City Council Staff Report DATE: January 14, 2021 CONSENT CALENDAR SUBJECT: APPROVAL OF AMENDMENT NO. 1 TO SUPERCHARGER AGREEMENT WITH TESLA, INC., FOR TESLA SUPERCHARGER STATIONS LOCATED WITHIN THE DOWNTOWN PALM SPRINGS PARKING GARAGE FROM: David H. Ready, City Manager BY: Marcus L. Fuller, Assistant City Manager SUMMARY This action will approve Amendment No. 1 to the Supercharger Agreement with Tesla, Inc., for installation, operation and maintenance of a Supercharger Station within the City's Downtown Palm Springs Parking Garage. The Amendment of the Agreement will allow for a minor change to the layout of the supercharger stations with no change to the 24 total spaces provided. RECOMMENDATION: 1. Approve Amendment No. 1 to the Supercharger Agreement (Agreement No. 7213) with Tesla, Inc., a Delaware corporation; and 2. Authorize the City Manager to execute all necessary documents. BUSINESS PRINCIPAL DISCLOSURE: A search of records available through the Secretary of State of California shows that Tesla, Inc., is a Delaware corporation, and its corporate officers are Elon Musk as CEO, Al Prescott as Secretary, and Zachary Kirkhorn as CFO. According to a Corporate Disclosure Statement filed May 29, 2020, disclosed the following as Directors: Elon Musk, Robyn Denholm, Ira Ehrenpreis, Larry Ellison, Antonio Gracias, Steve Jurvetson, Hiromichi Mizono, James Murdoch, Kimbal Musk, and Kathleen Wilson-Thompson. Also listed are the following Executive Officers: Zachary Kirkhorn, Jerome Guillen and Drew Baglino. BACKGROUND: On September 20, 2018, the City Council approved an agreement with Tesla, Inc., to provide for their installation, operation and maintenance of new supercharger stations in the City's Downtown Parking Garage. Specifically, the agreement provides for Tesla to r ···•-"( )i ~Jo -1.. ? arc.,.~,~ •------ City Council Staff Report January 14, 2021 -- Page 2 Tesla Supercharger Agreement install up to 24 spaces in two phases, with the initial phase consisting of 11 spaces and the second phase consisting of 13 spaces located as shown in Figure 1 below. Phase·2· Bxpansion,r FIGURE 1 The agreement provided for an initial term of 5 years, with Tesla's right to extend the term pursuant to two optional 5-yearterms, for a maximum term of 15 years. A copy of the agreement is included as Attachment 1. Tesla completed installation of the 11 original spaces in its first phase and opened them for use in mid-June 2019. STAFF ANALYSIS: The agreement allows for Tesla to exercise its right to expand the number of dedicated charging stations to include the 13 spaces in Phase 2, and Tesla has advised the City of its intention to expand. However, Tesla has requested a slight modification of the layout of the expansion spaces by relocating 1 of the 13 spaces in Phase 2 next to the 11 original spaces in Phase 1, as shown in Figure 2 on the next page. 2 City Council Staff Report January 14, 2021 -- Page 3 Tesla Supercharger Agreement Expansion Option Stalls 0 I I I ' ~ n I II L i! I JI ""Ra\" lDt/C'."l'C..-" ~ I #II: IJl~C#-:J!.l , _ 0 FIGURE 2 One space is being deleted and one space is being added as shown in Figure 2, with the total number of spaces remaining at 24. An amendment to the agreement with Tesla has been prepared to revise the description and layout of the charging stations to accommodate the relocation of 1 of the expansion stalls to be adjacent to the originally enabled stalls. All other terms and conditions of the agreement remain unchanged. A copy of the amendment is included as Attachment 2. ENVIRONMENTAL IMPACT: Section 21084 of the California Public Resources Code requires Guidelines for Implementation of the California Environmental Quality Act ("CEQA"). The Guidelines are required to include a list of classes of projects which have been determined not to have a significant effect on the environment and which are exempt from the provisions of CEQA. In response to that mandate, the Secretary for Resources identified classes of projects that do not have a significant effect on the environment and are declared to be categorically exempt from the requirement for the preparation of environmental documents. In accordance with Section 15301 "Existing Facilities," Class 1 (a) projects consist of "Interior or exterior alterations involving such things as interior partitions, plumbing, and electrical conveyances," and approval of this agreement providing for the installation and operation of a Tesla Supercharger Station is considered categorically exempt from CEQA. 3 City Council Staff Report January 14, 2021 -- Page 4 Tesla Supercharger Agreement FISCAL IMPACT: No impact. SUBMITTED BY: Marcus L. Fuller, MPA, P.E., P.L.S. David H. Ready, Esq .. __....,__._ Assistant City Manager City Manager Attachments: 1. Tesla Supercharger Agreement 2. Amendment No. 1 to Tesla Supercharger Agreement 4 ATTACHMENT 1 5 SUPERCHARGER AGREEMENT (}t,ilJpK '10 This Supercharger Agreement (the "Agreement") is effective as of September 8_, 2018 (the "Effective Date") by and between the City