Several members of City Council expressed concern that a large development has failed to hold up its end of the bargain for two years in a row.

Agensys, which works to develop new cancer therapies, is allowing more employees to drive to and from work than it is permitted under the development agreement (DA) it signed with City Hall in 2010.

Its campus is located at 1800 Stewart St.

City officials say they are working with Agensys to achieve compliance, but Councilmember Ted Winterer wondered if more could be done.

“I basically philosophically am concerned that we have rolled into this DA and requirement that’s not being met,” he said, “and I realize the response from staff was to go back and try harder on their (traffic demand management) measures, but what other recourse do we have since they are failing to meet an actual requirement under the development agreement as opposed to a goal? There must be a stick that goes along with the carrot.”

“Staff was clear in working with the applicant that compliance was what we desire out of these discussions annually and this work is important,” city planner Roxanne Tanemori responded. “We understand this is an important issue. And sometimes that compliance is going to happen incrementally, over time, and while that wasn’t initially how the development agreement was structured, we’re going to continue to do that work. And while default and procedures for that are embedded in the agreement, we’re really looking for compliance.”

City Attorney Marsha Moutrie went into greater detail on this point, explaining that, while she wouldn’t recommend it, council could try to sue Agensys for noncompliance.

“Well I suppose if you want to cut to the chase, at the end of the day, if they were in default, and my recommendation would be, particularly if it didn’t appear they were making any progress towards getting themselves out of default, I suppose that the city could sue them, probably for a specific performance,” she said.

“It sounds like something we need to consider,” Mayor Pro Tempore Tony Vazquez said, after Moutrie’s explanation.

Mayor Kevin McKeown was intrigued by the notion that City Hall might be able to sue the company for breaking contract without forcing them to vacate the building.

“I’m not prepared to assume that we could get a court to order the building vacated but I thought I was being asked what the remedy for default was, and it is possible to institute litigation,” Moutrie responded. “I was clear in saying I don’t recommend that. You wouldn’t be well-situated in court unless you could clearly establish the default.”

McKeown asked that city officials consider greater action.

“I would hope staff would think more about that because if we’re going to deliver on the promise of no net new trips then the obligations that people make under DAs have to be taken seriously,” he said, “and to hear for the second consecutive year that, well, discussions are ongoing: That doesn’t solve the problem. And I think we need to treat this as a problem worthy of solution and I would hope that staff can come back to us with something that’ll help in that.”

At the end of the discussion, Winterer made a motion, stating that he believes that all of the city’s development agreements are “in good faith compliance with the exception of the main issue of Agensys'” average vehicle ridership.

The motion was in line with recommendation from city planners.

“Based on staff’s review of each of the 16 projects already built and the annual reports submitted by the developers or successors-in-interest to demonstrate good-faith compliance, staff recommends council determine that 15 of these agreements are in good faith compliance with requirements specified for each property,” they said in their report to council.

But Councilmember Pam O’Connor took issue with the phrasing.

“They’re not operating in good faith?” she asked of Winterer.

“They have not made a significant improvement in their (average vehicle ridership) within the last year,” he responded.

“I guess I wouldn’t label them as not operating in good faith yet,” O’Connor said. “I mean, we’re trying to work with them.”

Winterer suggested that council accept staff’s recommendation, to which all present members agreed.

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