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HomeMy WebLinkAboutMinutes 2017-12-04 @7:0000�x S� rL+ y J 'O r"Q�IFOR�1� CALL TO ORDER ROLL CALL AGENDA REVIEW None. PUBLIC COMMENTS None. CLOSED SESSION MINUTES SPECIAL MEETING CITY COUNCIL 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: MUNICIPAL SERVICES BUILDING COUNCIL CHAMBERS 33 ARROYO DRIVE SOUTH SAN FRANCISCO, CA WEDNESDAY, DECEMBER 4, 2017 7:00 p.m. TIME: 7:00 p.m. PRESENT: Councilmembers Addiego, Garbarino, Matsumoto, Vice Mayor Normandy and Mayor Gupta. ABSENT: None. 1. Closed Session: Conference with Legal Counsel - Anticipated Litigation Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Government Code Section 54956.9: one case Time entered Closed Session: 7:01 p.m. Open Session resumed: 7:47 p.m. Report out of closed Session by Mayor Gupta: no reportable action. PUBLIC HEARING 2. Report regarding a Community Facilities District Public Hearing, Resolution of Formation of Community Facilities District and Resolution Calling Special Landowner Election for Community Facilities District. (Richard Lee, Director of Finance and Steve Mattas, Assistant City Attorney) 2a. Resolution No. 150 -2017 of formation of Community Facilities District, City of South San Francisco Community Facilities District No. 2017 -01 (Public Services and Facilities). 2b. Resolution No. 151 -2017 calling special landowner election for Community Facilities District, City of South San Francisco Community Facilities District No. 2017 -01 (Public Services and Facilities). Assistant City Attorney Mattas provided the staff report recommending that Council (a) hold the continued public hearing on the proposed establishment of the City of South San Francisco Community Facilities District No. 2017 -01 (Public Services and Facilities) (the CFD), (b) adopt the Resolution of Formation of CFD, and (c) adopt the Resolution Calling Special Landowner Election for CFD. Attorney Mattas advised that subsequent to the previously held public meeting, staff met with representatives from Kashiwa Fudosan America, Inc. (Kashiwa) who submitted an additional letter of argument. The letter and a supplemental report from Seifel & Associates along with a memo from special CFD counsel were included in the staff report. Attorney Mattas next provided the current legislative history noting that on October 11, 2017 the Council approved a Resolution of Intention to establish a process to form a CFD which is authorized to make decisions to levy annual special taxes on properties within a CFD boundary based on a 2/3 property vote. Attorney Mattas next stated that the purpose of the CFD is to impose a special tax on the land and those special tax proceeds will be used to finance public services and public infrastructure. Oyster Point Development (OPD), the developer of the property and the Successor Agency are committed to providing $70 million worth of public improvements within the CFD boundary areas. The public improvements and services that would be authorized under the CFD include maintenance of the new public infrastructure, parklands and additional services. The authorized facilities include the replacement or renovation of the fueling line and fueling system out at Point Marina (OPM). The projected public service costs are approximately $1.2 million per year and those are all services which are not presently provided by the City in that area. The proposed cost of the CFD is .39 per square foot ( "sq. ft. "). That breaks down to.32 per sq. ft. levied in perpetuity for the services — the operations and maintenance; and then .07 per sq. ft. for the fueling line for a capped and total collection amount of $2,750,000.00 with a sunset on the tax of 2031. Attorney Mattas closed by restating staff's recommendations as well as Kashiwa's position against the CFD, mainly that it shouldn't be singled out for a special tax assessment when other property owners are not. He further stated that Kashiwa argues it would not obtain significant benefits from the proposed improvements. Public Hearing opened: 7:58 p.m. Attorney Cincotta, representing Kashiwa, addressed Council. He disputed the Seifel Report's conclusion that the proposed improvements could result in a higher property tenant rental rate. Mr. Cincotta asserted that based on its 23 years of building ownership, Kashiwa knew better. It did not like the proposed additional cost of .39 per sq. ft. For Kashiwa, that would amount to a cost of $180,000 per year. SPECIAL CITY COUNCIL MEETING DECEMBER 4, 2017 MINUTES PAGE 2 Kashiwa's Leasing Broker for Oyster Point Plaza, Scott Ynis, addressed Council. He also disputed the Seifel Report. He stated the Class B office value should be $220 -240 per sq. ft. as it was not Biotech space. Jill Vivanko, General Manager of Kashiwa's property, questioned the increased property value ratio relative to parkland and other proposed improvements. She also objected to Kashiwa being the only property owner assessed aside from OPD. John Ullom raised concerns about the fueling station. Mr. Ullom stated it was a dangerous, un- maintained and poorly operated fuel dock. He stated the City hired a consulting firm in late 2016, which assessed the situation and raised concerns about liability for electrocution. The Harbor District wrote to OPD in May 2016 about the fuel docs and state records not being properly maintained. It threatened to take action against the City. He stated that within two (2) months, the Harbor District was put in charge of operations. He further stated that there was no agenda item or documented discussion of this until August of 2017. Mr. Ullom suggested that it is the Harbor District that wanted to form the CFD. He cautioned that $2.5 