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HomeMy WebLinkAboutMinutes 2016-06-01 @6:30 MINUTES pa so, JOINT SPECIAL MEETING 4-==--- CITY COUNCIL and ALIFOW SUCCESSOR AGENCY OF THE CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 Meeting to be held at: CITY HALL CONFERENCE ROOM 400 GRAND AVENUE SOUTH SAN FRANCISCO, CA WEDNESDAY, JUNE 1, 2016 6:30 p.m. 1. Call to Order. Time: 5:32 p.m. 2. Roll Call. PRESENT: Boardmembers Matsumoto, Garbarino and Normandy, Vice Chair Gupta and Chair Addiego. ABSENT: None. 3. Public Comments—comments are limited to items on the Special Meeting Agenda. None. 4. Agenda Review. No changes. At the request of Boardmember Matsumoto, the following persons identified themselves as present: Russ Cooper, Shorenstein Company Paul Stein, SKS Development Michael Niman, Economic and Planning Systems, Mr. Bill Mitchell, WT Mitchell Group (representing the owners of Centennial Village), Clara Tang from Greenland USA 5. Report regarding the approval of the assignment of rights and obligations under the Development Agreement between the City of South San Francisco and Oyster PointVentures, LLC, and the Disposition and Development Agreement between the Successor Agency to the Redevelopment Agency of the City of South San Francisco and Oyster Point Ventures, LLC, respectively, from Oyster Point Ventures LLC, to Oyster Point Development, LLC. (Alex Greenwood, ECD Director). Director of Economic and Community Development Greenwood presented the staff report recommending that the City Council and Successor Agency respectively approve motions authorizing the assignment of rights and obligations under the Development Agreement between the City of South San Francisco and Oyster Point Ventures, LLC (OPV), and the Disposition and Development Agreement between the Successor Agency to the Redevelopment Agency of the City of South San Francisco and OPV, respectively, from OPV, to Oyster Point Development, LLC (OPD). Director Greenwood advised that approval of these companion documents would authorize the transfer of development rights and obligations for the Oyster Point development from OPV, the existing development team, to OPD composed of a team led by Greenland USA. The City and Successor Agency must both approve the transfer of development rights and obligations as set forth by the Disposition and Development Agreement (DDA) and Development Agreement (DA) respectively. Staff had reviewed the proposed assignment and determined that the threshold financial and development capacity requirements set forth in the original agreements were met. Upon question from the Chair, Director Greenwood advised that Greenland USA is 100%owned by the parent company, Greenland Holdings Corporation Limited (Greenland Holdings). Director Greenwood continued to advise that future phases of the project would have to come back before Council for approval. The present proposed action was solely about the transfer of development rights to the proposed new development team. Boardmember Matsumoto queried the phasing set forth in the staff report. She requested confirmation that the definition of Phase I was the transfer and that Phases II and III involved various aspects of development. She queried whether the development team could fund all three (3) phases. Director Greenwood confirmed phasing and further responded that the team could pay cash to fund the development and even then would be utilizing less than 4% of their existing equity. Boardmember Gupta requested clarification as to whether the transfer would be from OPV to Greenland USA or Greenland Holdings. Director Greenwood advised the transfer would be from OPV to OPD. OPD was headed by Greenland USA and then owned 100%by Greenland Holdings. Boardmember Matsumoto asked several clarifying questions. In response, Director Greenwood advised that under SKS/Shorenstein, the development group was called OPV. Under Greenland USA, the development group is called OPD. He further clarified that two actions were being recommended this evening. The first action would be approval of the assignment of the DA by the City Council. The second was approval of the assignment of the DDA by the Successor Agency. Boardmember Matsumoto continued by noting she was concerned about the transfers and the SPECIAL JOINT CITY COUNCIL AND SUCCESSOR AGENCY MEETING JUNE 1,2016 MINUTES PAGE 2 possibility that new language was included in the DA and DDA. Assistant City Attorney Mattas advised the action of Council and the Successor Agency this evening would be to approve the assignment of the agreements as they presently existed-no new language was authorized. If OPD desired to modify the terms, the entity would have to come back before the appropriate legislative body- Council, the Successor Agency or both. Boardmember Matsumoto expressed that the terms of the original agreement with OPV were extremely important. Pursuant to the approvals, plans and renderings were brought before Council. She noted that the language in the DA referred to research and development (R&D) office buildings and provided