehabilitated Structure. MM-36:F-12 The soils underneath the Existing Hotel along the west edge of the Existing Hotel shall also be retained and secured by installing tieback anchors.The tieback anchors shall be deeply embedded underneath the Existing Hotel.Tie-back systems shall be desiqned such that the tie-backs do not interfere with existing utilities,basements,or foundations.Tie-backs shall each be tested to a specified test load in excess of the desig n anchor load. MM-37:F-13 Where temporary excavation slopes are planned,the stabillty of the slope shall be computed considering the location and loading of nearby structures such that there is a sufficient factor of safety for the sloped excavation.Also,where temporary shoring is utilized,.the stability of the shored excavation shall be computed considering nearby structures.During construction of the shoring system,lagging shall be placed as shoring is placed,and voids behind lagging boards shall be backfilled with a sand- cement slurry as the excavation progresses. MM-38:G-1 Prior to issuance of permits for any demolition/renovation activity involvlng a particular structure,a LBP assessment of each existing structure shall be conducted.LBP to be impacted by the Project shall be removed and disposed of as a hazardous waste in accordance with all applicable regulations.Such regulations that would be followed during demolition under Option A or renovation under Option B include Construction Safety Orders 1532.1 (pertaining to lead)from Title 8 of the California Code of regulations, and lead exposure guidelines provided by the U.S.Department of Housing and Urban Development The following LBP management practices shall be followed: CPC-200B-4953-CU-CUB-DA-ZAA-SPP-SPR-PA-MISC 2D25 Avenue of the Stars C-13 Preparation of surveys which include analysis (XRF and bulk sample collection and laboratory analysis)of impacted suspect coatings, glazings,or finishes prior to or during demolition!renovation. Preparation of plans and specifications detaiHng the proper englneenng controls,persona!protective equipment,and waste handling requirements to be utilized. Notlflcation to the California Department of public Health of lead abatement activities. Removal of LBPs to be impacted by renovation or demolition work prior to disturbance. Conducting work in accordance with Title 17 CCR Division 1,Chapter 8 and Title -8 Section 1532.1. Proper waste characterization in accordance with Title 22 CCR Disposal of LBPs as required by applicable regulations. Third party oversight,air monitoring,and wipe sampHng by certified personnel. MM~39:G-2 Prior to demolition/renovation activities involving a particular structure a survey shall be conducted to identify representative ERMs,approximate their quantities,and to determine proper handling and disposal requirements.A technical specification for inclusion into the Project manual shall be prepared detaillng the scope of work to be performed,the engineering controls to be utilized,and how waste materials shall be handled,transported,and disposed.Materials shall be diverted from landfills through recycfing and incineration means.All work shall be conducted in accordance with applicable federal,State,and local regulations including 40 CFR Part 761 of the Toxic Substances Control Act (TSCA),the Universal Waste Rule found in the California Code of Regulations,Title 22,division 4.5,and the Department of Toxic Substances Control's (DTSC)Electronic Waste Recycling Act. MM-40:G-3 The proposed new USTs shall be designed and sited in accordance with all applicable regulations.The Applicant shall ensure that the new USTs are registered with the LAFD,the State Department of TOx1C Substance Control. The proposed on-site USTs shall be installed and maintained in accordance with all applicable federal,State,and focal regulations including,but not limited to,the Resource Conservation and of ·the California Code of Regulations,Chapters 16 &18 of the California Health and Safety Code,and the City of Los Angeles Fire Code.DeSign features included on the tanks to prevent leaks GOuldinclude,but are not limited to,cathodic protection,leak detection and spill prevention. MM-41:G-4 Prior to issuance of building permits,the Applicant shall comply with applicable requirements for State Division of Oil,Gas,and Geothermal Resources (DOGGR)site plan review.If any portions of the former oil wells are encountered during excavation and construction,work shall stop at that location and the DOGGR shall be provided an opportunity to investigate the oil wells.If the DOGGR determines that a re-abandonment is required,this re-abandonment would be completed in accordance with all applicable federal,State,and local regulations,including but not limited to Title 14 of the California Code of Regulations,as well as with appropriate LAFD recommendations. MM-42:G--5 Prior to the issuance of bullding permits,a detailed methane investigation shall be conducted and a methane plan shall be prepared in CPC-2008-4953-CU-CUB-DA-ZAA-SPP-SPR-·PA-MISC 2025 Avenue of the Stars accordance with Chapter IX,Division 71 of the LAMe (Sections 91.7101 through 91.7104,and 91.7106 through 91.7107,and 91.7109).In accordance with P/BC 2002-101,site testing shall be scheduled either before,or 30 days after,any site grading~At least 26 shallow gas probes shall be installed within the footprint of the western portion of the podium structure (I.e.,the podium plaza deck)after demolition of the existing podium structure.Any mitigation measures necessary to reduce potential methane hazards on the Project Site shall be included in this plan.These measures could include,but are not limited to,a building methane Ventilation system.The Applicant shall follow the specifications identified in the LADBS'Standard Plan:Methane Hazard Mitigation. MM-43:G-6 Durlng excavation activities,qualified field technicians shall be on-site to monitor excavated soils for the presence of hydrocarbons.If hydrocarbons are found in excavated soils,these soils shall be stockpiled separately and properly disposed of in accordance with all applicable federal,State,and local regulations. MM-44:G-7 During construction and operation,all potentially hazardous materials used on-site shall be contained,stored,and used in accordance with manufacturers'instructions and handled in compliance with applicable standards and regulations. MM-45:G-10 Prior to the issuance of the demolition or building renovation permits for rehabilitation (whichever is required for the Project Option that is approved), the Applicant shall provide a letter to the LADBS from a California Certified Asbestos Consultant that a comprehensive asbestos survey of all suspect materials that shall be impacted by the Project have been identified.ACMs shall be removed from all areas that are directly disturbed by Project construction as well as adjoining areas when the removal is a logical extension of the construction work being completed.Further,ACM removal in undisturbed areas is not required.All ACM removal shall occur in compliance with'SCAQMD Rule 1403'and LAFD Rule 68,as well as other State and federal regulations.Specific requirements of Rule 1403 include: Implementation of a thorough survey of the affected fadlity prior to issuance of permits for any demolition or renovation activity,including inspection,identification,and quantification of all friable and certain non-friable ACMs. Surveys which include collection and analyses of representative asbestos building material samples,and quantification of these materials for asbestos abatement purposes prior to or during demo litlon/renovatlon. Preparation of plans and specifications detailing the proper engineering controls,personal protective equipment,and waste handling requirements to be utilized. Notification of the SCAQMD of the intent to demolish or renovate any facility at least ten days prior to commencing with the activity. Removal and encapsulation of all ACMs prior to any demolition or renovation activity that would break up,dislodge,or similarly disturb the material. Use of legally required procedures when removing ACMs.Placement of all collected ACMs in Jeak-tJghtcontainers or wrapping. Disposal of ACMs as required by applicable regulations. Third party oversight and air monitoring by certified personnel. CPC-2008-4953-CU-CU B-OA-ZAA-S PP-SP R-PA-M Isc 2025 Avenue OT the Stars C-15 MM-46:G-11 The existing 2,OOO-galfondiesel UST located on the southern portion of the Project Site shan continue to be maintained,relocated and/or upgraded (as required by code)in accordance with all applicable federal,State,and local regulations including,but not limited to,the Resource Conservation and Recovery Act,the California Hazardous Waste Control Law,Title 23 of the California Code of Regulations,Chapters 16 &i8 of the California Health and Safety Code,and the City of Los Angeles Fire Code. MM-47:H-1 The Proposed Project shall comply with the requirements of the applicable NPDES permit for stormwater discharge and wfth all applicable requirements of the RWOCB,EPA,and local agencies induding the City of Los Angeles regarding water quality. MM-48:H-2 The Proposed Project shall implement stormwater BMPs as required by the City to retain or treat the runoff from a storm event producing 0.75 inch of rainfaB in a 24-hour period.The design of structural BMPs shall be in accordance with the Development Best Management Practices Handbook Part B (Pfanning Activities).A signed certificate from a licensed civil engineer or licensed architect that the proposed BMPs meet this numerical threshold standard shall be provided. MM-49;H-3 All storm drain inlets and catch basins within the Project area shall be stenciled with prohibitive language (such as "NO DUMPING-DRAINS TO OCEAN")and/or graphical icons to discourage illegal dumping. MM-50:H-4 The legibility of signs and stencils discouraging illegal dumping shall be maintained. MM-51:H-5 Materials used on-site having the potential to contaminate stormwater shaH be:(1)placed in an enclosure such as,but not limited to,a cabinet, shed,or similar stormwater conveyance system;or (2)protected by secondary containment structures such as berms,dikes,or curbs. MM-52:J-1 The Proposed Project shall comply with the City of Los Angeles Noise Ordinance No.144,331 and 161,574,and any subsequent ordinances,which' prohibit the emission or creation of noise beyond certain levels at adjacent uses unless technically infeasible. MM-53:J-2 Noise and ground-borne vibration construction activities whose specific location on the Project Site may be flexible (e.g.,operation of compressors and generators,cement mixing,general truck idUng)shall be conducted as far as feasibly possible from the nearest noise-and vibration-sensitive land uses. MM-54:J-3 Construction activities shall be scheduled,as feasible,so as to avoid operating several pieces of equipment simultaneously,which causes high noise levels. MM~55:J-4 All on-site construction loading and staging areas shall be located as far as feasibly possible from tile nearest noise sensitive land uses located off- site. MM,56:J-5 During the site demolition and site preparation/excavation phases at the ,Project Site,temporary continuousbarriers such as plywood structures or CPC-2008-4953-CU-CUB-DA~ZAA~SPP-SPR-PA-MISC 2025 Avenue of the Stars C-16 flexible sound control curtains extending eight feet in height shall be erected ,along the perimeter of the Project Site between the Proposed Project and adjacent nolee-sensltive uses. MM-57:J-6 All construction truck traffic shall be restricted to truck routes approved by the City of Los Angeles Department of Building and Safety,which shall avoid residential areas and other sensitive receptors to the extent feasible. MM-58:J-7 The Proposed Project shan comply with the City of Los Angeles Building Regulations Ordinance No,178048,which requires a construction site notice to be provided that includes the following information:job site address;permit number;name and phone number of the contractor and owner or'owner's agent;hours of construction allowed by code or any discretionary approval for the site;and City telephone numbers where violations can be reported.The notice shall be posted and maintained at the construction site prior to the start of construction and displayed in a Iocation that is readily visible to the public and approved by the City's Department of Building and Safety, MM-59:J-8 The Proposed Project's Construction Staging and Traffic Management Plan (CSTMP)shall include a provision which requires that two weeks prior to the commencement of construction at the Project Site,notification shalt be provided to the immediately surrounding off-site residential uses that identifies the construction schedule,including the various types of activities and equipment that would be occurring throughout the duration of the construction period, MM-60:L-1!n order to allow for a waterflow of 12,000 gpm to the Project Site,a 12- inch line on Constellation Boulevard shall be constructed to replace a portion of the existing 8-inch line between Avenue of the Stars and Solar Way,The upgrade of this waterline on Constellation Boulevard between Avenue of the Stars and Century Park West has already been assigned to the applicant of the adjacent New Century Project as Mltigatlon Measure 1.1-1 of the New Century Plan EIR (State Clearinghouse No,2006061096).If construction of this improvement has not been completed by Westfield US Holding,LLC ("Westfield")prior to the receipt of a temporary Certificate of Occupancy for the residential component of the Proposed Project,the Project Applicant shall either install its portion of the line or provide payment of fees to the Los Angeles Department of Water and Power for its portion of the construction.If construction of the improvement has been completed by Westfield prior to the receipt of a temporary Certificate of Occupancy for the residential component of the Proposed Project,the Project Applicant shan have no further mitigation responsibilities with regard to water flow to the Project Site"If this requirement is satisfied through the payment of fees to the Los Angeles Department of Water and Power,the Project Applicant's fee shall consist of a fair share contribution subject to the approval of the Los Angeles Department of Water and Power.!f this requirement is satisfied through construction by the Project Applicant,'the design of the water llne shall be subject to the approval of the Los Angeles Department of Water and Power and the Los Angeles Fire Department tvlM-61:l-2 Prior to issuance of a certificate of occupancy,the Applicant shall develop a Fire Resources Management Plan for the Proposed Project in consultation with the Los Angeles Fire Department.In developing this plan CPC-200S-4953-CU-CUS-DA-ZAA-SPP-SPR-PA-MISC 2025 Avenue of the Stars C-17 the Applicant shall consult with the Los Angeles Fire Department regarding potential staffing and equipment needs associated with the Proposed Project. MM-62:L-3 Prior to the issuance of building permits,the Project applicant shall consult with the Los Angeles Police Department Crime Prevention Unit regarding crime prevention features that the Department considers appropriate for the final design ofthe property. MM-63:LA After Project completion,the Applicant shall provide to the West Los Angeles Area Commanding Officer of the Los Angeles Police Department with a diagram of each portion of the Project Site showing access routes and additional information,as requested by the LAPD,to facilitate police response. MM~64:L-5 The Project Apptlcant shall pay aU applicable school fees mandated by SB 50 to the LAUSD to offset the impact of additional student enrollment at schools serving the Project area. MM-65:L-6 For any shortfaH in the provision of recreational facilities and parks pursuant to the requirements of LAMe Section 17.12,the Project Applicant shall pay in-lieu fees for the dedication of park land as established by LAMe Section 17.12.IIiIiII IIiiIIII! 