million in repairs need to be done to the fueling system. Mayor Gupta closed the public hearing. He requested that Council consider and discuss the proposed CFD resolutions. Public Hearing closed: 8:12 p.m. Councilman Addiego stated that he carefully reviewed the information sent to him by staff and the protesters and is certain that the benefits brought to the Kashiwa property would be indirect but substantial. For example, creating a new gateway would provide an enhanced entry to Kashiwa's property. He further believed Kashiwa would benefit from the parkland and infrastructure improvements. He disagreed, however, with any relationship between the fuel dock improvements and the Kashiwa property. Attorney Mattas advised Council could exclude applicability of the CFD fuel facility to Kashiwa properties by adopting a set of documents that would separate the fuel facilities from the charges imposed on Kashiwa. This would move its per sq. ft. cost from .39 to .32. Other members of the CFD would continue to pay the .39 figure. Councilman Addiego next challenged statements made regarding the lack of benefit to Kashiwa due to the absence of biotech space in its impacted buildings. He believed Kashiwa would benefit from having the vibrant OPD Biotech development directly adjacent to it. He further noted that Oncology Therapeutics, a Biotech Company now owned by McKesson, is a Kashiwa tenant. The Councilman further commented that the CFD is a financing mechanism designed to ensure infrastructure improvements against the constraints of Proposition 13. He stated support for the CFD so long as the .07 per sq. ft. for the fueling station was removed from Kashiwa's assessment. Councilman Garbarino commented he believed Kashiwa would benefit directly from the improvements with the exception of those related to the fueling station. He believed it would be reasonable to reduce Kashiwa's assessment by the .07 related to the fueling station. Vice Mayor Normandy agreed. SPECIAL CITY COUNCIL MEETING DECEMBER 4, 2017 MINUTES PAGE 3 Councilwoman Matsumoto stated that while she was not in favor of the CFD, she believed it was reasonable to remove the .07 from Kashiwa's assessment. Mayor Gupta noted Kashiwa's points and stated that he read the corresponding responses provided by the City Attorney, staff and consultants. He was convinced of the proposed CFD's procedural and legal validity. He was not persuaded by Kashiwa's argument of no CFD benefit. He further supported Councilman Addiego's suggestion that the .07 related to the fueling station be removed from Kashiwa's assessment. In that context, he requested that Assistant City Attorney Mattas guide the Council through a vote that would accommodate the proposed revision. Attorney Mattas advised that if the Council were to decide to reduce Kashiwa's assessment by .07 per sq. ft., exhibits B and C to the Resolution of Formation would be modified to this effect. Councilmember Addiego indicated he would like to pursue this option. While he acknowledged that Kashiwa had sent its representatives, he was displeased that no one from the Company was present. He believed the fairness of Council's concession would be lost in translation. Motion— Councilman Addiego /Second — Councilman Garbarino: to approve Resolution No. 150 -2017 as modified with revised exhibits B and C removing applicability of the .07 assessment to the Kashiwa property. Approved by the following roll call vote: AYES: Councilmembers Garbarino and Addiego, Vice Mayor Normandy and Mayor Gupta; NAYS: Councilwoman Matsumoto; ABSENT: None. ABSTAIN: None. Councilwoman Matsumoto requested that record reflect that while she supported the concept of the CFD, she was not comfortable with the way it was structured. She preferred a larger sphere for equity. Motion— Councilman Addiego /Second — Councilman Garbarino: to approve Resolution No. 151 -2017. Approved by the following roll call vote: AYES: Councilmembers Garbarino and Addiego, Vice Mayor Normandy and Mayor Gupta; NAYS: Councilwoman Matsumoto; ABSENT: None. ABSTAIN: None. Recess: 8:33 p.m. Meeting resumed: 8:41 p.m. STUDY SESSION 3. Report regarding a City Council study session on the proposed Oyster Point mixed -use residential development. (Sailesh Mehra, Chief Planner and Marian Lee, Assistant City Manager) Chief Planner Mehra presented the staff report seeking Council's input regarding the proposed Oyster Point mixed -use residential development. He believed it was the first time an application had been introduced for residential east of 101. Chief Mehra then provided an overview of the history the development. He stated that in March 2011, project developer, Oyster Point Ventures (OPV), had a Development Agreement (DA) and Disposition and Development Agreement (DDA) approved by the City. In May 2016 one of the partners — Shorenstein- sold its stake in the Oyster Point development to Greenland USA. An LLC was formed and Greenland became the lead developer. In March 2017, OPD SPECIAL CITY COUNCIL MEETING DECEMBER 4, 2017 MINUTES PAGE 4 submitted an application to revise the development program to include the residential component to the application. The application was also submitted to the Design Review Board (DRB). The DRB requested revised drawings showing more details of the ground level programming for the proposed residential with additional architectural variation on the residential buildings. In August 2017, the Housing Standing Committee of the City Council and Planning Commission reviewed and approved the draft residential plans, the affordable housing agreements and proposed community benefits along with the application but with a requirement on affordability levels and retail uses. In