the accommodations and improvements necessary to support the R&D Industry. Accompanying small restaurants and coffee shops were anticipated,but retail was not presented beyond that. Assistant City Attorney Mattas stated that the previous authorizations stood, and that if OPD wished for a change in the future, it would have to come back before the Council or the Successor Agency to request the amendment. Boardmember Matsumoto noted that she understood OPD had plans to create something similar to a Santana Row in San Jose. She advised she was not aligned with this type of development for the area, but it didn't mean she couldn't be in the future. However, she would need much more information to approve such a plan. She believed it to be imperative that any changes of this sort would have to come back to Council and/or the Successor Agency for approval. Chair Addiego commented on the significance of Phase I in terms of delivering on commitment to the Oversight Board and taxing entities. Boardmember Matsumoto reiterated the importance of the prevailing wage provisions and her expectation that they be complied with. At the request of Chair Addiego, Assistant City Attorney Mattas confirmed that the language in the DA and DDA remains the same and only the name of the developer changes. In approving the assignments, Council and the Successor Agency were essentially being asked to approve the financial capability and development capability of the developer assignee. Boardmember Matsumoto advised she was not concerned with the financial solvency of OPD. She was bothered that in reading through the staff report materials and attachments under financial considerations and contingencies Greenland Holdings had nine (9) pending lawsuits in various stages before the courts in China, which she believed raised concerns about integrity. Assistant City Attorney Mattas advised that EPS did an analysis of Greenland Holdings' financial holdings. EPS did not have a concern about its exposure to liability in the context of its financial status and available assets. He noted that due diligence on the actual lawsuits was not part of the review, however. Chair Addiego and Boardmember Garbarino expressed the opinion that lawsuits were somewhat routine in the context of development. SPECIAL JOINT CITY COUNCIL AND SUCCESSOR AGENCY MEETING JUNE 1,2016 MINUTES PAGE 3 Motion—Boardmember Garbarino/Second Vice Chair Gupta: to approve the Assignment of Rights and Obligations Agreement, pursuant to Article 11 of the DA by and between the City of South San Francisco and OPV, which effectuates the assignment and assumption of all rights and obligations from OPV, to OPD. Approved by the following roll call vote: AYES: Boardmember Normandy, Boardmember Garbarino, Vice Chair Gupta and Chair Addiego. NOES: Boardmember Matsumoto. ABSTAIN: None. ABSENT: None. Motion—Boardmember Garbarino/Second Vice Chair Gupta: to approve the Consent, Assignment and Assumption Agreement pursuant, to Article 3, Sections 8.4 and 8.5 of the DDA by and between the Successor Agency to the Redevelopment Agency of the City of South San Francisco and OPV pursuant to which the Successor Agency approves the transfer of developers from OPV to OPD. Approved by the following roll call vote: AYES: Boardmember Normandy, Boardmember Garbarino, Vice Chair Gupta and Chair Addiego. NOES: Boardmember Matsumoto. ABSTAIN: None. ABSENT: None. Clara Tang of Greenland USA thanked Council and the Successor Agency and noted the Company looked forward to this project in South San Francisco. Chair Addiego stated that the City was gratified that Greenland would be making this Development investment. City Council Only: 6. Report on Centennial Village Development - Second Administrative Agreement Amendment to the Development Agreement between the City of South San Francisco and El Camino and Spruce, LLC ("First Amendment") for the previously entitled Centennial Village project to allow a five-month extension to the timeframe to commence construction of the project at 180 El Camino Real in the El Camino Real Mixed Use Zoning District in accordance with SSFMC Chapters 19.60 &20.090. (Billy Gross, Senior Planner) 6a. Resolution No. 64-2016 approving a Second Administrative Agreement Amendment to the Development Agreement for the development of a 14.5 acre site for the Centennial Village at 180 El Camino Real Project in the El Camino Real Mixed Use (ECRMX) Zoning District. Planning Manager Mehra presented the staff report recommending that Council approve a Second Administrative Agreement Amendment to the Development Agreement (DA) for the development of a 14.5 acre site for the Centennial Village at 180 El Camino Real Project in the El Camino Real Mixed Use (ECRMX) Zoning District. Manager Mehra advised that the project had been approved and entitled in March of 2014 and entails construction of 20,184 dwelling units and commercial space at the intersection of Spruce Avenue and El Camino Real in the City. The First Administrative Amendment to the Agreement was added in August of 2015. Since then, the