1 IIII I!I !!i MM-66:L-7 The Project Applicant shall pay a mitigation fee of $200 per capita,based on the projected resident population of the proposed development,to the Los Angeles Public Library to offset the impact of additlonallibrary facility demand in the Project Area. MM-67:M-1 Prior to the issuance of demolition and construction permits for the Proposed Project,a Constr.uction Staging and Traffic Management Plan (CSTMP)shall be prepared and approved by LADOT and other appropriate agencies,and implemented during Proposed Project construction.The CSTMP shall describe the traffic control measures and devices to be implemented for the various construction phases,along with any sidewalk closures,traffic lane closures,temporary walkway installations,K-raH installations,temporary traffic lane modifications,'·temporary 'signal modifications,etc.The CSTMP shall also include the name and phone number of a contact person Who can be reached 24 hours a day regarding construction traffic complaints or emergency situations.In addition,the CSTMP shall take into account and be coordinated with other Construction. Staging and Traffic Management Plans that are in effect or have been proposed for other projects in Century City. MM-68:M-2 Pedestrian access shall be maintained on Avenue of the Stars,Solar Way and Century Drive around the Project Site. MM~69:M-3 Construction vehicles,including construction personnel vehicles,shall not park on public streets,including streets outside Century City, MM-70:M-4 Construction vehicles shall not stage or queue where they interfere with pedestrian and vehicular traffic or block access to nearby businesses. CPC-2008-4953-CU-CU8-DA-ZAA-SPP-SPR-PA-MISC 2025 Avenue of the Stars C-18 MM-71:M-5 Any staging of construction vehicles on public streets,including streets outside Century City,shall be approved by LADOT and,if necessary,other appropriate agencies. MM-72:M-6 If necessary,any trafflc fane closures shall be limited to off-peak traffic periods,as approved by LADOT. MM-73:M-7 Flag persons in adequate number shall be provided to minimize impacts to traffic flow,and to ensure the safe access into and out of the Project Site. MM-74:M-8 To the extent feasible,the delivery of construction materials shall be scheduled during off-peak traffic periods. MM-75:M-9 Heavy-duty construction vehicles,except haul trucks,shall arrive at the site no earlier than 7:00 A.M.and depart no later than 6:00 P.M. MM-76:M-10 The hours and operation of haul trucks transporting demolished materials and excavated soil from the site shall be determined and approved by the City's Department of Building and Safety prior to the Issuance of demolition and grading permits. MM-77:M-11 Dedicated turn lanes shall be provided for movement of construction trucks and equipment,where space is available and would not result in a safety concern for pedestrians and motorists. MM-78:tv1-14 The Conditions of Approval for the Proposed Project shall require that construction contracts prohibit construction workers from traversing through residential areas and require construction workers to use arterial streets to access the Project Sfte. MM-79:.N-1 The landscaped irrigation system shall be designed,installed,and tested to provide uniform irrigation coverage for each zone.Sprinkler head patterns shall be adjusted to minimize over spray onto walkways and streets.Each zone {sprinkler valve)shall water plants having similar watering needs (I.e., do not mix shrubs,flowers and turf in the same watering zone). MM-80:N-2 Automatic irrigation timers shall be set to water landscaping during early morning or tate evening hours to reduce water losses from evaporation. Irrigation run times for aU zones shall be adjusted seasonally,reducinp water times and frequency in the cooler months (fall,winter,spring).Sprinkler timer run times shall be adjusted to avoid water runoff,especially when.irrigating sloped property. MM-81:N-3 Selection of drought-tolerant,low water consuming plant varieties shall be used to reduce irrigation water consumption.For a list of these plant varieties,refer to Sunset Magazine,October 1988,"The Unthirsty 100," pages 74-83,or consult a landscape architect. MM-82:N-4 The Project Applicant shall instal!ultra-low-flush high-efficiency toilets, ultra-low-flush high-efficiency urinals,and water-saving showerheads must be installed and limited to one showerhead per shower stall.Low flow faucet aerators shall be installed on all sink faucets. 8.Locate the sign in a conspicuous place on the subject site or structure (if developed)so that the public can easily read it The sign must be sturdily attached to a wooden post if it wi!!be freestanding. ere-2008-4953-C lJ-CU B-DA-ZAA-S PP··S PR-PA-M ISC 2025 Avenue of the Stars MM-83:N-5 The Project Applicant shall install domestic water heating systems located in close proximity to point(s)of use,as feasible;use of tank-less and on-demand water heaters as feasible. MM-84:N-6 The Project Applicant shall install high-efficiency clothes washers where clothes washers are provided,and high-efficiency dishwashers (Energy Star rated)shall be installed where dishwashers are provided. MM-85:N-7 In an effort to assist the City of Los Angeles in achieving compliance with AB 939 and to support recycling of operational wastes,the Proposed Project would include a residential recycling program. 35.Construction Mitigation Conditions -Prior to the issuance of a grading or building permit the Applicant shall prepare and execute a Covenant and Agreement (Planning Department General Form CP-6770)in a manner satisfactory to the Planning Department binding the Applicant and all successors to the following: CM-1 That a sign,be required on site clearly stating a contact/complaint telephone number that provides contact to a live voice,not a recording or voice mall,during aU hours of construction,the construction slte address,and the tract map number,YOU ARE REQUIRED TO POST THE SIGN 7 DAYS BEFORE CONSTRUCTiON IS TO BEGIN. b.Regardless of who posts the site,it is always the responsibility of the applicant to assure that the notice is firmly attached,legible,and remains in that condition throughout the entire construction period. c.If the case involves more than one street frontage,post a sign on each street frontage involved.If a site exceeds five (5)acres in size,a separate notice of posting will be required for each five (5)acres,or portion thereof.Each sign must be posted in a prominent location. CM-2 The applicant shall ensure the following construction Best Management Practices is incorporated within the Storm Water Pollution Prevention Plan (SWPPP): a,Chapter IX,Division 70b of the Los Angeles Municlpal Code addresses grading,excavations,and fills.All gradIng activities shall require grading permits from the Department of Building and Safety. b.Excavation and grading activities shall be scheduled during dry weather periods.If grading occurs during the rainy season (October 15 through April 1),diversion dikes shall be constructed to channel runoff around the site.Channels shall be lined with grass or roughened pavement to reduce runoff velocity. c.Appropriate erosion control and drainage devices shall be provided to the satisfaction of the Building and Safety Department.These measures Include interceptor terraces,berms,vee-channels,and inlet and outlet CPC-2008-4953-CU ..CUB-DA-LAA-SPP-SPR-PA-MISC 2025 Avenue of the Stars C-20 structures,as specified by Section 91.7013 of the Building Code, including planting fast-growing annual and perennial grasses [n areas where construction is not immediately planned. d.Stockpiles and excavated soil shall be covered with secured tarps or plastic sheeting. e.All waste shall be disposed of properly.Use appropriately labeled recycling bins to recycle construction materials including:solvents,water- based paints,vehicle fluids,broken asphalt and concrete,wood,and vegetation.Non recyclable materials/wastes must be taken to an appropriate landfill.Toxic wastes must be discarded at a licensed regulated disposal site. f.Clean up leaks,drips and spills immediately to prevent contaminated soil all paved surfaces that can be washed away into the storm drains. g.Do not hose down pavement at material spills.Use dry cleanup methods whenever possible. h.Store trash dumpsters either under cover and with drains routed to the sanitary sewer or use non-leaking or water tight dumpsters with lids. Wash containers in an area with properly connected sanitary sewer. L Use gravel approaches where truck traffic is frequent to reduce soil compaction and limit the tracking of sediment into streets. j.Conduct all vehicle/equipment maintenance,repair,and washing away from storm drains.All major repairs are to be conducted off-site.Use drip pans or drop cloths to catch drips and spills. CM-3 The owner or contractor shall keep the construction area sufficiently dampened to control dust caused by construction and hauling,and at all times provide reasonable control of dust caused by wind. CM-4 All loads shall be secured by trimming,watering or other appropriate means to prevent spillage and dust. CM~5 Ground cover in disturbed areas shall be quickly replaced. CM-6 All on-site haul roads shall be watered twice daily While in USE?during construction activities. CM-7 Vehicle speed on unpaved roads shall be reduced to less than 15 miles per hour (mph). CM-8 The project developer shall provide temporary traffic control during all phases of construction to assist with the improvement of traffic flow. CM-9 The project developer shall require by contract specifications that all diesel- powered construction equipment and haul trucks used would be retrofitted with after-treatment products (e.g.,engine catalysts)to the extent that it is economically feasible and readily available in the South Coast Air Basin. CPC-2008-4953-C U-C UB-DA-ZM-8P P-8 PR~PA-MISC 2025 Avenue of the St~JS C-21 CM-i0 The'project developer shall require contract specifications that alternative fuel construction equipment (Le.,compressed natural gas,liquid petroleum gas,and unleaded gasoline)would be utilized to the extent that it is economically feasible and the equipment is readily available in the South Coast Air Basin. CM-11 The project developer shall utilize low-VaG paints on air portions of the proposed structures. CM-12 Genera!contractors shall maintain and operate construction equipment so as to .'minimize exhaust emissions .. CM-13 General contractors shall maintain and operate construction equipment so as to minimize exhaust emissions. CM-14 Construction and demolition shall be restricted to the hours of 7:00 am to 6:00 pm Monday through Friday,and 8:00 am to 6:00 pm on Saturday. CM~15 Construction and demolition activities shall be scheduled so as to avoid operating several pieces of equlpment simultaneously,which causes high noise levels. CM-16 The project contractor shall use power construction equipment with state-of-the- art noise shielding and muffling devices. CM-17 The project sponsor shall comply with the Noise insulation Standards of Title 24 of the California Code Regulations,which insure an acceptable interior noise environment. 0,Administrative Conditions: 1.Approval,Verification and Submittals.Copies of any approvals,guarantees or verification of consultations,review or approval,plans,etc.,as may be required by the subject conditions,shall be provided to the Planning Department for placement in the subject file. 2.Code Compliance.Area,height and use regulations of the C2 zone classification of the subject property shall be complied with,except where herein conditions are more restrictive. 3.Master Covenant.Prior to the issuance of any permits relative to this matter,an agreement concerning all the information contained in these conditions shall be recorded in the County Recorder's Office.The agreement shall run with the land and shall be binding on any SUbsequent property owners,heirs or assign.The agreement must be submitted to the Planning Department for approval before being recorded,After recordation,a copy bearing the Recorder's number and date shall be provided to the Planning Department for attachment to the file. 4.Definition.Any agencies,public officials or legislation referenced in these,conditions shall mean those agencies,public officlals,legislation Of their successors,designees or amendment to any legislation. 5.Enforcement.Compliance with these conditions and the intent of these conditions shall be to the satisfaction of the Planning Department and any designated agency,or the CPC-2008-4953-CU-CUB-DA-ZAP,-SPP-SPR-PA-MISC 2025 Avenue of the Stars C-22 agency's successor and in accordance with any stated laws or regulations,or ally amendments thereto. 6..Project Plan Modifications.Any corrections and/or modifications to the Project plans made subsequent to this grant that are deemed necessary by the Department of Building and Safety or other Agency for Code compliance,and which involve a change in site plan,floor area,parking,building height,yards or setbacks,building separations, or lot coverage,shall require a referral of the revised plans back to the Department of City Planning for additional review and final sign~off prior to the issuance of any building permit in connection with said plans.This process may require additional review and/or action by the appropriate decision making authority including the Director of Planning, City Planning Commission,Area Planning Commission,or Board. 7.Corrective Conditions.The authorized use shall be conducted at all times with due regard for the character of the surrounding district,and the right is reserved to the City Planning Commission,or the Director of Planning,pursuant to Section 12.27.1 of the Municipal Code,to impose additional corrective conditions,if in the decision makers opinion,such actions.are proven necessary for the protection of persons in the neighborhood or occupants of adjacent property. 8.Indemnification.The applicant shall defend,lndemnlfy and hold harmless the City,its agents,officers,or employees from any claim,action,or proceeding against the City or its agents,officers,or employees to attack,set aside,void or annul this approval which action is brought within the applicable limitation period.The City shall promptly notify the applicant of any claim,action,or proceeding and the City shall cooperate fuily in the defense.If the City fails to cooperate fully in the defense,the applicant shall not thereafter be responsible to defend,indemnify or hold harmless the City. 9.Utilization of Concurrent Entitlement.Pursuant to CPC-2008-4953-CU-CUB~DA-ZJlA- SPP-SPR-PA-MISC,the'subject,Conditional Use -Hotel Uses within in 500 feet of residential uses,Conditional Use for a Master Alcohol Permit;Development Agreement, Zoning Administrator's Adjustment for reduced yards,Specific Plan Project Permit Compliance,SIte Pian Review,Plan Approval for relocating telecommunication facilities, and Miscellaneous Entitlement Approval to relocate the Pedestrian Corridor requires completion of all applicable conditions of approval herein to the satisfaction of the Department of City Planning shall coincide with the term of the Development Agreement, as approved and recommended by the City Planning Commission,and adopted by the City Council. VESTING TENTATIVE TRACT MAP NO.71688-CC PAGE 2 BUREAU OF ENGINEERING ~SPECIFIC CONDITIONS 1.That a 2-foot variable width public sidewalk easement be provided at grade along Constellation boulevard adjoining the portion of the subdivision to complete a 45- foot half right-ot-way dedication in accordance with Secondary Highway Standards including a 20-foot radius property line return easement at the intersection with Avenue of the Stars. 2.That the grading plans for excavation adjoining the public right-at-way be submitted for approval to Geotechnical Engineering Division.This condition can be cleared by West Los Angeles Engineering District. DEPARTMENT OF BUILDING AND SAFETY,GRADING DIVISrON 3.Comply with any requirements with the Department of Building and Safety, Grading Division for recordation of the final map and issuance of any permit. DEPARTMENT OF BUILDING AND SAFETY,ZONING DIVISION 4.Prior to recordation of the final map,the Department of Building and Satety, Zoning Division shall certify that no Building or Zoning Code violations exist on the subject site.In addition,the following items shall be satisfied: a.Provide a copy of building records,plot plan,and certificate of occupancy of all existing structures to verify the last legal use and the number of parking spaces required and provided on each site. b.Obtain permits for the demolition or removal of all existing structures labeled to be demolished on the site.Accessory structures and uses are not permitted to remain on lots without a main structure or use.Provide copies of the demolition permits and signed inspection cards to show completion of the demolition work. c.The submitted Map dimensions do not agree with ZIMAS.Revise the Map to address the discrepancy or provide a copy of the Certificate of Compliance for the Jotline adjustment to match the submitted Map prior to obtaining Zoning Clearance. d.Provide a copy of affidavit PKG-5650,PKG-5136,PKG-5126,AFF~58027, AFF-55700,J1,FF-55360,AFF-55356,AFF-54365,AFF-50807-CC,AFF- 50806-Ce,AFF-50805-CC,AFF-50803-CC,AFF-48683,AF-94~2186051- TCA,AF-94-2186050-0P,AF-94-222834-L T,AF-93-222833-LT,AF-92- 1745107-LT,AF-92-1745106-LT,and PKG-LAYOUT-144.Show compliance with all the condltlons/requirements of the above affidavit(s)as applicable.Termination of above affidavit(s)may be required after the VESTING TENTATIVE TRACT MAP NO.71688~CC PAGE 3 Map has been recorded,Obtain approval from the Department,on the termination form,prior to recording. e.Show all street easements(s)as required by Bureau of Engineering. "Area"requirements shall be rechecked as per net lot area after street dedication.Front and side yard requirements shall be required to comply with current code as measured from new property lines after dedication(s). f.Required parking spaces are required to remain for the remaining structure on the site,Show location of all parking spaces and access driveways.Provide copies of permits and final inspection cards,for any new garages or carports. g.Obtaintand use permits to relocate driveways and all required parking for each building onto their correspondence sites.Provide a copy of permits and signed inspection cards to show work has been completed. h.Record a Covenant and Agreement to treat the buildings and structures located in an Air Space Subdivision as if they were within a single lot. DEPARTMENT OF TRANSPORTATION 5.Prfor to recordation of the final map,satisfactory arrangements shall be made with the Department of Transportation to assure: a.A eO-foot reservoir space shall be provided,at a minimum,between the final property line (after any dedication)and: (1)Any security gate. (2)Any parking stall. (3)Any guest intercom. b.Comply with the requirements and recommendations listed under the Department of Transportation Assessment Letter dated August 31,2010 for DOT Case Number WLA09-009,Option'B with Office &Revised Option B without Office, c.The project is subject to the West Los Angeles Transportation Improvement and Mitigation Specific Plan requirements.A parking area and driveway plan shall be submitted to DOT for approval prior to submittal of building permit plans for plan check by the Department of Building and Safety.Final DOT approval should be accomplished by submitting detailed site/driveway plans at a scale of 1":::40'to DOT's WLNCo8sta!Development Review Section at 7166 West Manchester Avenue,Los Angeles,90045.