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6.4.A. - Page 1 <br /> RE PO RT <br /> To the Honorable Mayor and City Council <br /> From the Cit Mana er <br /> February 6, 2012 <br /> SUBJECT <br /> Proposed new ordinance requiring developers to indemnify the City in the event of third <br /> party challenge. <br /> RECOMMENDATION <br /> Waive First Reading and Introduce an Ordinance Adding a New Article IV to Chapter 1 <br /> to the Municipal Code Relating to Developer Indemnification. <br /> BACKGROUND <br /> Redwood City requires that developers mitigate the fiscal impact of processing <br /> applications. This policy is embodied in the City Council resolutions requiring <br /> reimbursement of costs associated with development. Another cost is litigation. <br /> ANALYSIS <br /> Typically, the City requires as condition of project approval that a developer will defend <br /> and indemnify the City in the event a third party challenge of the project or the <br /> environmental determination. An indemnification provision has also been recently added <br /> to planning permit application forms. This puts developers on notice early on in the <br /> process. However, this requirement has not been codified. Staff recommends that this <br /> requirement be adopted as an ordinance and included in the City Code to provide <br /> additional notice to developers of the City's requirements. <br /> FISCAL IMPACT <br /> In the event of litigation against the City, the developer would be required to pay the <br /> cost for attorney fees and costs for the City to defend such lawsuits. Without such <br /> indemnification, the City can either not defend its decision or might incur substantial <br /> costs for which the developer should be responsible. <br /> ALTERNATIVES <br /> 1. Make changes to the proposed ordinance. <br /> 2. Do not introduce the proposed ordinance. <br /> ENVIRONMENTAL REVIEW <br /> Not applicable. <br />