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HomeMy WebLinkAboutOB Minutes 09.19.17MINUTES REGULAR MEETING o s n OVERSIGHT BOARD FOR THE J - O LIFO SUCCESSOR AGENCY TO THE CITY OF SOUTH SAN FRANCISCO REDEVELOPMENT AGENCY P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 CITY HALL LARGE CONFERENCE ROOM, TOP FLOOR 400 GRAND AVENUE TUESDAY, SEPTEMBER 19, 2017 2:00 p.m. CALL TO ORDER TIME: 2:07 p.m. ROLL CALL PRESENT: Chairperson Cullen, Boardmembers Farrales Addiego, Friedman and Scannell and Alternate Boardmember Bailey. ABSENT: Vice Chair Krause. PLEDGE OF ALLEGIANCE The Board and members of the public in attendance recited the Pledge of Allegiance. AGENDA REVIEW None. MATTERS FOR CONSIDERATION 1. Motion to approve the Minutes from the meetings of January 31, 2017 and July 18, 2017. Motion— Boardmember Scannell /Second— Boardmember Addiego: to approve the Minutes from the meetings of January 31, 2017 and July 18, 2017. Approved by the following roll call vote: AYES: Boardmembers Addiego, Friedman, Farrales and Scannell, Alternate Boardmember Bailey and Chair Cullen. NAYS: None. ABSTAIN: None. ABSENT: Vice Chair Krause. 2. Report regarding a resolution approving the final sale price of $3,500,000 for the disposition of the properties located at 200 Linden Avenue, 212 Baden Avenue, and 216 Baden Avenue (APNs 012334130, 012334160, 012334030 and 012334040). (Julie Barnard, Economic Development Coordinator) 2a. Resolution No. 4 -2017 approving the final sale price of $3,500,000 for the disposition of the properties located at 200 Linden, 212 Baden, and 216 Baden Avenue (APNs 012334130, 012334160, 012334030 and 012334040), pursuant to the approved Long Range Property Management Plan and Health and Safety Code Section 34191.5, with the proceeds to be distributed to the local taxing entities. Economic and Community Development Director Greenwood introduced the staff report recommending that the Board adopt a resolution approving the final sale price of $3,500,000 for the disposition of the properties located at 200 Linden Avenue, 212 Baden Avenue, and 216 Baden Avenue. Director Greenwood advised the properties figure prominently in the Long Range Property Management Plan ( LRPMP). He noted that matters related to these properties had been before the board six (6) times, and he thanked the Board for its partnership in this regard. While the road had been complex, ratification of this agreement would be critical to the revitalization of the Downtown in South San Francisco. He advised the project had been the work of several current and former staff members. Armando Sanchez had handled the project before leaving to become the Director of HEART. At that time, Economic Development Coordinator Barnard became the lead on the project. He then introduced Coordinator Barnard to provide details of the sale. Coordinator Barnard advised that the properties proposed for sale were originally acquired by the Redevelopment Agency, and included 200 Linden Avenue, 212 Baden Avenue, and 216 Baden Avenue (collectively 200 Linden). When the State dissolved redevelopment agencies, the properties were transferred to the City's Successor Agency. The Successor Agency was then required to develop a LRPMP governing the disposition and use of all former Redevelopment Agency properties. Following approval of the LRPMP by both the Oversight Board and the State Department of Finance, the properties have been transferred to the City for disposition consistent with the LRPMP. Last November, the Board approved sale of the 200 Linden Properties to Hisense Real Estate (USA), LLC for $3,500,000. Hisense was selected because it offered the highest price of $3,500,000, for - sale housing, and a proposal to provide ground floor retail of either a drug store or a grocery store. The sale price was approved as part of an Exclusive Negotiating Rights Agreement (ENRA) between the Successor Agency, the City of South San Francisco and Hisense for the sale and development of the properties. The ENRA's initial term was seven (7) months with an option to extend by an additional 60 days upon the payment of $25,000. On June 5, 2017, Hisense opted to extend the ENRA term and paid the non - refundable $25,000 fee. The new ENRA expiration date was August 29, 2017. The City and Hisense are currently working in good faith until the DDA is executed. The purchase price of the property has not changed. Escrow will open when Hisense submits a financing plan. Escrow is expected to close in April or May of 2018. Upon close of escrow, funding would be released to the taxing entities. Accordingly, staff recommended that the Oversight Board adopt a resolution approving the final sale price of $3,500,000 for the disposition of the properties located at 200 Linden Avenue, 212 Baden Avenue, and 216 Baden Avenue, pursuant to the LRPMP, with the proceeds to be distributed to the local taxing entities. OVERSIGHT BOARD REGULAR MEETING SEPTEMBER 19, 2017 MINUTES PAGE 2 In response to a question from Chair Cullen, staff explained that if the total additional staff cost is less than the $25,000 extension fee, then the difference would be deducted from the purchase price. Boardmember Addiego commented that the spectacular project was the first foray into for -sale residential development in the Downtown. Motion— Boardmember Addiego /Second— Boardmember Scannell: to approve Resolution No. 4- 2017. Approved by the following roll call vote: AYES: Boardmembers Addiego, Friedman, Farrales and Scannell and Alternate Boardmember Bailey and Chair Cullen. NAYS: None. ABSTAIN: None. ABSENT: Vice Chair Krause. 