(MM) VESTING TENTATIVE TRACT MAP NO.71688-CC PAGE 4 FIRE DEPARTMENT 6.Prior to the recordation of the final mall,a suitable arrangement shall be made satisfactory to the Fire Department,binding the subdivider and all successors to the following:,(MM) a.No building or portion of a building shall be constructed more than 300 feet from an approved fire hydrant Distance shall be computed along path of travel. 1 I rb.Any required fire hydrants to be installed shall be fully operational and accepted by the Fire Department prior to any building construction. c.No framing shall be allowed until the roadway is installed to the satisfaction of the Fire Department. d.Private streets shall be recorded as Private Streets,AND Fire Land.AU private street plans shall show the words "Private Street and Fire lane" within the private street easement. e.All parking restrictions for fire lanes shall be posted and/or painted prior to any Temporal)'Certificate of Occupancy being issued. f.Plans showinq areas to be posted and/or painted,"FIRE LAND NO PARKING"shall be submitted and approved by the Fire Department prior to building permit application siqn-off. g.Where rescue window access is required,provide conditions and improvements necessary to meet accessibility standards as determined by the Los Angeles Fire Department h.Building designs for multi-storied residential buHdings shall incorporate at least one access stairwell off the main lobby of the'building;but,in no case greater than 150 feet of horizontal travel distance from the edge of the public street,private street or fire lane.This stairwell shall extend unto the roof. L Entrance to the main lobby shall be located off the address side of the bullding. j.Any required Fire Annunciator panel or Fire Control Room shall be located within 50 feet visual line of site of the main entrance stairwell or to the satisfaction of the Fire Department. VESTING TENTATIVE TRACT MAP NO.71688-CC PAGE 5 DEPARTMENT OF WATER AND POWER "1.Satisfactory arrangements shall be made with the Los Angeles Department of Water and Power (LADWP)for compliance with l.ADWP's Water System Rules and requirements.Upon compliance with these conditions and requirements, LADWP's Water Services Organization will forward the necessary clearances to the Bureau of Engineering.(This condition shall be deemed cleared at the time the City Engineer clears Condition No.S-41.(c).) BUREAU OF STREET LIGHTING 8.If new street light(s}are required,then prior to the recordation of the final map or issuance of the Certificate of Occupancy (C of 0),street lighting improvement plans shall be submitted for review and the owner shall provide a good faith effort via a ballot process for the formation or annexation of the property within the boundary of the development into a Street Lighting Maintenance Assessment District.(This condition shall be deemed cleared at the time the City Engineer clears Condition No.8-3.(c).) BUREAU OF SANITATION 9.Satisfactory arrangements shall be made with the Bureau of Sanitation, Wastewater Collection Systems Division for compliance with its sewer system review and requirements.Upon compliance with its conditions and requirements, the Bureau of Sanitation,Wastewater Collection Systems Division will forward the necessary clearances to the Bureau of Engineering.(This condition shall be deemed cleared at the time the City Engineer clears Condition No.8-i.(d).) INFORMATION TECH NOLOGY AGENCY 10.That satisfactory arrangements be made in accordance with the requirements of the Information Technology Agency to assure that cable television facllitles wlll be installed in the same manner as other required improvements.Refer to the LAMe Section 17.05~N.Written evidence of such arrangements must be submitted to the Information Technology Agency,200 North Main Street,12th Floor,Los Angeles,CA 90012,213922-8363. DEPARTMENT OF RECREATiON AND PARKS 11.That the Quimby fee be based on the R4 Zone and the requirements of LAMe Section 17.12.(MM) VESTING TENTATIVE TRACT MAP NO.71688~CC PAGE 6 URBAN FORESTRY DIVISiON AND THE DEPARTMENT OF CITY PLANNING 12.Prior to the issuance of a grading l2ermit,a plot plan prepared by a reputable tree expert,indicating the location,size,type,and condition of all existing trees on the site shall be submitted for approval by the Department of City Planning.All trees in the public right-af-way shall be provided per the current Urban Forestry Division standards. Replacement by a minimum of one 24-inch box tree in the parkway and on the site for each non-protected street to be removed for the unavoidable loss of desirable trees on the site,and to the satisfaction of the Advisory Agency.(MM) Note:Removal of all trees in the public right-of-way shall require approval of the Board of Public Works.Contact:Urban Forestry Division at:(213)485-5675. Failure to comply with this condition as written shall require the filing of a modification to this tract map in order to dear the condition. DEPARTMENT OF CITY PLANNING..sITE SPECIFIC CONDITIONS 13.Prior to the recordation of the final maR,the subdivider shall prepare and execute a Covenant and Agreement (Planning Department Genera!Form CP-6770)in a manner satisfactory to the Planning Department,binding the subdivider and all successors to the following: a.Limit the proposed development to the following: (1)280 residential condominium units (2)10 accessory housekeeping units (3)63 condominium units within existing hotel (4)394 hotel guest rooms (5)26,250 square feet of hotel meeting room/ballroom space (6)1,900 square feet of hotel retail space (7)14,100 square feet of hotel spa and fitness center space (8)9,100 square feet of hotel restaurant space (9)93,840 square feet of non-hotel commercial retail/restaurant floor area b.Parking shall be provided in accordance with LAMe Section 1221··A,4 and Advisory Agency requirements for guest parking.In addition,parking shall include 400 off-site parking spaces to be located at the Century West parking.structure (2030 Centu ry Park West).Any guest spaces shall be readily accessible,conveniently located,specifically reserved for guest parking,posted and maintained satisfactory to the Department of Building and Safety. VESTING TENTAT!VE TRACT MAP NO.71688-CC PAGE 7 If guest parking spaces are gated,a voice response system shall be installed at the gate.Directions to guest parking spaces shall be dearly posted.Tandem parking spaces shall not be used for guest parking. In addition,prior to issuance of a building permit,a parking plan showing off-street parking spaces,as required by the Advisory Agency,be submitted for review and approval by the Department of City Planning (200 North Spring street,Room 750). c.Prior to issuance of a certificate of occupancy',a minimum 6-foot-high slumpstone or decorative masonry waH shall be constructed adjacent to neighboring residences,lf no such wall already exists,except in required front yard. d.The applicant shall install an air filters capable of achieving a Minimum Efficiency Rating Value (MERV)of at least 11 or better in order to reduce the effects of diminished air quality on the occupants of the project.(MM) e.That a solar access report shall be submitted to the satisfaction of the Advisory Agency prior to obtaining a gra.ding permit. f.That the subdivider considers the use of natural gas and/or solar energy and consults with the Department of Water and Power and Southern California Gas Company regarding feasible energy conservation measures. g,Recycllng bins shall be provided at appropriate locations to promote recycling of paper,metal,glass,and other recyclable material.(MM) h.The applicant shall install shielded lighting to reduce any potential illumination affecting adjacent properties.(MM) 14.Prior to the clearance of any trayt map conditions,the applicant shall show proof that all fees have been paid to the Department of City Planning,Expedited Processing Section, 15.Prior to the issuance of the building permit or the recordation of the final map,a copy of the CPC-20084953-CU-CUB-DA-ZM~SPP-SPR-GB shall be submitted to the satisfaction of the Advisory Agency.In the event that CPC-2008-4953-CU- CUB-DA-ZM-SPP-SPR-G8 is not approved,the subdivider shalt submit a tract modification. 16.Prior to issuance of a building permit,the applicant will acquire Trips consistent with and as allowed by the CCNSP and will record a covenant describing the VESTING TENTATIVE TRACT MAP NO.71688-CC PAGE 8 transferred Trips aqalnst the subject property,making the project consistent with the Trip requirements of the CCNSP, 17.Prior to the issuance of a grading permit,the subdivider shall record and execute a Covenant and Agreement (Planning Department General Form CP-6770). binding the subdivider to the following haul route conditions:(MM) a.The project is limited to the export of 412,200 cubic yards of material b.Streets to be used are limited to:Constellation Boulevard,Avenue of the Stars,Santa Monica Boulevard,1-405 Freeway.If the destination is the Chiquita Canyon Landfill,the route will continue along,1-5 Freeway,Exit 172,Newhall Ranch Road,Henry Mayo Drive to the Chiquita Canyon Landfill entrance. c.Hauling hours of operation shall be from 7:00 a.m.to 5:00 p.m.Monday through Friday and 6:00 a.rn.to 3:00 p.rn.on Saturday.Trucks shall not arrive at the construction site before the prescribed start time. d.Trucks shall be restricted to is-wheel dump trucks or smaller. e.Ali staging shall be on-site or adjacent to the site.Alternatively,an off-site and off-street location shall be selected and trucks can be radioed into site. f.The Traffic Bureau of the Los Angeles Police Department shall be notified prior to the start of hauling (213.485.3106). g.Streets shall be cleaned of spilled materials at the termination of each work day. h.The final approved haul routes and all the conditions of approval shall be available on the job site at an times. i.The owner or contractor shalf keep the construction area sufficiently dampened to control dust caused by grading and hauling,and at aU times provide reasonable control of dust caused by wind. j.Hauling and grading equipment shall be kept in good operating condition and muffled as required by law. k.An loads shall be secured by trimming,watering or other appropriate means to prevent spillage and dust VESTING TENTATIVE TRACT MAP NO.71688-CC PAGE 9 L AU trucks are to be watered at the job site to prevent excessive blowing dirt. m,All trucks are to be cleaned of loose earth at the job site to prevent spilling. Any material spilled on the public street shall be removed by the contractor. n.The applicant shall be in conformance with the State of California, Department of Transportation,policy reqardinq 'movements of reducible loads. o.All regulations set forth in the State of California Department of Motor Vehicles pertaining to the hauling:of earth shall be complied with. p."Truck Crossing"warning signs shall be placed 300 feet in advance of the exit in each direction. q.One flag person(s)shall be required at the job and dump sites to assist the trucks in and out of the project area.Flag person(s)and warning signs shall be in compliance with Part II of the 1985 Edition of "Work Area Traffic Control Handbook." r,The City of Los Angeles,Department of Transportation,telephone 213,485.2298,shall be notified 72 hours prior to beginning operations in order to have temporary "No Parking"signs posted along the route. s.Any desire to change the prescribed routes must be approved by theconcernedgovernmentalagendesbycontactingtheStreetUseInspection Division at 213.485.3711 before the change takes place. t The permittee shall notify the Street Use Inspection Division,. 213,485.3711,at least 72 hours prior to the beginning of hauling operations and shall also notify the Division immediately upon completion of hauling operations. u.A surety bond shall be posted in an amount satisfactory to the City Engineer for maintenance of haul route streets.The forms for the bond will be issued by the West Los Angeles District Engineering Office,1828 Sawtelle Boulevard,3fd Floor,Los Angeles,CA 90025.Further information regarding the bond may be obtained by caHfng310.575.8388. 18.Indemnification.The applicant shall defend,indemnify and hold harmless the City,its agents,officers,or employees from any claim,action,or proceeding against the City or its agents,officers,or employees to attack,set aside,void or VESTING TENTATIVE TRACT MAP NO.71688~CC PAGE 10 annul this approval which action is brought within the applicable limitation period. The City shall promptly notify the applicant of any claim,action,or proceeding and the City shall cooperate fully in the defense.If the City fails to promptly notify the applicant of any claim action or proceeding,or if the City fails to cooperate fully in the defense,the applicant shall not thereafter be responsible to defend,indemnify,or hold harmless the City. DEPARTMENT OF CITY PLANNJNG~ENVIRONMENTAL MITIGATION MEASURES 19.Prior to recordation of the final map the subdivider shall prepare and execute a Covenant and Agreement (Planning Department General Form CPe6770)in a manner satisfactory to the Planning Department requiring the subdivider to identify mitigation monitors who shall provide periodic status reports on the implementation of mitigation items required by Mitigation Condition Nos.11,12, 13d,13g,13h,17,20 and 21 of the Tract's approval satisfactory to the Advisory Agency.The mitigation monitors shall be identified as to their areas of responsibility,and phase of intervention (pre-construction,construction, postconstruction/maintenance)to ensure continued implementation of the above mentioned mitigation items. 20.Prior to the recordation of the final map,the subdivider shall prepare and execute a Covenant and Agreement (Planning Department General Form CP-6770)in a manner satisfactory to the Planning Department,binding the subdivider and all successors to the following: If an archaeological resource is encountered,construction activities shall be diverted and a qualified archaeologist shan be consulted. The archaeologist shall assess the significance of the exposed archaeological discovery in accordance with all relevant California Register of Historical Resources criteria.If the resource is historically significant,and [f it is not possible to construct the Proposed Project without disturbance of the archaeological resource,a data recovery plan shall be implemented unless the qualified archaeologist determines that testing or studies already completed have adequately recovered the scientifically consequential information from and about the resource.The data recovery plan,If needed,shall set forth the size of the sample to be acquired,the methods and techniques of excavation,methods and techniques of laboratory studies to be conducted,documentation procedures,and the place where all materials and documentation will be curatsd.All work required by this Mitigation Measure shall be undertaken In a manner that minimizes disruption and delay to the Proposed Project. DEPA!~TM~Nl OFCITYnANNINC 200 N.SrklNc 5Tmr,ROOM 525LOlANGEI.El,Q\90012·4801AftD&262 VAHNlIVSlRVO.,Sum 351VANNlm,CA \11401 ClTV PLANN!~!G COMMISSION WIlliAM ROSC11EN.'!5IDfNTRECINAM.fRl'ERVlCH~rsIDl'NT SfAN 0.6URTONOltGOCARDOSOCEORGfHOVAGulMIANjllSTINlGMRO~~Rr LfSSINDANAM.PERI.MANIlAR.RARAROMERO )illv\1IS W1WA'MS •CC».'IMIS'S!.ONe.z:tQ.f1'I'k 1\.~:S-tsTN""tII (lD)97a·lJOO CITY OF Los ANGE:LE:S CAUFORNJA E)(~CUnYE OH'IC'S ANTONIO R.VII.I..ARAIGO$A MAYOR August 14,2012 Next Century Associates,Ll.C(A)(O)RE: 1999 Avenue ofthe Stars,Suite 2850 Los Angeles,CA 90067 Century City Garage Partners,LP(O) 2030 Century Park West Los Angeles,CA 90067 John Cblappe (E) PSOMAS 555 South Flower Street Los Angeles,CA 90071 M10I,\Et J.LOGRANDE DIW;TO~1213)978·1271 A~AN DEll,AICPOErt.IlV OIR{(..IOR(21~J$7!1-1272 LISAM.WWBER,tiler D[NlYP..,qO~ r2~~)S76·127'1 WIIYUAH-MCDANI~l ()Ei'lJf'IOlMCro~(213)976,1273 fAX:\~UI 97U,H7S INFORMATION wv..w.plannlng.l.city.(>tg Tract Map No.:71688-CC Address:2025 South Avenue of the Stars, 2030 Century Park West,and 10220 West Oonstellation Boulevard Community Plan:West Los Angeles Zone:C2-2~O Counoil District;5 CEQA No.:ENV-2008-4950-EIR Letter of Correction On August 1,2012,in accordance with provisions of Los Angeles Munloipal Code Sedlon 17,03,the Advisory Agency approved Vesting Tentative Tract Map No.71688 composed of one Master Lot and 59 AIrspace Lots,located at 2025 South Avenue of the Stars,2030 Century Park West,and 10220 West Constellation Boulevard for a maximum'of 63 pew condominium units in the rehabilitated hotel,280'oondominium units)and 10 housekeeping units in the two towers.The appeal period ended on August 13,2012 with no appeals filed, However,two instances \"Iithin the determination inadvertently and incorrectly stated a total of 280 condominiums in lieu of 290 condominium units would be provided within the two towers as IS depicted on the tract map that was approved with the Advisory Agency's action stamp-dated May 4,2012,As such,the following portions of the determination letter'are corrected to read as follows: VTT"71688-CC LETTER OF CORRECTION PAGE 2 Grant Claus~~. In accordance with provisions of Los Angeles Municipal Code (LAMe)Section 17.03 of the,the AdvIsory Agency approved Vesting Tentative TractMap No,71688 composed of one Master Lot and 59 Airspace Lots,located at 2025 South Avenue of the Stars, 2030 Century Park West,and 10220 West Constellation Boulevard for a maximum of 63 new condominium units in the rehabilitated hotel,~O 290 condominium units, and 10 housekeeping units in the two towers as shown on map stamp-dated May 4, 2012 in the West Los Angeles Community Plan,This unit density is based on the R4 Zone,(The subdivider is hereby advised that the LAMe may not permit this nlaximum approved density.Therefore,verification should be obtained from the Department of Building and Safety,which will legally lnterpret the Zoning code as it applies to this particular property.)For an appointment with the Subdivision Counter call (213)482- 7077.The Advisory Agency's approval is SUbject to the fQllow[ng conditions: Conditions: 13.Prior to the recordation ofthe final map,the subdivider shall prepare and execute a Covenant and Agreement (Planning Department Genera!Form CP-6770)in a manner satisfactory to the Planning Department,binding the subdivider and aU successors to the following: a.Limit the proposed development to the followlnq; (1)~290 residential condominium units AU other conditions of approval shall remain unchanged. Michael LoGrande Advisory Agency ~.