of Palm Springs, a California Charter City ("Counterparty") and Tesla, Inc., a Delaware corporation ("Tesla"). WHEREAS, Tesla, through the provision of Supercharger services at the Property, will provide value to Counterparty by attracting Tesla vehicle owners and the public to, and providing additional visibility of, the Property; WHEREAS, Counterparty acknowledges the value of Tesla's Supercharger at the Property and desires to grant possession and control of the Premises to Tesla pursuant to the terms set forth herein; NOW THEREFORE, in consideration of the above and for other good and valuable consideration, the receipt and legal sufficiency of which is hereby acknowledged, the parties agree as follows: 1. CONTACT INFORMATION; Counterparty's Address for Notices: Tesla's Address for Notices: City of Pa Im Springs Tesla, Inc. 3200 e. Tahquitz Canyon Way- P.O. Box 2743 6800 Dumbarton Circle Palm Springs, CA 92263-2743 Fremont, CA 94555 Attention; Anthony Mejia, City Clerk Attention: Supercharger Team Marcus L. Fuller, Asst. City Manager Phone: (510} 602-3976 Phone: (760) 323-8206 Email: [email protected] With a copy to: Email: [email protected] 24-hour Technical Support & Service: 877-79-TESLA (877-798-3752) 2. PREMISES: Counterparty hereby grants to Tesla possession and control of eleven (11) parking spaces, up to nine (9) feet of additional parking width to comply with the Americans with Disabilities Act of 1990 and approximately 200-400 square feet of landscaped space for equipment (the "Premises") on the property commonly known as the Belardo Parking Garage, located at 101 N Museum Drive, Palm Springs, CA 92262 and as depicted on Exhibit A attached hereto (the "Property") in order to build an electric vehicle supercharging station to charge Tesla vehicles (the "Supercharger Station"). If the Supercharger Station exceeds two thousand (2,000) charge sessions per month in three (3) consecutive months, Tesla shall have the option to submit a request, in accordance with Section 4 below, to Counterparty for Tesla to expand the Premises to include the future expansion area indicated on Exhibit A in order to outfit up to an additional thirteen (13) parking spaces ("Expansion Option Stalls") with charge posts ("Superchargers"}, provided that such expansion shall be subject to Counterparty's prior written approval, which shall not be unreasonably withheld, conditioned or delayed. Page 1 6 3. CONSTRUCTION: Upon delivery of possession of the Premises to Tesla, Tesla shall, at its sole expense, construct improvements as described in and pursuant to the procedures set forth in Exhibit B. attached hereto and made a part hereof, and will install certain trade fixtures indicated in Exhibit B (the "Trade Fixtures" as further described and defined in Exhibit B). 4. INITIAL FOOTPRINT: A total of eleven (11) parking spaces shall be outfitted with Superchargers to charge Tesla vehicles. Initially, six (6) parking spaces shall serve as dedicated charging stalls to be used only by Tesla vehicles (uDedicated Stalls"), and five (5) parking spaces shall serve as charging stalls to be used by Tesla vehicles and will also be available for general parking of non~ Tesla vehicles for a maximum of thirty (30) minutes ("Enabled Stalls"). The Dedicated Stalls and Enabled Stalls and any applicable restrictions shall be identified by signage substantially similar to the signage depicted in Exhibit B. Tesla shall have the option to convert Enabled Stalls into Dedicated Stalls on ten (10) days written notice in order to meet demand for Supercharging services, subject to Counterparty approval, which shall not be unreasonably withheld, conditioned or delayed. In accordance with Section 2 above, Tesla shall have the option to request the outfitting of the Expansion Option Stalls with Superchargers to serve as Enabled Stalls, subject to Counterparty's written approval and by providing written notice to Counterparty of such request at least thirty (30) days prior to commencing such work. Counterparty shall not unreasonably withhold, condition or delay its approval. If approved, the work shall be carried out by Tesla, at its sole cost and expense, in accordance with this Agreement as if such work were the initial construction contemplated above. 5. POSSESSION DATE: The first date where Tesla may enter the Premises and Property to begin its work pursuant to the Agreement is November 1, 2018 (the "Possession Date"). 6. COMMENCEMENT DATE: The date that the Supercharger Station opens to the public (the "Commencement Date") shall be within one hundred and fifty (150) days following the Possession Date, provided that no external permitting, utility or other requirements beyond Tesla's control delay the installation, despite the best efforts of Tesla. Tesla shall deliver written notice to Counterparty promptly following the Commencement Date to confirm such date for recordkeeping purposes. 7. TERM: The initial term of the Agreement shall expire five (5) years from the Commencement Date (the "Initial Term").