October, the Bicycle and Pedestrian Advisory Committee (BPAC) met and believed the project would be compliant with the master plan. Also in October, the Parks and Recreation Commission agreed that the project would be an improvement to the Oyster Point Plan Area while raising concerns regarding maintenance lighting, multimodal access and more children's activity space. In November 2017, OPD commenced construction on Phase 1 of the infrastructure improvements as part of the organization's project. Chief Mehra presented a PowerPoint with slides depicting the proposal. He stated that staff would like additional guidance from Council as the application moves through the next series of entitlements and milestones. Assistant City Manager Lee provided an overview of expected revenues from the proposed development. She provided a PowerPoint presentation comparing the 2011 entitled project with the current proposal. Essentially, she advised that the impact fees for the project under discussion today are about $42 million compared with the $25 million associated with the 2011 project. The key factors contributing to the differential were the school and park impact fees. The 2017 project also had a higher assessed value coming in at nearly $10 million in property taxes versus 8.8 million on the 2011 project. Assistant Lee explained next steps. Staff would be finalizing the environmental document in December and January. It was also working towards a Planning Commission meeting for further action in February and March of 2018, and then City Council action in March or April. Councilman Gupta thanked staff. He then invited public comment. Reese Isbell, Director of Local Government and Community Relations for the California Life Sciences Association (CSLA), addressed Council. He expressed concerns regarding the process. He opined that it was difficult to comment on a document that hadn't been released. He stated that zoning east of 101 had been planned by the city for 30 years. He stated that despite meetings with the City, he did not know this was in the works and requested more advance notice of such plans in the future. City Manager Futrell advised this was a study session on an issue that was in process and would be brought for hearing and public commentary several times. It was in the beginning stages and would be fully vetted before ever being approved. Daniel Valverde of the Housing Leadership Council (HLC) of San Mateo County addressed Council. He thanked Councilmembers and staff for their vision in considering housing at the Oyster Point site. HLC is incredibly supportive of building housing at the Oyster Point site because the lack of infill housing development is harmful to the environment. In March, UC Berkeley released a report stating that more infill housing means lower greenhouse emissions due to fewer vehicle miles traveled, preservation of open space and other cultural and beneficial uses and less consumption of water and energy. He believed the type of housing being proposed at Oyster Point was exactly what was needed. Mayor Gupta opened Council's discussion of the item. SPECIAL CITY COUNCIL MEETING DECEMBER 4, 2017 MINUTES PAGE 5 In response to a question from Vice Mayor Normandy, regarding for sale units, Director of Economic and Community Development Greenwood advised that pursuant to state law, the City's inclusionary housing ordinance is for for sale housing only. Of the 1191 units proposed, about 496 units are to be `for sale' units. The 20% inclusionary requirement applies to that. Councilwoman Matsumoto requested additional break down on rental and for sale units. Director Greenwood advised the total number of units being proposed is a maximum of 1191 units. Of that, 496 of those units are for sale and the rest are rental. Of course, all of these are projections based on the developer's current planning and pro forma but that is what they've applied for. So the 496 units would be subject to a 20% inclusionary affordable housing requirement generating a need for 99 affordable units total. The developer is proposing that roughly 30 of these units would be for rent on site and that roughly 69 others would be provided at a location other than Oyster Point Marina in town. Councilwoman Matsumoto stated objection to this sequence and believed the affordable units should be built first. In response to a question from Councilman Addiego, Director Greenwood advised the affordable housing proposal would include a split between 70% and 110 %.AMI criteria Director Greenwood advised the proposal would require that the first 30 units of affordable housing be built at the same time as the first group of for sale housing. The remainder would have to start construction before any temporary certificate of occupancy is granted. Councilwoman Matsumoto wanted a stronger enforcement tool than an occupancy certificate. City Manager, Futrell stated that state law and the municipal code govern the process, but the issue could possibly negotiated. Councilman Addiego echoed the concern about delaying 70% of the affordable housing construction. He advised Greenland USA that the need was urgent. In response to a question from Councilwoman Matsumoto, Director Greenwood confirmed the current Transportation Demand Management (TDM) document did not address residential. Councilwoman Matsumoto advised Director Greenwood of other residential developments in the City that had a TDM. She further added that she wanted the City's TDM policy updated. In response to a question from Councilwoman Matsumoto, Assistant Lee confirmed the agreement included $1.3 million for public art and transit. Councilwoman Matsumoto expressed concern about language seemingly