>~-:JIM TOKUNAGA ") Deputy Advisory A ncy JT;U cc:Councilmernber Paul Koretz Fifth District EXHIBIT "e" MITIGATION MONITORlNG PROGRAM 30 Iv..M~tigationMonitoring and_Repo~tingProgram 1.Introduction The California Environmental Quality Act rCEQA")requires a Mitigation Monitoring and Reporting Program ("MMRP")for projects where mitigation measures are a condition of their approval and development An Environmental.Impact Report ("EIR")has been prepared to address the potential environmental impacts of the proposed Project Where appropriate,the EtR Includes recommended mitigation measures to avoid or substantially lessen the significant environmental impacts associated with the Proposed Project.This MMRP is designed to monitor implementation of these mitigation measures.This MMRP has been prepared in compliance with the requirements of CEQA,Public Resources Code Section 21081.6,and Section 15097 of the CEQA Guidelines.This MMRP describes the procedures the Applicant shall use to implement the mitigation measures adopted in connection with the approval of the Proposed Project and the methods of monitoring and reporting on such actions."Monitoring"is generally an ongoing or periodic process of project oversight."Reporting"generally consists of a written compliance review that is presented to the decision making body or authorized staff person.For this MMRP,the City of Los Angeles is the Lead Agency for the Proposed Project.Unless otherwise noted,the mitigation measures below shall apply to whichever version of the Proposed Project is approved by the decision-makers (e.q.,Option A,Option B,or an Alternative). 2.Purpose It is the intent of this MMRP to: 1.Verify compliance of the required mitigation measures of the E1R; 2.Provide a methodology to document implementation of required mitigation; 3.Provide a record and status of mitigation requirements; 4.Identify monitoring and enforcement agencies; 5.Establish and clarify administrative procedures for the clearance of mitigation measures; City oflos Angeles SCH No.2009061084 Century Plaza Mixed Use Development May 2012 Page IV-1 IV.Mitigation Monitoring and Reporting Program._--- 6.Establish the frequency and duration of monitoring and reporting;and 7.Utilize the existing agency review processes'wherever feasible. 3.Administrative Procedures The Project Applicant shall be obligated to provide documentation concerning implementation of the listed mitigation measures to the appropriate monitoring agency and the appropriate enforcement agency as provided for herein,All departments listed below are within the City of Los Angeles unless otherwise noted.The entity responsible for the implementation of all mitigation measures shall be the Project Applicant unless otherwise noted. As shown on the following pages,each required mitigation measure for the Proposed Project is listed and categorized by impact area,wlth accompanying discussion of: ..Enforcement Agency-the agency with the power to enforce the mitigation measure. ..Monitoring Agency-the agency to which reports involving feasibility, compliance,implementation,and development are made. ..Monitoring Phase-the phase of the Proposed Project during which the mitlqalion measure shall be monitored. '"Monitoring Frequency-the frequency of which the mitigation measure shall be monitored,. Ii!l Action(s)Indicating Compllance-the action{s)of which the Enforcement or Monitoring Agency Indicates that compliance with the required mitlgation measure has been implemented. 4.Enforcement This MMRP shall be in place throughout all phases of the Proposed Project.The entity responsible for implementing each mitigation measure is set forth within the text of the mitigation measure,The entity responsible for implementing the m[tigation shall also be obligated to provide ceitlfication,as ldentified below,to the appropriate monitoring agency and the appropriate enforcement agency that compliance with the required mitigation measure has been implemented. --------.-~-._._----------------------City of L.os Angeles Century Plaza Mixed Use Development SCH No.2009061084 May 2012 lV.Mitigation Monitoring and Reporting Program------------.--~- 5.Program Modification Mitigation Measure A-1:If an archaeological resource is encountered, construction activities shall be diverted and a qualified archaeologist shall be consulted.The archaeologist shall assess the significance of the exposed archaeological discovery in accordance with all relevant California Register of Historical Resources criteria.If the resource is historically significant,and if it is not possible to construct the Proposed Project without disturbance of the archaeological resource,a data recovery plan shall be implemented unless the qualified archaeologist determines that testing or studies already completed have adequately recovered the scientifically consequential information from and about the resource.The data recovery plan,if needed,shall set forth the size of the sample to be acquired,the methods and techniques of excavation,methods and techniques of laboratory studies to be conducted,documentation procedures,and the place where all materials and documentation will be curated,An work required by this Mitigation Measure shall be undertaken in a manner that minimizes disruption and delay to the Proposed Project. &Enforcement Agency;Los Angeles Department of Building and Safety &Monitoring Agency:Los Angeles Department of Building and Safety ~Monitoring Phase:Construction eo Monitoring Frequency:To be determined by consultation with archaeologist if resource(s)are discovered After review and approval of tile final MMRP by the Lead Agency,minor changes and modifications to the MMRP are permitted,but can only be made by the Applicant or its successor subject to the approval by the City of Los Angeles.The Lead Agency,in conjunction with any appropriate agencies or departments,will determine the adequacy of any proposed change or modification.The flexibility is necessary in light of theproto- typical nature of the MMRP,and the need to protect the environment with a workable program.No changes will be permitted unless the MMRP continues to satisfy the requirements of CEQA,as determined by the Lead Agency. 6.Mitigation Monitoring and Reporting Program IV.A.Impacts Found To Be less Than Significant City of Los Angeles SCH No.2009061084 CentUly Plaza Mixed Use Development May 2012 ; !i;.Jj 1IIji,, Page IV-3 IV.Mitigation Monitoring and Reporting Program---- ..Action(s)Indicating Compliance with Mitigation !\IIeasure(s}: If unanticipated discoveries are found,submittal of compliance certification report and mitigation plants)by a qualified archaeologist. Mitigation Measure A~2:If a potential paleontological resource is encountered, construction activities shalt be diverted and a qualified paleontologist shall be consulted.If a potential fossil is found and the paleontologist determines that such fossil could be important,the paleontologist shall be allowed to temporarily divert or redirect grading and excavation activities in the area of the exposed fossil to facilitate evaluation of such fossil and,if necessary and appropriate, salvage of such fossil, ~Enforcement Agency:Los Angeles Department of Building and Safety ..Monitoring Agency:Los Angeles Department of Building and Safety $Monitoring Phase:Construction ~Monitoring Frequency:To be determined by consultation with paleontologist upon discovery of resourcets) ..Action(s)Indicating Compliance with Mitigation Measure{s): If unanticipated discoveries are found,submittal of compliance certification report and mitigation plan(s)by a qualified paleontologist. Mitigation Measure A·3:At the paleontologist's discretion and to reduce any construction delay,the grading and excavation contractor may assist the paleontologist in removing rock samples from excavation and grading locations for initial processing. ~Enforcement Agency:Los Angeles Department of Building and Safety 1!1 Monitoring Agency:Los Angeles Department of Building and Safety It Monitoring Phase:Construction o Monitoring Frequency:To be determined by consultation with paleontologist upon discovery of resource(s) e Action(s)Indicating Compliance with Mitigation Measure(s):If unanticipated discoveries are found,submittal of compliance certification report and mitigation p!an(s)by a qualified paleontologist. Mitigation Measure A~4:All fossils encountered and recovered from the Project Site shall be prepared by the paleontologist to the point of City of Los Angeles SCH No.2009061084 Century Plaza Mixed Use Development May 2012 PagelVA Page IV-5 IV.Mitigation Monitoring and Reporting Program-~~~----_.._-_._-----'---- identification and catalogued before such fossil is donated to a final repository. ;;Enforcement Agency:Los Angeles Department of Building and Safety ~Monitoring Agency:los Angeles Department of 8uilding and Safety to Monitoring Phase:Construction 4'>Monitoring Frequency:To be determined by consultation with paleontologist upon discovery of resource(s) loll Action(s}indicating Compliance with Mitigation Measure(s): If unanticipated discoveries are found,submittal of compliance certification report and mitigation plan(s)by a qualified paleontologist Mitigation Measure A-5:All fossils recovered from the Project Site shall be donated to a public,non-profit institution with a research interest in the materials,such as the Natural History Museum of Los Angeles County.Along with any fossil donated to an institution,the paleontologist shall also prepare (or have prepared)and included with the fossil notes,maps,and (if available)relevant photographs of the fossil and its location prior to removal. 6>Enforcement Agency:Los Angeles Department of Building and Safety (II Monitoring Agency:Los Angeles Department of Building and Safety '"Monitoring Phase:Construction to Monitoring Frequency:To be determined by consultation with paleontologist upon discovery of resource(s) .,Action(s)Indicating Compliance with Mitigation Measure(s): If unanticipated discoveries are found,submittal of compliance certification report and mitigation plan(s)by a qualified paleontologist. Mitigation Measure A~6:If fossils are recovered from the Project Site,following completion of the tasks set forth in Mitigation Measures A-3 through A-6 above,the paleontologist shall prepare a report summarizing the results of the monitoring and salvaging efforts,the methodology used in these efforts,and a description of the fossils collected and their respective significance.The report shall be submitted by the paleontologist to the Lead Agency,to the Natural History Museum of Los Angeles County,and to representatives of other appropriate or concerned agencies.This report shall signify the satisfactory ~---.-------------------------------------------------------------City of Los Angeles Century Plaza Mixed Use Development SCH No,2009061084 May 2012 IV.Mitigation Monitoring and Reporting Program----.-".-.~- completion of the monitoring and review of excavation and grading activities and application of the required mitigation measures. OIl Enforcement Agency:Los Angeles Department of Building and Safety '"Monitoring Agency:Los Angeles Department of Building and Safety iI>Monitoring Phase:Construction '"Monitoring Frequency:To be determined by consultation with paleontologist upon discovery of resource(s) (l>Action(s)Indicating Compliance with Mitigation Measure(s): If unanticipated discoveries are found,submittal of compliance certification report and mitigation plarus)by a qualified paleontologist. Mitigation Measure A-7:In the event human remains are discovered,work in the immediate vicinity of the discovery shalt be suspended and the County Coroner shall be contacted.If the remains are deemed Native American [0 origin,the Native American Heritage Commission ("NAHC")shall be contacted to request consultation with an NAHC- appointed Most Likely Descendant pursuant to Public Resources Code Section 5097.98 and CEQA Guidelines Section 15064.5.Work may be resumed at the landowner's discretion but shall only commence once consultation and treatment have been concluded. Work may continue on other parts of the Project Site while consultation and treatment are conducted. m Enforcement Agency:Los Angeles Department of Building and Safety 6 Monitoring Agency:Los Angeles Department of Building and Safety (l>Monitoring Phase:Construction ~Monitoring Frequency:To be determined by consultation with NAHC upon discovery of resource(s) ..Actionts)Indicating Compliance with Mitigation Measure(s): If unanticipated discoveries are found,written evidence of compliance with Public Resources Code Section 5097.98. IV.B.1 Aesthetics-··Visual Quality/Views Mitigation Measure 13-1:All open areas not used for buildings,driveways, pedestrian amenities or walks shall be attractively landscaped and maintained in accordance with a landscape plan,including an---------------------------------------------------,-----..~-------City of Los Angeles Century Plaza Mixed Use DevelopmentSCHNo.2009061 084 May 2012 Page IV-6 IV.Mitigation Monitoring and Reporting Program~~------~~~. automatic irrigation plan,prepared by a licensed landscape architect to the satisfaction of the Planning Department. ~Enforcement Agency:Los Angeles Department of City Planning;Los Angeles Department of Public Works ..Monitoring Agency:Los Angeles Department of City Planning; Los Angeles Department of Public Works .,Monitoring Phase:Pre-construction;Construction. 9 Monitoring Frequency:Once at plan check;Once at final field inspection ~Action(s}Indicating Compliance with Mitigation Measure(s}: Plan approval and issuance of building permits;Issuance of Certificate of Occupancy Mitigation Measure B~2:A landscape plan shall be prepared by a licensed landscape architect to the satisfaction of the Planning Department. ~Enforcement Agency:Los Angeles Department of City Planning;Los Angeles Department of Public Works ..Monitoring Agency:Los Angeles Department of City Planning; Los Angeles Department of Public Works ..Monitoring Phase:Pre-construction Eo lVionitoring Frequency:Once at plan check ..Adion(s)Indicating Compliance with Mitigation Measure(s): Plan approval and issuance of building permits Mitigation Measure B-3:The Applicant shall ensure through appropriate postings and daily visual inspections that no unauthorized materials are posted on any temporary construction barriers Of temporary pedestrian walkways,and that such temporary barriers and walkways are maintained in a visually attractive manner throughout the construction period. Q Enforcement Agency:Los Angeles Department of Building and Safety III>Monitoring Agency:Los Angeles Department of Building and Safety <I>Monitoring Phase:Construction ...Monitoring Frequency:Periodic Held inspections '»Action(s}Indicating Compliance with Mitigation Measure(s}: Field inspection sign-off City of Los Angeles SCH No.2009061084 Century Plaza Mixed Use Development May 2012 IV.Mltigation Monitoring and Reporting Program~-----~ Mitigation Measure 8-4:The Applicant shall prepare a street tree plan to be reviewed and approved by the City's Department of Public Works, Street Tree Division.All plantings in the public right-of-way shall be installed in accordance with the approved street tree plan. "Enforcement Agency:Los Angeles Department of Public Works e Monitoring Agency:Los Angeles Department of Public Works ~Monitoring Phase:Pre-construction;Construction o Monitoring Frequency:Once at plan check;Once at final field inspection '"Actionts)Indicating Compliance with Mitigation Measure{s): Plan approval and issuance of building permits;Issuance of Certificate of Occupancy Page IV-8 IV.B.2 Aesthetlcs-c-Llqht,Glare,and Shading Mitigation Measure B~5:Outdoor lighting shall be designed and installed with shielding so that the Hght source shall not project directly upon any adjacent residential properties or routinely used outdoor spaces. <i>Enforcement Agency:Los Angeles Department of City Planning;Los Angeles Department of Public Works '"Monitoring Agency:Los Angeles Department of City Planning; Los Angeles Department of Public Works It Monitoring Phase:Pre-construction;Construction e Monitoring Frequency:Once at plan check;Once at field inspection e Action(s)Indicating Compliance with Mitigation Measure(s): Plan approval and issuance of building permits;Issuance of Certificate of Occupancy Mitigation Measure B~6:All exterior glazing used on the building surfaces shall be low-reflective. ..Enforcement Agency:Los Angeles Department of City Planning;Los Angeles Department of Publlc Works e Monitoring Agency:Los Angeles Department of City Planning; Los Angeles Department of Public Works ~Monitoring Phase:Pre-construction;Construction $Monitoring Frequency:Once at plan check;Once at field inspection City of Los Angeles SCH No.2009061084 ._.._._._.------------.