HomeMy WebLinkAbout07 APPROVAL OF COST-SHARING AGREEMENT WITH COSTCO FOR EL CAMINO REAL AUTO CTR_DR TRAFFIC SIGNAL PROJDocusign Envelope ID: CBCD726A-4DB1-4938-A388-BCB79412E3BF
MEETING DATE
TO
FROM
Agenda Item 7
Initial
AGENDA REPORT Reviewed: Pfs
City Manager
Finance Director
FEBRUARY 3, 2026
ALDO E. SCHINDLER, CITY MANAGER
MICHAEL GRISSO, DIRECTOR OF PUBLIC WORKS
SUBJECT: APPROVAL OF COST -SHARING AGREEMENT WITH COSTCO
WHOLESALE CORPORATION FOR THE EL CAMINO REAL / AUTO
CENTER DRIVE TRAFFIC SIGNAL IMPROVEMENT PROJECT
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Staff is recommending that the City Council approve a Traffic Signal Cost -Sharing
Agreement with Costco Wholesale Corporation. The agreement establishes
shared financial responsibilities for the Traffic Signal Improvement Project at the
intersection of El Camino Real and Auto Center Drive. This agreement has been
reviewed and approved as to form by Costco and the City Attorney's Office. The
total estimated project cost is $250,000 and per the agreement, Costco would
reimburse the City for 50% of the actual project cost up to $125,000.
RECOMMENDATION:
It is recommended that the City Council:
1. Approve the Traffic Signal Cost -Sharing Agreement between the City and Costco
Wholesale Corporation for the Traffic Signal Improvement Project at El Camino
Real /Auto Center Drive intersection; and
2. Authorize the City Manager or his designee, the Director of Public Works, and the
City Clerk to execute the agreement on behalf of the City.
FISCAL IMPACT:
Sufficient funds in the amount of $100,000 for the project design phase have been
appropriated in the Fiscal Year 2025-26 Capital Improvement Program Budget. Funding for
the construction phase will be requested through a future City Council action as part of the
Fiscal Year 2026-27 budget process.
CORRELATION TO THE STRATEGIC PLAN:
This item contributes to the fulfillment of the City's Strategic Plan Goal B: Public Safety and
Protection of Assets, specifically addressing Strategy 5 which among other items, is to
Docusign Envelope ID: CBCD726A-4DB1-4938-A388-BCB79412E3BF
City Council Agenda Report
Cost -Sharing Agreement with Costco
February 3, 2026
Page 2
ensure continuous maintenance and improvements of public facilities to ensure Tustin is
an attractive, safe, and well -maintained community in which people feel pride.
BACKGROUND AND DISCUSSION:
The intersection of El Camino Real/Auto Center Drive serves as the main access for the
Costco Wholesale store (Market Place Costco) located at 2655 El Camino Real. This
intersection currently operates with permissive -protected left -turn phasing for eastbound and
westbound traffic on El Camino Real. In 2022, the Market Place Costco constructed and
opened a Costco gas station at the north-east corner of the El Camino Real and Auto Center
Drive.
With increased daily vehicle trips to the Market Place Costco, Public Works conducted a
warrant analysis, confirming that a protected -only left turn phasing is beneficial for the
eastbound/westbound travel directions. The addition of a protected left turn can reduce traffic
impacts by alleviating conflicts with oncoming vehicles and pedestrians and improving traffic
safety at this location. Staff shared the findings, and Costco has agreed to partner with the
City to modify the traffic signal, facilitating a protected -only left -turn phasing for the eastbound
and westbound approaches on El Camino Real at Auto Center Drive.
This traffic signal improvement project will require the installation of new protected left -turn
signals, the replacement of the existing traffic signal pole at the north-west corner of the
intersection, and an ADA-compliant curb ramp improvement for the intersection. Per the
cost -sharing agreement, the City will lead this project, including the project engineering
design, construction bids, contract award, and construction.