designating only $100,000 of this amount for public art. Councilman Addiego addressed the concerns raised by Mr. Isbell and noted that the Biotech industry he represents has a critical need for housing. He then read a letter from Hon. California State Assembly SPECIAL CITY COUNCIL MEETING DECEMBER 4, 2017 MINUTES PAGE 6 Member Kevin Mullin into the record as follows: "I'm honored to have represented SSF as a councilmember and Mayor and currently as the Assembly member for the 22nd District. Additionally, I serve on the Assembly Housing and Community Development Committee and have represented the cities of San Mateo County on the MTC. In these capacities I have seen first -hand the growing jobs, housing, infrastructure imbalance that the Bay Area is facing. Undeniably, housing is a critical need across all of our communities. Cities have to be prepared to take the lead in addressing the planning challenges of the future. After careful consideration, I'm writing to support the housing proposal at Oyster Point Development in SSF. I am proud of the decades of work that we have done to support and grow our booming biotechnology industry and overall economy in SSF. As a result of these efforts, we are a global leader in research development and innovative science. Now it is time to balance that economic growth with housing. We have an opportunity to show that SSF is planning for the future by addressing its jobs, housing and infrastructure issues in a progressive and effective way. By supporting housing at Oyster Point, I am confident that we are retaining SSF's reputation as a leader in cutting edge urban planning. Including housing at Oyster Point also provides a unique opportunity to focus on transit oriented development due to its proximity to transit such as Caltrain, BART and ferries. This project is designed to achieve one of the highest percentages — 40 %- of alternative mode use shifts through a transportation demand management program, reducing cars on the road and promoting the use of public transit, car share and localized commute by bicycle and walking. This project would also provide significant new revenues to the City. It will provide estimated total fees and benefits of $76.4 million dollars consisting of $36.4 million of impact fees, $6.9 million of one -off payments to the City and $5.1 million in community benefits including funding towards a new fire station. These revenues create an opportunity to benefit the entire City and to strengthen our innovative economy. For these reasons I fully support the inclusion of housing at Oyster Point. I believe that it will not only benefit our biotech industry but the City of SSF as a whole. Sincerely, Kevin Mullin, California State Assembly Member 22nd District" Councilman Garbarino commented on an article in which President and CEO Radcliffe of the CSLA was quoted. He noted that while the CSLA supported housing it didn't want it east of 101. This sounded like NIMBYism to him. He stated that the housing need was great in the Biotech community and this was a potential solution to an issue created by growth. In response to a question from Councilman Garbarino, Mr. Gresham of Morrison Foester (representing OPD) advised the purpose of 50,000 sq. ft. of retail included in the plan is to serve the residents and those who will use the adjacent office space. Councilwoman Matsumoto commented that in her many years on the Council, it was very detailed about planning. This precision helped to ensure the success and growth of the Biotech community east of 101. For example, the City built the Oyster Point Overpass and updated its General Plan to address the growth of the industry from a foundational standpoint. She believed that before residential could be pursued east of 101, a strong TDM plan needed to be established. She also believed a BPAC plan was needed. She believed that without these components in place, housing could not be accommodated. Oyster Point was already overcommitted. In order to mitigate the traffic another exit off of 101 would need to be added. SPECIAL CITY COUNCIL MEETING DECEMBER 4, 2017 MINUTES PAGE 7 She believed this would cost over $160 million. She did not believe this was smart development. Vice Mayor Normandy commented that the collaboration and conversation had at study sessions is imperative. She stated that she had concerns with any project east of 101 as far as the impacts on traffic. She stated the signal lights are absurd. She believed the renderings of the residential were gorgeous. She echoed Councilman Addiego's statement that the City could not wait for the affordable housing accompanying this project. Councilman Garbarino concurred. Mayor Gupta stated he would like the City to pursue the opportunity that has been opened up by the proposed change in the OPD plan and seek more opportunities like it for infill housing. He understood the five (5) councilmembers were coming from different directions and believed that was the beauty of democracy. He was thankful for the thoughtfulness of his fellow Councilmembers all of whom shared a passion for their City. City Manager Futrell stated the comments by Council had been extremely helpful and would benefit the City's work with OPD moving forward. He stated the application would move to the Planning Commission and be back before Council sometime in March. Councilman Garbarino requested that the meeting be adjourned in honor of Marlene Prouty. ADJOURNMENT Being no further business, Mayor Gupta adjourned the meeting at 10:20 p.m. in honor of Marlene Prouty. Submitted; i st M i ', City o So t Francisco SPECIAL CITY COUNCIL MEETING MINUTES Approved: Liza Normandy, Mayo City of South San Francisco DECEMBER 4, 2017 PAGE 8