3. Report regarding a resolution approving the final sale price of $1,200,000 for the disposition of 201 -219 Grand Avenue (APNs 012 - 316 -110, 012 - 316 -100, 012 - 316 -090 and 012 -316- 080). (Julie Barnard, Economic Development Coordinator) 3a. Resolution No. 5 -2017 approving the final sale price of $1,200,000 for the disposition of 201 -219 Grand Avenue (APNs 012- 316 -110, 012 - 316 -100, 012 - 316 -090 and 012 - 316 -080), pursuant to the approved Long Range Property Management Plan and Health and Safety Code Section 34191.5, with the proceeds to be distributed to the local taxing entities. Coordinator Barnard presented the staff report recommending that the Board approve the final sale price of $1,200,000 for the disposition of 201 -219 Grand Avenue pursuant to the LRPMP, with the proceeds to be distributed to the local taxing entities. In December 2015, the City approved the entitlements for the Grand and Linden Projects, which include 201 -219 Grand Avenue (Successor Agency- owned site) and 418 Linden (City -owned site). At the time of approval, the City Council and Successor Agency approved a Disposition and Development Agreement (DDA) with Brookwood Equities, LLC. However, Brookwood was unable to move the project. Accordingly, the City Council and Successor Agency terminated the DDA. After termination, the City retained the project entitlements, which allowed the City to solicit a new developer. Staff conducted an extensive Request for Proposals (RFP) process, and selected a developer, ROEM Development Corporation (ROEM). On January 23, 2017, the Oversight Board approved the Successor Agency's recommendation of ROEM as the developer for the 201 Grand site. An ENRA was subsequently finalized to establish procedures and standards for the negotiation between the City and ROEM in order to reach a Purchase and Sale Agreement. In August, ROEM exercised its option to extend the ENRA through October 31, 2017 and submitted a $25,000 fee. ROEM informed staff that it had received new construction bids that showed that the Project was facing a $5,800,000 shortfall. Staff worked with ROEM to identify possible solutions, which resulted in the following revisions: 1) The Linden Purchase price was reduced by $500,000; 2) The City agreed to inject $3,500,000 in City Affordable Housing Funds; 3) ROEM agreed to reduce its return on project cost (ROC) from 6.0 percent to 5.75 percent; 4) ROEM identified cost reductions of approximately $1 million to soft costs including, using standard doors to avoid the need to pay for custom doors, etc. In the meantime, the $1,200,000 purchase price of the 201 Grand portion of the project was not changed. It is anticipated that escrow will close in April or May of 2018. OVERSIGHT BOARD REGULAR MEETING SEPTEMBER 19, 2017 MINUTES PAGE 3 In response to a question from Boardmember Scannell, Coordinator Barnard advised the affordable housing funds would be drawn from the City's housing trust fund and other developer in lieu fees. In response to a question from Chair Cullen, Director Greenwood advised the projects had a 19 month construction schedule with grading permits for both projects being pulled simultaneously. Boardmember Scannell commented that it would be helpful if the staff report included the estimated building permit and other fees the City would collect on the project, which information had been included in the staff report on Item No. 2. Motion- Boardmember Farrales /Second- Boardmember Addiego: to approve Resolution No. 5- 2017. Approved by the following voice vote: AYES: Boardmembers Addiego, Friedman, Farrales and Scannell and Alternate Boardmember Bailey and Chair Cullen. NAYS: None. ABSTAIN: None. ABSENT: Vice Chair Krause. FUTURE AGENDA ITEMS 4. 636 El Camino Real Commercial Space. Chair Cullen requested an update on the implementation of the LRPMP. Staff agreed to provide an update at an upcoming meeting. ADJOURNMENT Being no further business, Oversight Board for thy- Successor Agency to the South San Francisco Redevelopment Agency OVERSIGHT BOARD REGULAR MEETING MINUTES adjourned the meeting at 2:30 p.m. Approved: Neil Cullen, Chairpersdrr" Oversight Board for the Successor Agency to the South San Francisco Redevelopment Agency SEPTEMBER 19, 2017 PAGE 4