The cost -sharing agreement has been reviewed and approved as to form by Costco and
the City Attorney's Office. The total estimated cost for this project is $250,000 and, per this
agreement, Costco would reimburse the City for 50% of the actual project cost up to
$125,000, while the City will be responsible for funding the remaining project needs. Staff
recommends that the City Council approve this agreement.
Michael Grisso,
Director of Public Works
Attachment:
1. Traffic Signal Cost -Sharing Agreement
Docusign Envelope ID: CBCD726A-4DB1-4938-A388-BCB79412E3BF
TRAFIC SIGNAL COST -SHARING AGREEMENT
(El Camino Real/Auto Center Drive)
This Traffic Signal Cost -Sharing Agreement ("Agreement") is made and entered into as
of this day of , 2026 ("Effective Date"), by and between the City of
Tustin, a California municipal corporation ("CITY'), and Costco Wholesale Corporation, a
Washington Corporation ("COSTCO"). CITY and COSTCO are sometimes referred to
collectively as "Parties" and individually as "Party" herein.
RECITALS
WHEREAS, COSTCO operates the Costco Wholesale retail store located at 2655 El
Camino Real #122b, Tustin, CA 92782 ("Marketplace Costco"); and
WHEREAS, CITY and COSTCO desire to construct traffic signal improvements in close
proximity to the Marketplace Costco at the intersection of El Camino Real/Auto Center Drive
("Project"); and
WHEREAS, the estimated cost of design and construction of the Project is $250,000.00;
and
WHEREAS, CITY and COSTCO agree that CITY should act as the lead agency for
design, engineering, procurement and construction of the Project; and
WHEREAS, CITY and COSTCO have agreed to share the cost of the Project as specified
in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the preceding recitals and the mutual
covenants and consideration contained herein, the Parties agree as follows:
1. Incorporation of Recitals. The Parties acknowledge that the above recitals are
true and correct, and incorporate those recitals by reference into this Agreement.
2. Obligations of CITY.
a. CITY shall be designated as lead agency for design, engineering,
procurement and construction of the Project.
b. CITY shall design the Project and prepare construction documents,
including, but not limited to, plans, specifications and procurement documents.
C. CITY shall do and perform all things necessary to construct the Project in
accordance with the plans and specifications and to execute and deliver all
documents required in connection with the construction and completion of the
Project, including its Notice of Completion and final accounting report.
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d. CITY shall maintain all books, documents, papers, accounting records and
other evidence pertaining to the costs of the Project and, upon request, provide
copies of such materials to COSTCO.
C. CITY shall, within thirty (30) days after its filing of the Notice of
Completion, prepare a final cost accounting for the Project and transmit the same
to COSTCO.
3. Obligations of COSTO.
a. COSTCO shall, within thirty (30) days after receipt of the final cost
accounting for the Project from the CITY, pay CITY fifty percent (50%) of the
total Project cost, up to $125,000.00.
4. Scope of Agreement. This Agreement is intended to apply only to the funding of
the Project, and not to the funding of future repairs or maintenance of the Project.
5. Assignment. Neither this Agreement, nor any of the Parties' rights, obligations,
duties, or authority hereunder may be assigned in whole or in part by either Party without the
prior written consent of the other Party in its sole and absolute discretion. Any such attempt of
assignment shall be deemed void and of no force and effect. Consent to one assignment shall not
be deemed consent to any subsequent assignment, nor the waiver of any right to consent to such
subsequent assignment.
6. Successors. This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective heirs, executors, successors and assigns.
7. Notice. Any notice, demand, request, consent, approval, or communication either
Party desires or is required to give to any Party or any other person shall be in writing and
delivered either in person or by depositing said notices in the U.S. mail, registered, or certified
mail and addressed as follows:
CITY:
City of Tustin
300 Centennial Way
Tustin CA 92780
Attn: Public Works Director
With a Copy To:
Dave Kendig, Esq.