--~-Century Plaza Mixed Use Devefopment May 2012 IV.Mitigation Monitoring and Reporting Program_-"~'"'__N"~",,"""_ '"Actlon(s)Indicating Compliance with Mitigation Measure(s}: Plan approval and issuance of building permits;Issuance of Certificate of Occupancy Mitigation Measure B~7:All new street and pedestrian lighting within the public right-offtway shall be approved by the Bureau of Street Lighting and shall be tested in accordance wlth the requirements of the Bureau of Street Lighting. e Enforcement Agency:Los Angeles Department of Public Works $Monitoring Agency:Los Angeles Department of Public Works ~Monitoring Phase:Pre-ccnstruction;Construction Ii>Monitoring Frequency:Once at plan check;Once at field inspection ..Actlon(s)Indicating Compliance with Mitigation Measure(s): Plan approval and issuance of building permits;Issuance of Certificate of Occupancy Mitigation Measure B~8:New lit signage shall be oriented so that the light source does not directly project upon any adjacent R1 property to the west of Century Park West. \)Enforcement Agency:Los Angeles Department of City Planning;Los Angeles Department of Public Works /II Monitoring Agency:Los Angeles Department of City Planning; Los Angeles Department of Public Works /II Monitoring Phase:Pre-construction;Construction Oil Monitoring Frequency:Once at plan check;Once at field inspection ..Action(s)Indicating Compliance with Mitigation Measure(s}: Plan approval and issuance of building permits;Issuance.of Certificate of Occupancy Mitigation Measure B-9:Architectural fighting shall be directed onto the building surfaces and have low reflectivity to minimize glare and limit light onto adjacent properties, ~Enforcement Agency:Los Angeles Department of City Planning;Los Angeles Department of Public Works &Monitoring Agency:Los Angeles Department of City Planning; Los Angeles Department of Public Works "Monitoring Phase;Pre-construction;Construction I\>Monitoring Frequency:Once at plan check;Once at field inspection-------------------------------.--------~----~---City of Los Angeles Century Plaza Mixed Use Development SCH No.2009061084 May 2012 Page tV-9 IV.Mitigation Monitoring and Reporting Program If>Action(s}Indicating Compliance with Mitigation Measure(s): Plan approval and issuance of building permits;Issuance of Certificate of Occupancy Mitigation Measure 8-10:Prior to the issuance of a building permit,architectural plans showing building surface materials shall be submitted to the Planning Department for review to ensure that specific surfacing materials and trim shall not cause roadway glare. f¥Enforcement Agency:Los Angeles Department of Public Works;Los Angeles Department of City Planning ~Monitoring Agency:Los Angeles Department of Public Works; Los Angeles Department of City Planning II Monitoring Phase:Pre-construction <II Monitoring Frequency:Once at plan check ..Action(s)Indicating Compliance with Mitigation Measure(s): Plan approval and issuance of building permits iV.C.1 Air QuaHty and Greenhouse'Gas Emlsalons=-Atr Quality Mitigation Measure C-1:Proposed buildings would be designed to minimize the need for the application of architectural coatings;and where the application of architectural coatings is necessary,shall use low and zero vaG coatings to the extent feasible. •Enforcement Agency:Los Angeles Department of City Planning;Los Angeles Department of Building and Safety; SCAQMD . <I<Monitoring Agency:Los Angeles Department of City Planning; Los Angeles Department of Building and Safety ..Monitoring Phase:Pre-construction;Construction •Monitoring Frequency:Once at plan check;Periodic fieldinspectionsduringconstruction 'I'Action(s)Indicating Compliance with Mitigation Measure(s): Plan approval and issuance of building permits;Field inspection sign·off Mitigation Measure C-2:Water active grading/excavation sites and unpaved surfaces at least three times daily. 0>Enforcement Agency:SCAQMD;Los Angeles Department of Building and Safety ----!~....,~._::1'~,<>;'~"__._,,"'1'"......._ City of Las Ange[es Century Plaza Mixed Use Development SCH No.2009061084 May 2012 Page tV-10 IV.Mitigation Monitoring and Reporting Program ..Monitoring Agency:Los Angeles Department of Buf!ding and Safety ..Monitoring Phase:Construction ..Monitorjng Frequency:Periodic field inspection duringconstruction ..Action(s}Indicating Compliance with Mitigation Measure{s): Quarterly compliance certification report submitted by projectcontractor. Mitigation Measure C-3:The Project Applicant shall require by contract specifications that construction-related eq uipment,including heavy- duty equipment,motor vehicles,and portable equipment,shall be turned off when not ln use for an extended period of time (I.e., 5 minutes or longer). ..Enforcement Agency:Los Angeles Department of Buifding and .Safety ...Monitoring Agency:Los Angeles Department of Building and Safety III Monitoring Phase:Construction ..Monitoring Frequency:Periodic field lnspections during construction e Action(s)Indicating Compliance with Mitigation Measure(s}: Quarterly compliance certification report submitted by project contractor Mitigation Measure C~4:The Project Applicant shall require by contract specifications that construction operations rely on the electricity infrastructure surrounding the construction site and that the use of electrical generators powered by internal combustion engines shall be limited to three generators operating a combined 12 hours per day during building construction.The Project Applicant shall also encourage the use of fuel cells as a power source instead of diesel generators,to the extent feasible. <II Enforcement Agency:Los Ange!es Department of BuHdingand Safety (0 Monitoring Agency:Los Angeles Department of Building and Safety It Monitoring Phase:Construction *Monitoring Frequency:Periodic field inspections during construction City of Los Angeles SCH No.2009061084 Centu!}'Plaza Mixed Use Development May 2012 Page JV-11 lV.Mitigation Monitoring and Reporting Program ..Action(s)Indicating Compliance with Mitigation Measure(s): Quarterly compliance certification report submitted by project contractor Mitigation Measure C-5:The project representative shall make available to the lead agency and SCAQMD a comprehensive inventory of all off-road construction equipment,equal to or greater than 50 horsepower,that will be used an aggregate of 40 or more hours during any portion of the mass grading phase of project construction.The inventory shall include the horsepower rating,engine production year,and certification of the specified Tier standard.A copy of each unit's certified tier speclfication,BACT documentation,and CARB or AQMD operating permit shall be provided onslte at the time of mobilization of each applicable unit of equipment.Off-road diesel- powered construction equipment shan meet the Tier standards based on the following schedule: ,.Prior to December 31,2014:All off-road diesel-powered construction equipment greater than 50 hp used an aggregate of 40 or more hours shall meet Tier 3 off-road emissions standards, where commercially available.In addition,all construction equipment shafl be outfitted with BACT devices certified by CARB.Any emissions control device used by the contractor shall achieve emissions reductions that are no less than what could be achieved by a Level 3 diesel emissions control strategy for a similarly sized engine as defined by CARB regulations,where commercially available. e Post-January 1,2015:All off-road diesel-powered constructionequipmentgreaterthan50hpusedanaggregateof40ormore hours shall meet.the Tier 4 emission standards,where commercially available.In addition,all construction equipment shall be outfitted with BACT devices certified by CARB.Any emissions control device used by the contractor shall achieve emissions reductions that are no less than what could be achieved by a Level 3 diesel emissions control strategy for a similarly sized engine as defined by CARB regulations,where commercially available. $-Enforcement Agency:SCAQMD;Los Angeles Department of Building and Safety ~Monitoring Agency:SCAQMD;Los Angeles Department of Building and Safety I IIIjII o Monitoring Phase: Construction . Pre-Construction (initial submittal): -------~---------------,-----_.".City of Los Angeles century Plaza Mixed Use Development SCH No.2009061084 May 2012 Page IV-12 ____,.IV_,_M_i_ti.9::-a_!i_on_M_on_it_or_in...;.g_a_nd~._R.....:ep_o_rt_i_n_9_P_fo_g_ra_m City of Los Angeles SCH No.2009061084 ~-------Century Plaza Mixed Use Development May 2012 ..Monitoring Frequency:Once (initial submittal);Periodic field inspections during construction '"Action(s)Indicating Compliance with Mitigation Measure(s): Submittal of inventory to SCAQMD;Quarterly compliance certification report submitted by project contractor Mitigation Measure C~6:All vehicles and equipment shall be properly tuned and maintained according to manufacturers'specifications. e Enforcement Agency:Los Angeles Department of Building and Safety I)Monitoring Agency:Los Angeles Department of Building and Safety I)Monitoring Phase:Construction o Monitoring Frequency:Periodic field inspections during construction •Action{s)Indicating Compliance with Mitigation Measure(s): Quarterly compliance certification report submitted by project contractor Mitigation Measure C-7:Haul truck fleets during demolition and shoring/excavation activities shall use newer truck fleets (e.q.,alternative fueled vehicles Of meet 2010 model year Environmental Protection Agency [EPA] NOx standards),where commercially available.At a minimum,truck fleets used for these activities shall be encouraged to apply for funding (e.q,Carl Moyer Grant Program)from the Air Resources Board (ARB)or Air Quality Management District (AQMO)to upgrade their truck fleets,and jf awarded,shall be required to use those funds to upgrade their fleets. e Enforcement Agency:Los Angeles Department of Building and Safety c Monitoring Agency:Los Angeles Department of Bullding and Safety ~Monitoring Phase:Construction •Monitoring Frequency:Periodic field inspections during construction to Action(s)Indicating Compliance with Mitigation Measure(s): Quarterly compliance certification report submitted by project contractor Page lV-13 IV.Mitigation Monitoring and Reporting Program--- IV.C.2 Air Quality and Greenhouse Gas Emissions- Greenhouse Gas Emissions No mitigation measures are identified in the EIR for this environmental issue. IV.D.Historic Resources No mitigation measures are identified in the EIR for this environmental issue. IV.E.1 Energy Conservation-Electricity No mitigation measures are identified in the EIR for this environmental issue. iV.E.2 Energy Conservation-Natural Gas No mitigation measures are identified in the EIR for this environmental issue. IV.F.Geology and Soils Mitigation Measure Fq1:Subsurface water shall be removed by subdrains from behind building basement walls and retaining walls to prevent development of damaging hydrostatic pressures and to avoid detrimental effects on the strength and compressibility of compacted fills in accordance with City of Los Angeles requirements,as applicable.Water shall be conducted to collection drains at the base of the walls and disposed of in accordance with all applicable permit requirements,including all applicable National Pollutant Discharge Elimination System requirements. f)Enforcement Agency:Los Angeles Department of Building and Safety;Los Angeles Department of Public Works ..Monitoring Agency:Los Angeles Department of Building and Safety qj Monitoring Phase:Pre-Construction and Construction '"Monitoring Frequency:Once at plan check;Periodic field inspections during construction "Actlonts]Indicating Compliance with Mitigation Measure{s): Plan approval and issuance of grading permits;Field inspection sign-off Mitigation Measure Fw2:A temporary shoring system shall be implemented during Proposed Project construction to ensure slope stability during City of Los Angeles SCH No.2009061084 Century Plaza Mixed Use Development May 2012 Page !V-14 lV.Mitigation Monitoring and Reporting Program excavation activities.If the necessary space is available,temporary excavations up to 25 feet in depth can be sloped back at a 1:1 (horizontal to vertical),in lieu of shoring.Deeper excavations should be sloped at an inclination of 1X:1.Where there is not sufficient space for sloped embankments,temporary shoring shall be erected, in an acceptable manner.An acceptable manner may include,but is not limited to,installing steel soldier piers in drilled holes that would be backfilled with concrete and restrained with tie-in anchors. I!>Enforcement Agency:Los Angeles Department of Building and Safety ..Monitoring Agency:Los Angeles Department of Building and Safety III Monitoring Phase:Pre-Construction and Construction '"Monitoring Frequency:Once at plan check;Periodic field inspections during construction '"Action(s)Indicating Compliance with Mitigation Measure(s): Plan approval and issuance of grading permits;Field inspection sign-off Mitigation Measure F~3:Subterranean walls shalf be braced internally and be designed to resist at-rest pressures,For preliminary design,it shall be assumed that the at-rest pressures will be equal to that developed by a fluid with a density of 55 pounds per cubic foot,In addition, subterranean walls shan be designed to resist any additional pressure resulting from storage or vehicular traffic and seismic earth pressures. e Enforcement Agency:Los Angeles Department of Building and Safety e Monitoring Agency:Los Angeles Department of Building and Safety ..Monitoring Phase:Pre-Construction and Construction {>Monitoring Frequency:Once at plan check;Periodic field inspections during construction ..Actionts)Indicating Compliance with Mitigation Measure(s): Plan approval and issuance of grading permits;Field inspection sign-off Mitigation Measure F~4:The Applicant shall ensure that all floor slabs,paving and adjacent concrete slabs and walks should be underlain by at least two feet of relatively non-expansive soil.Additionally,wall backfill shall consist of relatively non-expansive soil.The non-expansive soil could be composed of the granular on-site soil. City of Los Angeles SCHNo,2009061084 Centul)'Plaza Mixed Use DevelopmentMay2012 Page lV-iS IV,Mitigation Monitoring and r~eporting Program ..Enforcement Agency:Los Angeles Department of Building and Safety '"Monitoring Agency:Los Angeles Department of Building and Safety ..Monitoring Phase:Pre-Construction and Construction e Monitoring Frequency:Once at plan check;Periodic field inspections during construction $Action(s)Indicating Compliance with Mitigation Measure(s}: Plan approval and issuance of grading permits;Field inspection sign-off Mitigation Measure F-5:Excavation and grading activities shall be scheduled during dry weather periods,as feasible.If qrading occurs during the rainy season (October 15 through April 1).construction Best Management Practices shall be enforced per City regulatory requirements to limit soils leaving the Project Site. to Enforcement Agency:Los Angeles Department of Building and Safety ...Monitoring Agency;Los Angeles Department of Building and Safety $Monitoring Phase:Construction <lo Monitoring Frequency:Periodic field inspections during construction &Action(s)Indicating Compliance with Mttigation Measure(s): Quarterly compliance certification report submitted by project contractor MitigatIon Measure F-G:Appropriate erosion control and drainage devices to the satisfaction of the Los Angeles Department of Building and Safety shall be incorporated,such as sand bags and inlet and outlet structures,as specified by Section 91.7013 of the LABC.This could include planting fast-qrowinq annual and perennial grasses in areas where construction is not immediately planned,which would shield and bind the soil. o Enforcement Agency:Los Angeles Department of Building and Safety e Monitoring Agency:Los Angeles Department of Bulldinq and Safety '"Monitoring Phase:Pre-Construction and Construction .,.Monitoring Frequency:Once prior to Issuance of grading permit;periodic field inspections during construction ....._DIn __City of Los AngelesSCHNo,2009061084 century Plaza Mixed Use Development May 2012 Page IV-16 IV.Mitigation Monitoring .and Reporting Program-----------_.__.- I.>Action(s)Indicating Compliance with Mitigation Measure(s): Plan approval and issuance of grading permits;Quarterly compliance certification report submitted by project contractor Mitigation Measure F~7;Stockpiles and excavated soil shall be covered with secured tarps or plastic sheeting, 9 Enforcement Agency:Los Angeles Department of Building and Safety <i>Monitoring Agency:Los Angeles Department of Building and Safety ..Monitoring Phase:Construction (/I Monitoring Frequency:Periodic field inspections during construction Q Action(s)Indicating Compliance with Mitigation Measure(s): Quarterly compliance certification report submitted by project contractor Mitigation Measure F~8:The Applicant shall comply with Ordinance No,172,176 and Ordinance No.173,494,as applicable,which specify Siormwater and Urban Runoff Pollution Control and req uire the application ofBMPs. (I Enforcement Agency:Los Angeles Department of Building and Safety;Los Angeles Department of Public Works <II Monitoring Agency:Los Angeles Department of Building and Safety <!