applicant had made a good faith effort to move forward. This included demolition and remediation of the Firestone Building on the property. The next phase is for the developer to secure the lending so that the entitlements can be completed. Staff met with the applicant to evaluate the request for extension. SPECIAL JOINT CITY COUNCIL AND SUCCESSOR AGENCY MEETING JUNE 1,2016 MINUTES PAGE 4 Further at the request of Boardmember Matsumoto, staff looked into and discussed with the developer a payment obligation if Phase I (vertical construction) was not commenced by November 26, 2016. Pursuant to this meeting, the developer agreed to a $50,000 payment if Phase I was not begun by this deadline. Manager Mehra closed by advising that Senior Planner Gross and the developer's President, Bill Mitchell were present. Bill Mitchell, President of WT Mitchell Development, Inc. addressed Council. He advised that his company was requesting an extension on the start of Phase I because a major city sewer main currently located on the property must be relocated into Spruce Avenue before any work commenced onsite. Accordingly, the building foundation work would not begin as soon as would usually be the case. Further, the mixed-use nature of the approved development, coupled with its transit-oriented density, had required considerably more design, development coordination and city plan check review time than all parties had originally anticipated. He further stated that the apartment plans submitted in November 2015 were still being checked by the City's outside plan check company, which had forced a delay in construction cost bidding until just recently. Mr. Mitchell expected the bids to be returned within two (2) weeks. It would take another two (2) to three (3) weeks from then to negotiate the construction agreements. He believed the definition of commencement for Phase I -that the footings be started- could be achieved by November 26, 2016. At Chair Addiego's request, Mr. Mitchell confirmed that his Company's investment in the development would equal roughly$224 million. The initial phase would account for roughly$140 million of that total amount. Boardmember Normandy thanked Boardmember Matsumoto for requesting that staff negotiate a developer's payment if the extended deadline is not met. She felt this would assist compliance with the Second Amendment. Boardmember Addiego queried whether the $50,000 amount accomplished much in light of the $140 million commitment against Phase I. Mr. Mitchell advised his company was agreeable to the $50,000 developer payment provision if it provided Council with some comfort against the extension. At Council's request, Assistant City Attorney Mattas advised that"Acts of God", or"Force Majeure" were formally excepted from the developer's payment provision. Boardmember Garbarino queried commitments by tenants. Mr. Mitchell advised that his company had a letter of intent from Safeway, Ross Dress for Less and a National health club chain. On the second floor,he anticipated leases from certain types of companies, including a women's salon and/or coffee providers. Boardmember Matsumoto reminded Mr. Mitchell that the Council seated at the time the project was entitled did not welcome a fitness club due to the parking challenges accompanying such clubs. In response to questions by Council, staff advised of the complicated plan-check process on this project related to the City's adoption of the International Building Code. SPECIAL JOINT CITY COUNCIL AND SUCCESSOR AGENCY MEETING JUNE 1,2016 MINUTES PAGE 5 Director Greenwood agreed with Chair Addiego that the City could review the code and incorporate modifications that cities such as San Francisco have added to ease development timelines in the future. Motion— Boardmember Normandy/Second Vice Chair Gupta: to approve Resolution No. 64-2016. Unanimously approved by roll call vote. 7. Report for resolution authorizing the acceptance of a $5,000 donation from HCP Inc.to provide refreshments at the 2016 BIO International Convention, and amending the Economic and Community Development Department 2015/16 Operating Budget. (Leslie Arroyo, Communications Director). 7a. Resolution No. 65-2016 authorizing the acceptance of a $5,000 donation from HCP, Inc., to provide refreshments at the 2016 Bio International Convention, and amending the 2015/16 Economic and Community Development Department Operating Budget. Motion—Boardmember Garbarino/Second—Boardmember Normandy to approve Resolution No. 65- 2016. On the question, Boardmember Normandy queried the budget year for the acceptance of the donation. Staff advised that the transaction was appropriately characterized as revenue in the 2015/2016 Fiscal Year Budget. The Motion was unanimously approved by roll call vote. ADJOURNMENT Being no further business, Chair Addiego adjourned the meeting at 7:29 p.m. Submitted by:, Approved by: i I £ /� i i& . 1 ,Krista Ma r, , Clerk Mark ddiego, Chair City of So .n Francisco City of South San Francisco • SPECIAL JOINT CITY COUNCIL AND SUCCESSOR AGENCY MEETING JUNE 1,2016 MINUTES PAGE 6