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Home My WebLink AboutMinutes 2016-11-07 @7:30 MINUTES �zK SAN SPECIAL MEETING 6::?``� - � CITY COUNCIL AND n- 0 SUCCESSOR AGENCY OF THE °`lL/FOacO, CITY OF SOUTH SAN FRANCISCO P.O. BOX 711 (City Hall, 400 Grand Avenue South San Francisco, California 94083 Meeting to be held at MUNICIPAL SERVICES BUILDING COUNCIL CHAMBERS 33 ARROYO DRIVE SOUTH SAN FRANCISCO, CA MONDAY, NOVEMBER 7, 2016 7:30 p.m. Call to Order TIME: 7:40 p.m. Roll Call PRESENT: Boardmembers Addiego, Garbarino and Matsumoto, Vice Chair Normandy and Chair Gupta.* *For purposes of these minutes, members of the Successor Agency are referred to in their Council capacity. It is noted that both legislative bodies convened and members acted pursuant to their roles as Councilmembers and Successor Agency Members as indicated. ABSENT: None. Agenda Review None. Public Comments—comments are limited to items on the Special Meeting Agenda. None. ADMINISTRATIVE BUSINESS 1. Report regarding Resolution Approving an Exclusive Negotiating Rights Agreement (ENRA)between the South San Francisco Successor Agency, the City of South San Francisco and Hisense Real Estate (USA), LLC for the properties located at 200 Linden, 212 Baden, and 216 Baden Avenue (APNs 012334130, 012334160, 012334030 and 012334040). (Ron Gerber, Economic Development and Housing Manager) la.Resolution No. 05-2016 Approving a Exclusive Negotiating Rights Agreement (ENRA)between the South San Francisco Successor Agency, the City of South San Francisco and Hisense Real Estate (USA), LLC for the properties located at 200 Linden, 212 Baden, and 216 Baden Avenue (APNs 012334130, 012334160, 012334030 and 012334040). Economic and Development Coordinator Julie Bernard presented the item to the Council/Board Members. Following the approval of the City of South San Francisco's Long Range Property Management Plan by the California Department of Finance last year, Staff had moved forward with a request for qualifications for the acquisition and the development of 200 Linden Avenue, and 212 and 216 Baden Avenue (collectively referred to as 200 Linden). The site would be located in the heart of the Downtown, with convenient access to the 101 highway,bus routes, the Caltrain station, and has significant development potential. Ms. Bernard stated during the RFQ process, the City held a pre-submittal meeting and site visit in January 22, 2016, and submittals were due February 3, 2016. The City received responses from seven developers which included land uses such as mixed use condominiums,market rental housing, affordable housing, a hotel and a boutique hotel. Ms. Bernard continued that on April 11, 2016, the Joint Housing Standing Committee met to review the seven developer RFQ submittals. Upon reviewing the Price and Terms, the Standing Committee recommended to the Successor Agency that four of the seven developers (BayRock, Proferian, RAHM, and OMNI Investments)be shortlisted for further consideration. On May 11, 2016, the Successor Agency approved this shortlist for the Oversight Board's consideration at the May 17, 2016 meeting. The Oversight Board concurred with the Standing Committee and Successor Agency's shortlist recommendation. Ms. Bernard stated that during this time the four shortlisted developers were asked to provide a "Best and Final"price offer as well as their total development costs for consideration. The shortlisted developers were then interviewed to further understand their experience and development concept. Prior to the scheduled interviews, one of the shortlisted developers, Proferian, withdrew their application due to concerns about construction costs. On June 23, 2016, the Standing Committee interviewed the three remaining developers, and then met in closed session to review Price and Terms as well as the total development costs. The Standing Committee requested additional confidential information from two of the three developers. On August 10, 2016, the Successor Agency and Standing Committee interviewed the two developers. RAHM Investments and Omni Investments gave short presentations and were asked follow-up questions. The Successor Agency and Standing Committee then met in closed session to discuss and consider the price and terms of the two offers. Omni Investments was recommended as the preferred developer. The preference for this developer was based on the fact that Omni Investments presented the Successor Agency with the highest price and a condo development versus rental. SPECIAL CITY COUNCIL AND SUCCESSOR AGENCY MEETING NOVEMBER 7,2016 MINUTES PAGE 2 Finally,the Oversight Board convened on September 20, 2016, to review the Successor Agency's recommendation and confirmed their selection with Omni's concept being the highest and best proposal. It should be noted that following the selection of Omni Investments, the developer has been renamed and is now known as Hisense Real Estate (USA), LLC Since the selection of Hisense, Staff has been working closely with the developer on negotiating an ENRA. The purpose of the ENRA is to establish procedures and standards for the negotiation between the Agency/City and Hisense in order to reach a Purchase and Sale Agreement. Key business points that are contained in the ENRA include the following. • Deposit: A $300,000 deposit will be required upon execution of the ENRA. If the City chooses to terminate the ENRA or PSA agreement with Hisense due to non-performance, $250,000 of the deposit will be refunded. Should Hisense choose to terminate the ENRA due to Agency/City non-performance, 100% of the deposit will be refunded. The deposit will become applicable to the purchase price. • Term: The ENRA is set initially at seven months with the ability to extend by up to 60 days for a payment of$25,000. • Hisense to finalize and provide the City with a statement of their corporate structure ahead of the ENRA expiration. • The developer will be required to submit a pro-forma as well as proof of financing and equity, ahead of the ENRA expiration. • Good faith efforts to secure Letters of Interest from desired tenants. In their interviews on August 10, 2016, Hisense noted that a drug store or a grocery store would likely be secured as a tenant for the ground floor retail. During the ENRA period, the City requests that the developer work in good faith to secure interest from potential new tenants. If the Successor Agency approves the ENRA, staff and the developer will present the ENRA to the Oversight Board on November 22, 2016, for their approval of the sale price. If approved, the ENRA will be executed and the developer will have the ability to move forward with the negotiation of a Purchase and Sale Agreement and securing entitlements. It is recommended that the Successor Agency and City Resolution Approving an Exclusive Negotiating Rights Agreement (ENRA)between the South San Francisco Successor Agency, the City of South San Francisco and Hisense Real Estate (USA), LLC for the properties located at 200 Linden, 212 Baden, and 216 Baden Avenue. Motion—Councilman Garbarino/Second—Councilwoman Matsumoto: to approve Resolution No. 05-2016. Unanimously approved by roll call vote. Adjournment Being no further business, Mayor Addiego adjourned the meeting at 7:48 p.m. SPECIAL CITY COUNCIL AND SUCCESSOR AGENCY MEETING NOVEMBER 7,2016 MINUTES PAGE 3 Submitted by: Approved by: Gabrie rod i : -z, Deputy Clerk Pradeep Gupta, Chair Successor Agency City of South San Francisco Successor Agency City of South San Francisco Submitted by: Approved by: .1111\ at r Amu Gabriel Rodri_1, Deputy City Clerk Pradeep upta, Mayor City of South San Francisco City of South San Francisco SPECIAL CITY COUNCIL AND SUCCESSOR AGENCY MEETING NOVEMBER 7,2016 MINUTES PAGE 4