>Monitoring Phase:Pre-Construction and Construction ..Monitoring Frequency:Once at plan check;Periodic field inspections during construction ...Action(s)Indicating Compliance with Mitigation Measure{s): Field inspection sign-off;Quarterly compliance certification report submitted by project contractor Mitigation Measure F~9:The Applicant shall comply with Chapter IX,Division 70 of the Los Ange!es Municipal Code (LAMC),as applicable,which addresses grading,excavations,and fills. e Enforcement Agency:Los Angeles Department of Bullding and Safety ~Monitoring AgenGY:Los Angeles Department of Building and Safety ~Monitoring Phase:Construction City of Los AngeJes SCH No,2009061084 ---~-~,Century Plaza Mixed Use Development May 2012 Page !V-17 IV.Mitigation Monitoring and Reporting Program "Monitoring Frequency:Once at plan check;Periodic field inspections during construction ..Action(s}Indicating Compliance with Mitigation Measure{s): Field inspection sign-off;Quarterly compliance certification report submitted by project contractor ' Mitigation Measure F-10:The Applicant shall comply with the applicable requirements of the SUSMP approved by the Los Angeles Regional Water Quality Control Board. />Enforcement Agency:Los Angeles Department of Building and Safety;Los Angeles Regional Water Quality Control Board;Los Angeles Department of Public Works '"Monitoring Agency:Los Angeles Department of Building and Safety;Los Angeles Regional Water Quality Control Board ..Monitoring Phase:Construction ,.Monitoring Frequency:Once at plan check;Periodic field inspections durlng construction '"Action(s)Indicating Compliance with Mitigation Measure(s); Field inspection sign-off;Quarterly compliance certification report submitted by project contractor Mitigation Measures F-11,F-12,and F-13 shall only apply if the version of the Proposed Project that is approved by the decision-makers includes retention of the Existing Hotel (e.q.,Option B,Alternative 5). Mitigation Measure Fw11:Durlng construction,underpinning shall be required to maintain the vertical support of the Existing Hotel.The underpinning may serve as pelt of the shoring system to retain the earth beneath the Existing Hotel.The underpinning/shoring system shall be designed to support the lateral surcharge pressures from nearby existinq footings that are not underpinned.The underpinning piles shall consist of steel wide flange sections and shall be utilized to support the gravity loads of the Existing Hotel.The piles shall be deeply embedded into the ground well below the bottom of the excavation.The Existing Hotel shall be surveyed prior to the underpinning/shoring installation and monitored during excavation and construction until construction of the new parking structure is completed to at least the foundation level of the Rehabilitated Structure. <II Enforcement Agency:Los Angeles Department of Bui!ding and Safety City of Los Angeies SGH No.2009061084 Century Plaza Mixed Use DevelopmentMay2012 Page IV-iS IV.Mitigation Monitoring and Reporting Program ..Monitoring Agency:Los Angeles Department of BuHding and Safety <!Monitoring Phase:Pre-Construction and Construction $Monitoring Frequency:Once at plan check;Periodic field inspections during construction $Action(s)Indicating Compliance with Mitigation Measure{s}: Plan approval and issuance of grading permits;Field inspection sign-off Mitigation Measure F·12:The soils underneath the Existing Hotel along the west edge of the Existing Hole].shall also be retained and secured by installing tieback anchors..The tieback anchors shall be deeply embedded underneath the Existing Hotel.Tie-back systems shall be designed such that the tie-backs do not interfere with existing utilities,basements,or foundations.Tie-backs shan each be tested to a specified test load in excess of the design anchor load. ~Enforcement Agency:Los Angeles Department of Building and Safety •Monitoring Agency:Los Angeles Department of Building and Safety ..Monitoring Phase:Pre-Construction and Construction 9 Monitoring Frequency;Once at plan check;Periodic field inspections during construction ..Action{s)Indicating Compliance with Mitigation Measure(s):Plan approval and issuance of grading permits;Field inspectionsign-off Mitigation Measure F~13:Where temporary excavation slopes are planned,the stability of the slope shall be computed considering the location and loading of nearby structures such that there IS a sufficient factor of safety for the sloped excavation.Also,where temporary'shoring is utilized,the stabifity of the shored excavation shall be computed considering nearby structures.During construction of the shoring system,'lagging shall be placed as shoring is placed,and VOids behind lagging boards shall be backfilled with a sand-cement slurry as the excavation progresses. •Enforcement Agency:Los Angeles Department of Building and Safety ~Monitoring Agency:Los Angeles Department of Building and Safety .,.Monitoring Phase:Pre-Construction and Construction '~'~~~4_'~_1~__~_~4~~~~.~"~__,_.__ City of Los Angeles Century Plaza Mixed Use DevelopmentSCHNo.2.009061084 May 2012 Page IV-19 IV.Mitigation Monitoring and Reporting Program.------~::.... e Monitoring Frequency:Once at plan check;Periodic field inspections during construction (0 Actlonts)Indicating Compliance with Mitigation Measure(s): Plan approval and issuance of grading permits;Field inspection sign-off IV.G.Hazards and Hazardous Materials Mitigation Measure G~1:Prior to issuance of permits for any demo!ltionlrenovation activity involving a particular structure,a LBP assessment of each existing structure shall be conducted,LBP to be impacted by the Project shall be removed and disposed of as a hazardous waste in accordance with all applicable regulations.Such regulations that would be followed during demolition under Option A or renovation under Option B include'Construction Safety Orders 1532.1 (pertaining to lead)from Title 8 of the California Code of Regulations, and lead exposure guideHnes provided by the u.s.Department of Housing and Urban Development.The following LBP management practices shall be followed: OJ>Preparation of surveys which include analysis (XRF and butk sample collection and laboratory analysis)of impacted suspect coatings,glazlngs,or finishes prior to or durinq demolition/ renovation. (jI Preparation of plans and specifications detailing the proper engineering controls,personal protective equipment,and waste handling requirements to be utilized. ...Notiffcation to the California Department of Public Health of lead abatement activities. I)Removal of LBPs to be impacted by renovation or demolition work prior to disturbance. Il!Conducting work in accordance with Title 17 CCR Division 1, Chapter 8 and Title 8 Section 1532.1. o Proper waste characterization in accordance with Title 22 ceR. m Disposal of LBPs as required by applicable regulations. II>Third party oversight,air monitoring,and wipe sampling by certified personnel. ..Enforcement Agency:Los Angeles Department of BuHding and Safety;Cal/EPA s Monitoring Agency:Los Angeles Department of Building and Safety City of Los Angeles SCH No.2009061084 Century Plaza Mixed Use Development May 2012 Page IV..20 IV.Mitigation Monitoring and Reporting Program ~Monitoring Phase:Pre-Construction (prior to demolition); Construction,if lBP is found «>Monitoring Frequency:Once,prior to issuance of demolition permits;Ongoing during construction if LBP is found 4!Actlonts]Indicating Compliance with Mitigation Measure(s}: Submittal of LBP survey and issuance of demolition permits;if LBP is found,compliance report signoff by a qualified environmental consultant Mitigation Measure G-2:Prior to demolition/renovation activities involving a particular structure a survey shari be conducted to identify representative ERMs,approximate their quantities,and to determine proper handling and disposal requirements,A technical specification for inclusion into the Project manual shall be prepared detailing the scope of work to be performed,the engineering controls to be utilized,and how waste materials shall be handled,transported,and disposed,Materials shall be diverted from landfills through recycling and incineration means.All work shall be conducted in accordance with applicable federal,State,and local regulations including 40 CFR Part 761 of the Toxic Substances Control Act (TSCA),the Universal Waste Rule found in the California Code of Regulations,Title 22, division 4.5,and the Department of Toxic Substances Control's (DTSC)Electronic Waste Recycting Act. <8 Enforcement Agency;Los Angeles Department of Building and Safety;Cal/EPA 01 Monitoring Agency:Los Angeles Department of Building and Safety '"Monitoring Phase:Pre-Construction (prior to demolition); Construction,if ERMs are found e Monitoring Frequency:Once,prior to issuance of demolition permits;Ongoing-during construction if ERMs are found' &Action(s)Indicating Compliance with Mitigation Measure(s): Submittal of ERM survey and issuance of demolition permits;if ERMs are found,compliance report signoff by a qualified environmental consultant Mitigation Measure G-3:The proposed new USTs shall be designed and sited in accordance with all applicable regulations,The Applicant shall ensure that the new USTs are registered with the LAFD,the State Department of Toxic Substance Control. The proposed on-site USTs shalf be installed and maintained in accordance with all applicable federal,State,and local regulations including,but not limited to,the Resource Conservation and--------------------~-=-=~--~----.------~-------.-------------~---City of LosAngeles CenturyPlazaMixed UseDevelopment SCH No.2009061084 May 2012 Page 1\1-21 IV.Mitigation Monitoring and Reporting Program Recovery Act,the California Hazardous Waste Control Law,Title 23 of the Ca lifornia Code of Regulations,Chapters 16 &18 of the California Health and Safety Code,and the City of Los Angeles Fire Code.Design features included on the tanks to prevent leaks could include,but are not limited to,cathodic protection,leak detection and spilt prevention. "Enforcement Agency:Los Angeles Department of Building and Safety;DTSC;LAFD ..Monitoring Agency:Los Angeles Department of Building and Safety;LAFD .,Monitoring Phase:Construction ~Monitoring Frequency:Once at plan check;periodic field inspections during construction &Action(s)Indicating Compliance with Mitigation Measure(s}: Plan approval and issuance of buHding permits;Field inspection sign-off Mitigation Measure G-4:Prior to issuance of building permits,the Applicant shall comply with applicable requirements for State Division of 011,Gas, and Geothermal Resources (DOGGR)site plan review.If any portions of the former 011wells are encountered during excavation and construction,work shall stop at that location and the DOGGR shall be provided an opportunity to investigate the oil wells.If the DOGGR determines that a re-abandonment is required,this re-abandonment would be completed in accordance with all applicable federal,State,and local regulations,including but not limited to Title 14 of the California Code of Regulations,as well as with appropriate LAFD recommendations. Q>Enforcement Agency:Los Angeles Department of Building and Safety;DOGGR;LAFD '"Monitoring Agency:Los Angeles Department of Building and Safety;LAFD 4 Monitoring Phase:Pre-Construction;Construction (if former wells are encountered) o Monitoring Frequency:Once prior to issuance of grading permits;Once at field inspection during construction oil Action(s)Indicating Compliance with Mitigation Measure(s}: Plan approval and issuance of building permits;LAFD sign-off during field inspection Mitigation Measure G~5:Prior to the Issuance of building permits,a detailed methane investigation shall be conducted and a methane plan shalt~--~----------------------------~-..-----------------------City of Los Angeles Century Plaza lViixedUse Development SCH No.2009061084 May 2012 Page rV-22 IV.Mitigation Monitoring and Reporting Program--------------------------------------~------ be prepared in accordance with Chapter IX,Division 71 of the LAMe (Sections 91.7101 through 91.7104,and 91.7106 through 91.7107, and 91.7109).In accordance with P/se 2002-101,site testing shall be scheduled either before,or 30 days after,any site grading.At least 26 shallow gas probes shall be installed within the footprint of the western portion of the podium structure (i.e.,the podium plaza deck)after demolition of the existing podium structure.Any mitigation measures necessary to reduce potential methane hazards on the Project Site shall be included in this plan.These measures could include,but are not limited to,a building methane ventilation system.The Applicant shan follow the specifications identified in the LADBS'Standard Plan:Methane Hazard Mitigation . .,Enforcement Agency:Los Angeles Department of Building and Safety '"Monitoring Agency:Los Angeles Department of Building and Safety .,Monitoring Phase:Pre-Construction;Construction ~MonItoring Frequency:Once prior to Issuance of grading permits;Periodic field inspections during construction '"Actlonts}Indicating Compliance with Mitigation Measure(s): Plan approval and issuance of building permits;Field inspection sign-off Mitigation Measure G-6:During excavation activities,qualified field technicians shall be on-site to monitor excavated soils for the presence of hydrocarbons.If hydrocarbons are found in excavated soils,these soils shalt be stockpiled separately and properly disposed of in accordance with all applicable federal,State,and local regulations. $Enforcement Agency:Los Angeles Department of Building and Safety II>Monitoring Agency:Los Angeles Department of Building and Safety @ Monitoring Phase:Construction II:Monitoring Frequency:Periodic field inspections during excavation @ Action(s)Indicating Compliance with Mitigation Measlue(s): Quarterly compliance certification report submitted 'by project contractor . Mitigation Measure G-7:During construction and operation,all potentially hazardous materials used on-site shall be contained,stored,and City of Los Angeles SCH No.2009061084 .""""'"'~"'~~_~._.~~~_'_'~P_"iI__""''''~_.._:.~..~._....• Century Plaza Mixed Use Development May2012 Page !V·23 IV.Mitigation Monitoring and Reporting Program used in accordance with manufacturers'instructions and handled in compliance with applicable standards and regulations. iii Enforcement Agency:Los Angeles Department of Building and Safety 01 Monitoring Agency:Los Angeles Department of Building and Safety •Monitoring Phase:Construction and Operation iii Monitoring Frequency:Periodic field inspections during construction $t Action(s)Indicating Compliance with Mitigation Measure(s): Quarterly compliance certification report submitted by project contractor Mitigation Measures G-8 and G-9 shall only apply if the version of the Proposed Project that is approved by the decision-makers includes removal of the Existing Hate! (e.q.,Option A). Mitigation Measure G·8:Prior to the issuance of a demolition permit,the Applicant shall provide a letter to the LADBS from a California Certified Asbestos Consuttant that a comprehensive asbestos survey of all suspect materials that shall be impacted by the Project have been identified.If ACMs are found to be present,they shall be abated in compliance with SCAQMD Rule 1403 and LAFD Rule 68,as well as other State and federal regulations.Specific requirements of Rule 1403 include: "Implementation of a thorough survey of the affected faciHty prior to issuance of permits for any demolition or renovation activity, including inspection,identification,and quantification of all friable and certain non-friable ACMs. ..Surveys which include collection and analyses of representative asbestos building material samples,and quantification of these materials for asbestos abatement purposes prior to or during demolition/renovation. o Preparation of plans and specifications detailing the proper engineering controls,personal protective equipment,and waste handling requirements to be utilized, "Notification of the SCAQMD of the intent to demolish or renovate any facility at least ten days prior to commencing with the activity. City of Los AngelesSCHNo.200906101)4 Century Plaza Mixed Use Development May 2012 Page IV-24 IV.Mitigation Monitoring and Reporting Program Q Removal and encapsulation of all ACMs prior to any demolition or renovation activity that would break up,dislodge,or similarly disturb the material. '"Use of legally required procedures when removing ACMs, '"Placement of all collected ACMs in leak-tight containers or wrapping. 0&Disposal of ACMs as required by applicable regulations. ..Third party oversight and air monitoring by certified personnel, '"Enforcement Agency:Los Angeles Department of Building and .Safety;SCAQMD ;;Monitoring Agency:Los Angeles Department of Building and Safety "Monitoring Phase:Pre-Construction (prior to demolition); Construction,if ACMs are found 'II Monitoring Frequency:Once prior to issuance of demolition permits;Periodic field inspections during construction if ACMs are found o Action(s)Indicating Compliance with Mitigation Measure(s): Plan approval and issuance of demolition permit;Quarterly compliance certification report submitted by project contractor Mitigation Measure G-9:Prior to the issuance of demolition permits,the Applicant shall have the existing 2,000-gallon diesel UST located on the southern portion of the Project Site removed in accordance with applicable federal,State,and local regulations and disposed at an appropriately licensed facility.Soils located beneath the UST shall be assessed to determine whether any soil contamination has occurred.If soil contamination is identified,proper abatement procedures shall be conducted to remove the contaminated soils according to LAFD and applicable federal,State,and other local regulations.The Applicant shall obtain a "No Further Action"letter from the LAFD prior to issuance of a building permit. ~Enforcement Agency:Los Angeles Department of Building and Safety;DTSC;LAFD ..Monitoring Agency:Los Angeles Department of Building and Safety;LAFD ~Monitoring Phase:Pre-Construction;Construction ...Monitoring Frequency:Once period to issuance of demolition permits City of Los Angeles SCH No.2009061084 Century Plaza Mixed Use Development May 2912 Page !V--25 01>Action(s)Indicating Compliance with Mitigation Measure(s): Issuance of No Further Action letter IV.Mitigation Monitoring and Reporting Program~---------------------------~ Mitigation Measures G-10 and G-11 shall only apply if the version of the Proposed Project that is approved by the decision-makers includes retention of the Existing Hotel (e.q.,Option B,Alternative 5). Mitigation Measure G-10:Prior to the issuance of the demolition or bulldfng renovation permits for rehabititation (whichever is required for the Project Option that is approved),the Applicant shall provide a letter to the LADBS from a Califomla Certified Asbestos Consultant that a comprehensive asbestos survey of all suspect materials that shall be .impacted by the Project have been identified.ACMs shall be removed from all areas that are directly disturbed by Project construction as well as adjoining areas when the removal is a logical extension of the construction work being completed.Further,ACM removal in undisturbed areas is not required.AI!ACM removal shall occur in compliance with SCAQMD Rule 1403 and LAFD Rule 68,as well as other State and federal regulations.Specific requirements of Rule 1403 include: ..Implementation of a thorough survey of the affected facility prior to issuance of permits for any demolition or renovation activity, including·inspection,identification,and quantiftcaticn of all friable and certain non-friable ACMs. ..Surveys which include collection and analyses of representative asbestos building material samples,and quantification of these materials for asbestos abatement purposes prior to or during demolitlornre novation. ~Preparation of plans and specifications detailing the proper engineering controls,personal protective equipment,and waste handling requirements to be utilized. ..Notification of the SCAQMD of the intent to demolish or renovate any facility at least ten days prior to commencing with the activity, f1>Removal and encapsulation of all ACMs prior to any demolition or renovation activity that would break up,dislodge,or similarly d!stu rb the material. 