Woodruff & Smart
555 Anton Blvd., Ste. 1200
Costa Mesa, CA 92606
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CDSTCO:
Costco Wholesale Corporation,
730 Lake Drive
Issaquah, WA 98027
Attn: Legal 1 Real Estate Management
RE: LA1122 Tustin
8. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be invalid under the applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without invalidating the reminder
of that provision, or the remaining provisions of this Agreement.
9. 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. Any waiver by the Parties of any default or breach of any covenant,
condition, or term contained in this Agreement, shall not be construed to be a waiver of any
subsequent or other default or breach, nor shall failure by the Parties to require exact, full, and
complete compliance with any of the covenants, conditions, or terms contained in this
Agreement be construed as changing the terms of this Agreement in any manner or preventing
the Parties from enforcing the full provisions hereof.
10. Attorneys' Fees. In the event any dispute between the Parties with respect to this
Agreement results in litigation or any non judicial proceeding, the prevailing Party shall be
entitled, in addition to such other relief as may be granted, to recover from the non -prevailing
Party all reasonable costs and expenses, including, but not limited to, reasonable attorney fees,
expert consultant fees, court costs and all fees, costs and expenses incurred in any appeal or in
collection of any judgment entered in such proceeding. The amount of such fees, costs and
expenses may be determined in such proceeding or in a separate action brought for that purpose.
To the extent authorized by law, in the event of a dismissal by the plaintiff or petitioner of the
litigation or non judicial proceeding within thirty (30) days of the date set for trial or hearing, the
other Party shall be deemed to be the prevailing Party in such litigation or proceeding.
11. No Principal 1 Agent Relationshil2. Nothing contained in this Agreement shall be
construed as creating the relationship of principal and agent, or of partnership or joint venture
between CITY and COSTCQ.
12. No Third Party Beneficiaries. It is expressly agreed that this Agreement is not for
the benefit of any person or entity not a Party hereto. This Agreement is not intended to
constitute a third -party beneficiary contract.
13. Time of Essence. Time is of the essence in the performance of the provisions of
this Agreement as to which time is an element.
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14. Complete A eement. This Agreement constitutes the entire agreement between
the Parties pertaining to the subject matter of this Agreement and supersedes all prior and
contemporaneous agreements, representations and understandings of CITY and COSTCO, oral
or written.
15. Modification. This Agreement shall not be altered, modified, or amended in
whole or in part, except in a writing executed by the duly authorized representatives of both
Parties.
16. Goveminp, Law and Venue. This Agreement and any dispute arising hereunder
shall be governed and interpreted in accordance with the laws of the State of California. This
Agreement shall be construed as a whole according to its fair language and common meaning to
achieve the objectives and purposes of the Parties hereto. Venue for any litigation concerning
this Agreement shall be in the Superior Court for the County of Orange, California, or, if
jurisdiction is otherwise appropriate, in the Federal District Court for the Central District of
California.
17. Counter arts. This Agreement may be executed in one or more counterparts and
each of such counterparts, for all purposes, shall be deemed to be an original, but all of such
counterparts together shall constitute but one and the same instrument, binding upon the Parties,
notwithstanding that all of the Parties may not have executed the same counterpart.
18. Headings and Formatting. The headings and formatting in this Agreement are
inserted for convenience only. They do not constitute part of this Agreement and shall not be
used in its construction.
19. Authori to Execute. Each of the undersigned represents and warrants that he or
she is duly authorized to execute and deliver this Agreement and that such execution is binding
upon the entity for which he or she is executing this Agreement
TN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.
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"CITY"
CITY OF TUSTIN
ATTEST:
Erica N.Yasuda
City Clerk
APPROVED AS TO FORM
DocuSigned by:
By.
D vitPr3K`�'2lxgi
City Attorney
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Aldo E. Schindler
City Manager
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Docusign Envelope ID: CBCD726A-4DB1-4938-A388-BCB79412E3BF
"COSTCO»
COSTCO WHOLESALE CORPORATION
Dave Messner
Senior Vice President, Real Estate
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