49 Use of legally required procedures when removing ACMs. IiiI Placement of all collected ACMs in leak-tiqht containers or wrapping. </>Disposal of ACMs as required by appllcable regulations. City of Los Angeles SCH No.2009061084 Century Plaza Mix.ed Use Development May 2012 Page IV-2.6 --~--""--~--IV.Mitigation Monitoring and Reporting Program ~Third party oversight and air monitoring by certified personnel. ..Enforcement Agency:Los Angeles Department of Building and Safety;SCAQMD o Monitoring Agency:Los Angeles Department of Building and Safety I)Monitoring Phase:Pre-Construction (prior to renovation); Construction if asbestos is found III Monitoring Frequency:Once buildinq renovation permits for rehabilitation;Ongoing during construction if asbestos is found '"Actiorns]Indicating Compliance with Mitigation Measure(s): Submittal of letter to LADBS and issuance of building renovation permits. Mitigation Measure G~11:The existing 2,000"'9allon diesel UST located on the southern portion of the Project Site shall continue to be maintained, relocated and/or upgraded (as required by code)in accordance with aU applicable federal,State,and local regulations including,but not limited to,the Resource Conservation and Recovery Act,the California Hazardous Waste Control Law,Title 23 of the California Code of Regulations,Chapters 16 &18 of the California Health and Safety Code,and the City of Los Angeles Fire Code. "Enforcement Agency:Los Angeles Department of Building and Safety;DTSC;LAFD <:>Monitoring Agency:Los Angeles Department of Building and Safety;LAFD ~Monitoring Phase:Construction and Operation e Monitoring Frequency:Periodic field inspections during construction and operation !lI Action(s)Indicating Compliance with Mitigation Measure{s): LAFD sign-off IV.H.Hydrology and Surface Water Quality Mitigation Measure H~1:The Proposed Project shall comply with the requirements of the applicable NPDES permit for stormwater discharge and with all applicable requirements of the RWQCB,EPA,and local agencies lncllld[og the City of Los Angeles regarding water quality. .,Enforcement Agency:Los Angeles Department of Building and Safety;RWQCB;Los Angeles Department of Public Works Page lV-27 City of Los Angeles SCH No.2009061084 -.~;,..~~.......-..,0} Century Plaza Mixed Use Development May 2012 --"---IV.Mitigation Monitoring and Reporting Program to Monitoring Agency:Los Angeles Department of Buildinq and Safety;RWQCB c Monitoring Phase;Pre-Construction '"Monitoring Frequency:Periodic field inspections during construction (l Actionls}Indicating Compliance with Mitigation Measure(s): Approval of a Stormwater Pollution Prevention Plan;Field inspection sign-off Mitigation Measure H"2:The Proposed Project shall implement stormwater BMPs as required by the City to retain or treat the runoff from a storm event producing 0.75 inch of rainfall in a 24-hour period.The design of· structural BMPs shall be in accordance with the Development Best Management Practices Handbook Part B (Planning Activities).A signed certificate from a licensed civil engineer or licensed architect that the proposed BMPs meet this numerical threshold standard shall be provided. to Enforcement Agency:Los Angeles Department of Public Works ~Monitoring Agency:Los Angeles Department of Public Works e Monitoring Phase:Pre-construction:Construction 6 Monitoring Frequency:Once with approval of plans;Periodic field inspection during construction "Action(s)Indicating Compliance with Mitigation Measure(s): Issuance of building permits;Field inspection sign-off;Submittal of signed certificate from licensed civil engineer or licensed architect Mitigation Measure H-3:All storm drain inlets and catch basins within the Project area shall be stenciled with prohibitive language (such as "NO DUMPING-DRA1NS TO OCEAN")and/or graphical icons to discourage illegal dumping, ~Enforcement Agency:Los Angeles Department of Public Works •Monitoring Agency:Los Angeles Department of Publlc Works ..Monitoring Phase:Pre-construction;construction ,.Monitoring Frequency:Once with approval of plans;Periodic field inspection during construction <;I Actionls)Indicating Compliance with Mitigation Measure(s): Issuance of building permits;Field inspection sign-off City of Los Angeles SCH No.2009061084 Century Plaza Mixed Use Development May2012 Page IV-28 IV.Mitigation Monitoring and Reporting Program Mitigation Measure H-4:The legibltity of signs and stencils discouraging illegal dumping shan be maintained, "Enforcement Agency:Los Angeles Department of Public Works ""Monitoring Agency:Los Angeles Department of Public Works ""Monitoring Phase:Post-Construction ..Monitoring Frequency:Once at final field inspection e Action(s)Indicating Compliance with Mitigation Measure(s): Issuance of Certificate of Occupancy Mitigation Measure H-5:Materials used on-site having the potential to contaminate stonnwater shall be:(1)placed in an enclosure such as, but not limited to,a cabinet,shed,or similar stormwater conveyance system;or (2)protected by secondary containment structures such as berms,dikes,or curbs. e Enforcement Agency:Los Angeles Department of Public Works iI Monitoring Agency:Los Angeles Department of Public Works e Monitoring Phase:Post-Construction "Monitoring Frequency:Once at final field inspection <>Actionts]Indicating Compliance with Mitigation Measure{s): Issuance of Certificate of Occupancy IV.L Land Use Planning No mitigation measures are identified in the ErR for this environmental issue. IV.J.Noise Mitigation Measure J-1:The Proposed Project shall comply with the City of Los .Angeles Noise Ordinance No.144,331 and 161,574,and any subsequent ordinances,which prohibit the emission or creation of noise beyond certain levels at adjacent uses unless technically infeasible. (II Enforcement Agency:Los Angeles Department of Building and Safety >I>Monitoring Agency:Los Ange!es Department of Bullding and Safety III Monitoring Phase:Construction $-Monitoring Frequency:Periodic field inspections ----,---,-,-.-----.-,~-=~----"-------------~~--------------------.------City of Los Angeles Century Plaza Mixed Use Development SCH No.2009061084 May 2012 Page lV-29 ·tv.Mi1igation Monitoring and Reporting Program e Actlonts)Indicating Compliance with Mitigation Measure(s): Field inspection sign-off;Quarterly compliance certification report submitted by project contractor Mitigation Measure J-2:Noise and ground-borne vibration construction activities whose specific location on the Project Site may be flexible (e.g., operation of compressors and generators,cement mlxing,general truck idling)shall be conducted as far as feasibly possible from the nearest noise-and vibration-sensitive land uses. ..Enforcement Agency:Los Angeles Department of Bullding and Safety ..Monitoring Agency:Los Angeles Department of Building and Safety <i>Monitoring Phase:Construction ..MonitorIng Frequency;Periodic field inspections <II Action(s)Indicating Compliance with Mitigation Measure{s): Field inspection sign-off;Quarterly compliance certification report submitted by project contractor Mitigation Measure J-3:Construction activities shall be scheduled,as feasible,so as to avoid operating several pieces of equipment simultaneously, which causes high noise levels. ;0 Enforcement Agency:Los Angeles Department of Building and Safety ~Monitoring Agency:Los Angeles Department of Bullding and Safety ..Monitoring Phase:Construction e Monitoring Frequency:Periodic field inspections ..Action(s)Indicating Compliance with Mitigation Measure(s): Field inspection;Quarterly compliance certification report submitted by project contractor Mitigation Measure J-4:An on-site construction loading and staging areas shall be located as far as feasibly possible from the nearest noise- sensitive land uses located off-site. Eo Enforcement Agency:Los Angeles Department of Building and Safety ~Monitoring Agency:Los Angeles Department of Building and Safety '"Monitoring Phase:Construction 9 Monitoring Frequency:Periodic field inspections City of Los Angeles SCHNo.2009061084 Century Plaza Mixed Use Development May2012 Page lV~30 IV.Millgation Monitoring and Reporting Program ..Action(s)Indicating Compliance with Mitigation Measure(s): Field inspection;Quarterly compliance certification report by the project contractor Mitigation Measure J-5:During the site demolition and site preparation/excavation phases at the Project Site,temporary continuous barriers such as plywood structures or flexible sound control curtains extending eight feet in height shall be erected along the perimeter of the Project Site between the Proposed Project and adjacent noise-sensitive uses, 'Il'Enforcement Agency:Los Angeles Department of Building and Safety ..Monitoring Agency:Los Angeles Department of BuHding and Safety ..Monitoring Phase:Construction ..Monitoring Frequency:Periodic field inspections i<I Actionts]Indicating Compliance with Mitigation Measure(s): Field inspection;QUarterly compliance certification report by the project contractor Mitigation Measure Jw6:All construction truck traffic shall be restricted to truck routes approved by the City of Los Angeles Department of Building and Safety,which shall avoid residential areas and other sensitive receptors to the extent feasible. c>Enforcement Agency:Los Angeles Department of Building and Safety \'$Monitoring Agency:Los Angeles Department of Building and Safety $Monitoring Phase:Pre-construction;Construction $Monitoring Frequency:Once at plan approval;Periodic field inspections ..Action(s}Indicating Compliance with Mitigation Measure{s): Issuance of demolition permits;Field inspection;Quarter!y compliance certification report by the project contractor Mitigation Measure J-7:The Proposed Project shall comply with the City of Los Angeles Building Regulations Ordinance No.178048,which requires a construction site notice to be provided that includes the following information:job site address;permit number;name and phone number of the contractor and owner or owner's agent;hours of construction allowed by code or any discretionary approval for the site;and City telephone numbers where violations can be reported, The notice shall be posted and maintained at the construction site prior to the start of construction and displayed in a location that is City of Los AngelesSCHNo.2009061084 Century Plaza Mixed Use Development May 2012 Page IV-31 IV.Mitigation Monitoring and Reporting Program readily visible to the public and approved by the City's Department of Building and Safety. "Enforcement Agency:Los Angeles Department of Building and Safety (I Monitoring Agency:Los Angeles Department of Building and Safety ..Monitoring Phase:Construction <l>Monitoring Frequency:Quarterly throughout construction; during field inspection ..Action(s)Indicating Compliance with Mitigation Measure(s): Field inspection;Quarierly compliance.certification report by the project contractor Mitigation Measure JM8:The Proposed Project's Construction Staging and Traffic Management Plan (CSTMP)shall include a provision which requires that two weeks prior to the commencement of construction at the Project Site,notification shall be provided to the immediately surrounding off-site residential uses that identifies the construction schedule,including the various types of activities and equipment that would be occurring throughout the duration of the constructionperiod.. <I Enforcement Agency:Los Angeles Department of Building and Safety ..Monitoring Agency:Los Angeles Department of Building and Safety ..Monitoring Phase:Pre-Construction and Construction "Monitoring Frequency:Once at plan check;Periodic field inspections $Actlorus]Indicating Compliance with Mitigation Measure(s): Issuance of demolition permits;Quarterly compliance certification report by the project contractor . Page IV-32 IV.K.Population and Housing No mitigation measures are Identified in the EIR for this environmental issue. IV.l.1 Public Services-Fire Protection Mitigation Measure l~1:ln order to allow for a water flow of 12,000 gpm to the Project Site,a 12-inch line on Constellation Boulevard shall be City of Los Angeles5CHNo.2009061084 ___.._"....._'~__~_"_.""_,_~_=_~~".c _ Century Plaza Mixed Use Development May 2012 ----_..__._-,-,--,'.'-----~-~---~~-------City of Los Angeles Century Plaza Mixed Use Development SCH No.2009061084 May 2012 IV.Mitigation Monitoring and Reporting Program constructed 10 replace a portion of the existing 8-inch Hne between Avenue of the Stars and Solar Way_The upgrade of this waterline on Constellation Boulevard between Avenue of the Stars and Century Park West has already been assigned to the applicant of the adjacent New Century Project as Mitigation Measure 1.1-1 of the New Century Plan EIR (State Clearinghouse No.2006061096).If construction of this improvement has not been completed by Westfield US Holding,LLC ("Westfield")prior to the receipt of a temporary Certificate of Occupancy for the residential component of the Proposed Project,the Project Applicant shall either install its portion of the line or provide payment of fees to the Los Angeles Department of Water and Power for its portion of the construction.If construction of the improvement has been completed by Westfield prior to the receipt of a temporary Certificate of Occupancy for the' residential component of the Proposed Project,the Project Applicant shall have no further mitigation responsibilities with regard to water flow to the Project SHe.If this requirement is satisfied through the payment of fees to the Los Angeles Department of Water and Power, the Project Applicant's fee shall consist of a fair share contribution subject to the approval of the Los Angeles Department of Water and Power.lf this requirement is satisfied through constructlon by the Project Applicant,the design of the water line shall be subject to the approval of the Los Angeles Department of Water and Power and the Los Angeles Fire Department. ~Enforcement Agency:Los Angeles Department of Water and Power;Los Angeles Fire Department o Monitoring Agency:Los Angeles Department of Water and Power e Monitoring Phase:Pre-Construction;Construction &Monitoring Frequency;Once at time of receipt of temporary Certificate of Occupancy for residential component e Actlonts)Indicating Compliance with Mitigation Measure{s):· Receipt of a temporary Certificate of Occupancy for the residential component of the Proposed Project Mitigation Measure LM2:Prior to issuance of a certificate of occupancy,the Applicaht shall develop a Fire Resources Management Plan for the Proposed Project in consultation with the Los Angeles Fire Department In developing this plan the Applicant shall consult with the Los Angeles Fire Department regarding potential staffing and equipment needs associated with the Proposed Project. ..Enforcement Agency;Los Angeles Fire Department;Los Angeles Planning Department Page IV-33 Page IV..34 IV,Mitigation Monitoring and Reporting Program'-------- ..Monitoring Agency:Los Angeles Fire Department ..,Monitoring Phase:Pre-Construction;Construction 011 Monitoring Frequency:Once prior to issuance of a Certificate of Occupancy ..Action(s)Indicating Compliance with Mltigation Measure(s): Receipt of a temporary Certificate of Occupancy for the residential component of the Proposed Project IV.L.2 Public Services-Police Mitigation Measure L-3:Prior to the issuance of building permits,the Project apptlcant shall consult with the Los 'Angeles Police Department Crime Prevention Unit regarding crime prevention features that the Department considers appropriate for the final design of the property. ..Enforcement Agency:Los Angeles Police Department,Los Angeles Planning Department ..Monitoring Agency:Los Angeles Planning Department '"Monitoring Phase:Pre-construction ..Monitoring Frequency:Once '"Action(s)Indicating Compliance with Mitigation Measure(s):Plan approval and issuance of building permit Mitigation Measure L-4:After Project completion,the Applicant shall provide to the West Los Angeles Area Commanding Officer of the Los Angeles Police Department with a diagram of each portion of the Project Site showing access routes and addltlonal information,as requested bytheLAPD,to facilitate police response. o Enforcement Agency:Los Angeles Police Department,Los Angeles Planning Department ..Monitoring Agency;Los Angeles Police Department ' eo Monitoring Phase:'Operation (prior to occupancy) ..Monitoring Frequency:Once prior to issuance of certificate of occupancy ft Action(s)Indicating Compliance with Mitigation Measure{s): Written confirmation of receipt by Los Angeles Police Department prior to issuance of certificate of occupancy ~--~---------------------------------.".City of Los Angeles Century Plaza Mixed Use Development SCH No.2009061084 May 2012 City of Los Angeles SCH No.2009061084 -------------------IV.Mitigation Monitoring and Reporting Program IV.L.3 Public Services-Schools MItigation Measure L-5:The Project Applicant shall pay all applicable school fees mandated by SB 50 to the LAUSD to offset the impact of additional student enrollment at schools serving the Project area. ..Enforcement Agency:Los Angeles Unified School District '"Monitoring Agency:Los Angeles Department of Building and Safety f>Monitoring Phase:Pre-Construction ~Monitoring Frequency:Once prior to issuance of building permit ~Action(s)Indicating Compliance with Mitigation Measure(s}~ Issuance of building permit IV.l.4 Public Services-Recreation and Parks Mitigation lV!easure L-6:For any shortfall in the provision of recreational facilities and parks pursuant to the requirements of LAMe Section 17.12,the Project Applicant shall pay in-lieu fees for the dedication of park landasestablishedbyLAMeSection17.12. <I>Enforcement Agency:Los Angeles Department of Recreation and Parks '"Monitoring Agency:Los Angeles Department of City Planning ..Monitoring Phase:Pre-construction ..Monitoring Frequency:Once prior to certificate of.occupancy dO Action(s)Indicating Compliance with Mitigation Measure(s): Issuance of cerUficate of occupancy IV.L.S Public Services-Libraries Mitigation Measure L-7:The Project Applicant shall pay a mitigation fee of $200 per capita,based on the projected resident population of the proposed development,to the Los Angeles Public Library to offset the Impact of addltional fibrary facility demand in the Project Area. <\>Enforcement Agency:Los Angeles Public Library 0)Monitoring Agency;Los Angeles Department of City Planning OJ Monitoring Phase:Pre-construction ~Monitoring Frequency;Once prior to certificate of occupancy Century Plaza Mixed Use Development May 2012 Page IV-35 IV.Mitigation Monitoring and Reporting Program------------------------~-------= ('>Action(s)Indicating Compliance with Mitigation Measure(s): Issuance of certificate of occupancy IV.M.Transportation/Traffic Mitigation Measure M-1:Prior to the issuance of demolition and construction permits for the Proposed Project,a Construction Staging and Traffic Management Plan (CSTMP)shall be prepared and approved by LADOT and other appropriate agencies,and implemented during Proposed Project construction.The CSTMP shall describe the traffic control measures and devices to be implemented for the various construction phases,along with any sidewalk closures,traffic lane closures,temporary walkway installations,K-rail installations, temporary traffic lane modifications,temporary signal modifications, etc.The CSTMP shall also include the name and phone number of a contact person who can be reached 24 hours a day regarding construction traffic complaints or emergency situations.In addition, the CSTMP shall take into account and be coordinated with other Construction stagIng and Traffic Management Plans that are in effect or have been proposed for other projects in Century Clty. <I>Enforcement Agency:Los Angeles Department of Transportation ..Monitoring Agency:Los Angeles Department of Transportation; Los Angeles Department of Public Works ..Monitoring Phase:Pre-Construction;Construction (i)Monitoring Frequency:Once,prior to issuance of demolition permit;Periodic field inspections during construction ..Action(s}Indicating Compliance with Mitigation Measure(s): Written verification of approval from the Los Angeles Department of Transportation and the Los Angeles Department of Public Works·prior to the issuance of demolition and construction permits;Issuance of demolition permit;Field inspection sign-off; Quarterly compliance certification report submitted by project contractor Mitigation Measure M~2:Pedestrian access shall be maintained on Avenue of the Stars,Solar Way and Century Drive around the Project Site. •Enforcement Agency:Los Angeles Department of Transportation;Los Angeles Department of Building and Safety (II Monitoring Agency:Los Angeles Department of BuHding and Safety ..Monitoring Phase:Construction~--~------~"------"~------~----------------------------~-.----,_.-----City of Los Angeles Century Plaza Mixed Use Development SCH No.2009061084 May 2012 Page lV-36 IV.Mitigaiion Monitoring and Reporting Program---.--"'-------------~--...:::....-:...........-.---:==---.....:.....--=--.......:::- ;)Monitoring Frequency:Periodic field inspection ..Actlonts]Indicating Compliance with Mitigation Measure(s}: Field inspection slgn~off;Quarterly compliance certification report submitted by project contractor Mitigation Measure M-3:Construction vehicles,including construction personnel vehicles,shall not park on public streets,including streets outside Century City. 4>Enforcement Agency;Los Angeles Department of Transportation;Los Angeles Department of Building and Safety ..Monitoring Agency:Los Angeles Department of Buflding and Safety ..MonitOl'ing Phase:Construction e Monitoring Frequency:Periodic field inspection <3 Action(s)Indicating Compliance with Mitigation Measure(s): Field inspection sign-off;Quarterly compliance certification report submitted by project contractor Mitigation Measure M~4:Construction vehicles shall not stage or queue where they interfere with pedestrian and vehicular traffic or block access to nearby businesses. e Enforcement Agency:Los Angeles Department of Transportation;Los Angeles Department of Building and Safety G Monitoring Agency:Los AngeJes Department of Suilding and Safety ~Monitoring Phase:Construction ~Monitoring Frequency:Periodic field inspection ..Action(s)Indicating Compliance with Mitigation Measure(s): Field inspection Sign-off;Quarterly compliance certification report submitted by project contractor Mitigation Measure M-5:Any staging of construction vehicles on public streets, including streets outside Century City,shall be approved by LADOT and,if necessary,other appropriate agencies. ..Enforcement Agency:Los Angeles Department of Transportation <I'Monitoring Agency:Los Angeles Department of Transportation oa>Monitoring:Phase:Construction ..Monitoring Frequency:Once jf staging on public streets is required----------.~---~-------City of Los AngelesSC~INo,2009061084 Century Plaza Mixed Use DevelopmentMay2012 Page rV-37 IV.Mitigation Monitoring and Reporting Program /iJj Actlonts)Indicating Compliance with Mitigation Measure(s}: LADOT approval of staging locations Mitigation Measure M~6:If necessary,any traffic lane closures shall be limited to off-peak traffic periods,as approved by LADOT. $Enforcement Agency:Los Angeles Department of Transportation 01t Monitoring Agency:Los Angeles Department of Transportation ol1 Monitoring Phase:Construction <1>Monitoring Frequency:Periodic field inspection $Actionts)Indicating Compliance with Mitigation Measure(s): LADOT approval of traffic lane closures Mitigation Measure M·7:Flag persons in adequate number shall be provided to minimize impacts to traffic flow,and to ensure the safe access into and out of the Project Site. •Enforcement Agency:Los Angeles Department of Transportation;Los Angeles Department of Building and Safety e Monitoring Agency:Los Angeles Department of Building and Safety •Monitoring Phase:Construction "Monitoring Frequency:Periodic field inspection "Action(s)indicating Compliance with Mitigation Measure{s): Quarterly compliance report submitted by project contractor Mitigation Measure M~8;To the extent feasible,the delivery of construction materials shall be scheduled during off-peak traffic periods . .,Enforcement Agency:Los Angeles Department of Transportation;Los Angeles Department of Building and Safety to Monitoring Agency:Los Angeles Department of Building and Safety II>Monitoring Phase:Construction ~Monitoring Frequency:Periodic field inspection ..Actiorus)Indicating Compliance with Mitigation Measure(s): Quarterly compliance report submitted by project contractor Mitigation Measure M-9:Heavy-duty construction vehicles,except haul trucks, shall arrive at the site no earlier than 7:00 A.M.and depart no later than 6:00 P.M. ________________~_~~_.•__~__~k •~~__··~~ City of Los Angeles SCH No.2009061084 Century Plaza Mhmd Use Development May 2012 Page IV-38 Iv.Mitigation Monitoring and Reporting Program I>Enforcement Agency:Los Angeles Department of Transportation;Los Angeles Department of Building and Safety ..Monitoring Agency:los Angeles Department of Building and Safety s Monitoring Phase:Construction e Monitoring Frequency:Periodic field inspection ..Action(s)Indicating Compliance with Mitigation Measure(s): Quarterly compliancereport submitted by project contractor Mitigation Measure M-10:The hours and operation of haul trucks transporting demolished materials and excavated soil from the site shall be determined and approved by the City's Department of Building and Safety prior to the issuance of demolition and grading permits, "Enforcement Agency:Los Angeles Department of Building and Safety ..Monitoring Agency:Los Angeles Department of Building and Safety ..Monitoring Phase:Pre-Construction <I'Monitoring Frequency:Once,prior to issuance of dernolltionpermit .,Action(s)Indicating Compliance with Mitigation Measure(s)~ Issuance of demolition and grading permits Mitigation Measure M-11:Dedicated turn lanes shall be provided for movement of .construction trucks and equipment,where space is available and would not result in a safety concern for pedestrians and motorists. ..Enforcement Agency:Los Angeles Department of Transportation G Monitoring Agency:Los Angeles Department of Transportation; Los Angeles Department of Building and Safety <li Monitoring Phase:Construction •Monitoring Frequency:Periodic field inspection <IE Action{s)Indicating Compliance with Mitigation Measure(s): Field inspection sign-off;Quarterly compliance report submitted by project contractor City of Los Angeles SCH No ..2009061084 Century Plaza Mixed Use DevelopmentMay2012 Mltfgation Measures M-12 and M-13 shall only apply if the version of the Proposed Project that is approved by the decision-makers is Option A. Page IV-39 IV.Mitigation Monitoring and Reporting Program Mitigation Measure M~12;Intersection 42:Centl!lY.-.l:.ark West/Constellation Boulevard.Prior to issuance of a Certificate of Occupancy,the Project Applicant shall:(a)restrips the north leg of Century Park West to provide two left-turn lanes and two through lanes in the southbound direction,and (b)modify the traffic signal equipment as necessary,as required by LADOT pursuant to Section 4.E.2 of the WLI">,TIMP. to Enforcement Agency:Los Angeles Department of Transportation ..Monitoring Agency:Los Angeles Department of Transportation; Los Angeles Department of Public Works,Bureau of Engineering <lI Monitoring Phase:Pre-construction;Construction •Monitoring Frequency:Once prior to issuance of a Certificate of Occupancy (i Action(s)Indicating Compliance with Mitigation Measure(s}: Issuance of a Certlficale of Occupancy Mitigation Measure M~13~In accordance with the Federal Aviation Administration's maximum height determination for the Project Site,the heights of the north and south buildings under Option A shall be reduced such that the buildings do not exceed a maximum height of 862 feet abovemeansealevel. ..Enforcement Agency:Los Angeles Department of City Planning '"Monitoring Agency:Los Angeles Department of City P1anning (\1 Monitoring Phase:Pre-Construction <II Monitoring Frequency:Once at plan check ..Actfon(s)Indicating Compliance with Mitigation Measure(s):Plan approval and issuance of building permits Mitigation Measure M-14:The Conditions of Approval for the Proposed Project shall require that construction contracts prohibit construction workers from traversing through residential areas and require construction workers to use arterial streets to access the Project Site. ""Enforcement Agency:Los Angeles Department of City Planning ~Monitoring Agency:Los Angeles Department of City Planning '"Monitoring Phase;Pre-Construction ""Monitoring Frequency:Once at plan check (!J Action(s)Indicating Compliance with Mitigation Measure(s}:Plan approval and issuance of building permits City of Los Angeles SCH No,2009061084 Century Plaza Mixed Use Development May 2012 Page IV-40 IV.Mitigation Monitoring and Reporting Program IV,N.1 Utilities and Services-Wastewater No mitigation measures are identified In the E!R for this environmental issue. IV.N.2 Utilities and Services-Water Supply Mitigation Measure Nw1:The landscaped irrigation system shall be designed, installed,and tested to provide uniform irrigation coverage for each zone.Sprinkler head patterns shall be adjusted to minimize over spray onto walkways and streets.Each zone (sprinkler valve)shall water plants haVing similar watering needs (Le.,do not mix shrubs, flowers and turf in the same watering zone). II>Enforcement Agency:Los Angeles Department of City Planning;Los Angeles Department of Water and Power '"Monitoring Agency:Los Angeles Department of City Planning til Monitoring Phase:Pre-Construction €I Monitoring Frequency:Once at plan check ..Action(s)Indicating Compliance with Mitigation Measure(s); Plan approval Mitigation Measure N-2:Automatic irrigation timers shall be set to water landscaping during early morning or late evenIng hours to reduce water losses from evaporation.Irrigation run times for all zones shall be adjusted seasonally,reducing water times and frequency in the cooler months (fall,winter,spring).Sprinkler timer run times shall be adjusted to avoid water runoff,especially when irrigating sloped property. '"Enforcement Agency:Los Angeles Department of City Planning;Los Angeles Department of Water and Power ..Monitoring Agency:Los Angeles Department of City Planning Of Monitoring Phase:Pre-Construction ..Monitoring Frequency:Once at plan check ..Action{s)Indicating Compliance with Mitigation Measure(s): Plan approval Mitigation Measure N~3;Selection of drought-tolerant,low water consuming plant varieties shall be used to reduce irriqation water consumption.For alistoftheseplantvarieties,refer to Sunset Magaz;ne,October 1988, "The Unthirsty 100,"pages 74-83,or consult a landscape architect. ..Enforcement Agency:Los Angeles Department of City Planning;Los Angeles Department of Water and Power--------_._------.----------------------------------------------_.~------City of Los Angeles SCH No.2009061084 Century Plaza Mixed Use Development May 2012 Page !V-41 lV.Mftigafion Monitoring and Reporting Program ..Monitoring Agency:Los Angeles Department of City Planning ~Monitoring Phase:Pre-Construction (>Monitoring Frequency:Once at plan check '"Action(s)Indicating Compliance with Mitigation Measure(s): Plan approval Mitigation Measure N-4:The Project Applicant shall install ultra-low-flush higll- efficiency toilets,ultra-low-flush high-efficiency urinals,and water- saving showerheads must be installed and limited to one showerhead per shower stall.Low flow faucet aerators shalf be installed on all sink faucets. I'Enforcement Agency:.Los Angeles Department of City Planning;Los Angeles Department of Water and Power;Los Angeles Department of Building and Safety $Monitoring Agency:Los Angeles Department of City Planning ~Monitoring Phase:Pre-Construction II>Monitoring Frequency:Once at plan check ..Actlorus)Indicating Compliance with Mitigation Measure(s): Plan approval Mitigation Measure N-5:The Project Applicant shall install domestic water heating systems located in close proximity to point(s)of use,as feasible;use of tank-less and on-demand water heaters as feasible. 4\Enforcement Agency:Los Angeles Department of City Planning;Los Angeles Department of Water and Power <I'Monitoring Agency:Los Angeles Department of City Planning •Monitoring Phase:Pre-Construction '"Monitoring Frequency:Once at plan check It Action(s)Indicating Compliance with Mitigation Measure(s): Plan approval Mitigation Measure N-6:The Project Applicant shall install high-efficiency clothes washers where clothes washers are provided,and high-efficiency dishwashers (Energy Star rated)shall be installed where dishwashers are provided. II>Enforcement Agency:Los Angeles Department of City Planning;Los Angeles Department of Water and Power .,Monitoring Agency:Los Angeles Department of Clty Planning .;I Monitoring Phase;Pre-Construction City of Los Angeles SCt-{No.2009061084 Century Plaza Mixed Use DevelopmentMay2012 Page JV-42 IV.Mitigation Monitoring and Reporting Program '"Monitoring Frequency:Once at plan check a Actlon(s)Indicating Compliance with Mitigation Measure(s):Plan approval IV.N.3 Utilities and Services-Solid Waste Mitigation Measure N-7:In an effort to assist the City of Los Angeles in achieving compliance with AS 939 and to support recycling of operational wastes,the Proposed Project would include a residential recycling program. e Enforcement Agency:Los Angefes Department of City Planning;Los Angeles Department of Public Works Bureau of Sanitation Division ..Monitoring Agency:Los Angeles Department of City Planning o Monitoring Phase:Pre-Construction ..Monitoring Frequency:Once at plan check ~Action(s)Indicating Compliance with Mitigation Measure{s): Plan approval City of Los Angeres SCH No.2009061084 Century Plaza Mixed Usa Development May 2012 Page IV-43