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HomeMy WebLinkAboutMinutes 2018-04-11 @6:00a� y J O c'�LIFOR�lA 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, APRIL 11, 2018 6:00 p.m. CALL TO ORDER TIME: 6:00 p.m. ROLL CALL PRESENT: Councilmembers Addiego and Gupta, and Mayor Normandy. EXCUSED: Councilman Garbarino and Mayor Pro Tem Matsumoto. AGENDA REVIEW None. PUBLIC COMMENTS - comments are limited to items on the Special Meeting Agenda Comments were heard during consideration of Item No. 2a below. CLOSED SESSION 1. Closed Session: Conference with Real Property Negotiators: (Pursuant to Government Code Section 54956.8) Properties: Hotel Site at Oyster Point (APN 015- 010 -600, and more particularly shown as Parcel 6 on Parcel Map 17- 0002). City Negotiators: Alex Greenwood, Nell Selander, and Ernesto Lucero. Negotiating Parties: City of South San Francisco and Ensemble Investments. Under Negotiations: Price and terms for disposition of the property. This item was heard later in the meeting. ADMINISTRATIVE BUSINESS 2. Report regarding a resolution approving the Housing Standing Committee recommendation to select Ensemble Investments as the preferred developer for the Oyster Point hotel site and authorizing the City Manager to enter into an Exclusive Negotiating Rights Agreement with Ensemble Investments. (Ernesto Lucero, Economic Development Coordinator) 2a. Resolution No. 50 -2018 approving the Housing Standing Committee recommendation to select Ensemble Investments as the preferred developer for the Oyster Point hotel site and authorizing the City Manager to enter into an Exclusive Negotiating Rights Agreement with Ensemble Investments. Mayor Normandy determined to take public comment before hearing the staff report on the item. She allowed two (2) minutes per speaker card as the time limit. Speakers and their comments are summarized below. The overwhelming majority of speakers identified requested that Council include a Card Check Neutrality Agreement as part of the ultimate Ground Lease Agreement concerning the property. Via an interpreter Rong Ya Song stated she worked at the SFO Marriott Waterfront forl3 years. She was present to ask the City of South San Francisco to require a Card Check Neutrality Agreement (CCNA) before approving the ENRA. She stated that hotel labor is grueling and hotel workers need a union for protection. Unions ensure good health care, a good wage, job security and retirement with dignity. She stated the City of South San Francisco had the right to require a CCNA. Jose Flores stated the hotel opportunity at Oyster Point was significant to the City and potential workers at the hotel. Hotel laborers were looking to be part of this great step. He asked the City to require a CCNA before the ENRA is approved. He stated he had been working in the industry for the last nine (9) years. It had been gratifying to work with local team support, because it provided peace of mind about medical benefits, respect for employers and opportunities —like this evening- to be present as a local team member trying to help future hotel employees. It's very important to have a formal CCNA because it increases the chances of having locals working hard to prevent abuses over employees. That's the reason he began by noting today was a very important day for the City and local workers. Cynthia Gomez stated a union can change the course of a hospitality worker's life. She stated that she reaches out to hotel developers every week requesting that they sign a CCNA guaranteeing a fair process for workers to join a union. She emphasized that to date the conversations with Ensemble Investments were positive on this point. At the same time, no matter where in the process she reaches out, she frequently hears from developers that it is either too late or too early to consider a CCNA. To her, both of those mean no. She rhetorically posed the question: "Is it too late to sign this agreement SPECIAL CITY COUNCIL MEETING APRIL 11, 2018 MINUTES PAGE 2 here ?" and answered it "No." However, she opined that if the process continued, eventually it would be too late. She continued that eventually the developer would be able to say that additional requirements could not be added. She cautioned that the longer Council waited to require a CCNA, the less likely it is to be included in the Ground Lease Agreement. Further, she did not believe it was too early to require a CCNA. She stated that the ENRA removes one of the last major obstacles to this developer leasing this land. She believed it was one of the last pieces of leverage the City had and she was requesting that Council use it. Local hospitality workers were relying on Council and the developer to do the right thing and not let this project move forward any further without including a CCNA requirement. Next to address Council was Mike Lagomarsino, President and Business Representative of Teamster's Local 856 in San Bruno, representing over 1000 hotel workers in San Francisco and on the Peninsula. As always, he was very proud to stand with his brothers and sisters in Local 2. He believed the speakers before him had eloquently described the necessity of a CCNA. He stated that he had the great pleasure of actually raising his children here. His family lived in South San Francisco for about 25 years. The City Council could do itself proud by agreeing to require a CCNA tonight so that the workers- the folks that work at the hotel- might have the opportunity to actually live in the City and spend their money here, have employer paid health insurance, security on the job, a pension and dignity at work. Mr. Lagomarsino closed by thanking Councilmembers for their time and encouraging them to require a CCNA. Jaime Vargas a 13 year employee of the Housekeeping Department at the San Francisco Airport Marriott Waterfront appeared before Council to reiterate the significance of the importance of having a union at work. The City of South San Francisco had the right to require a CCNA. It's the right thing for the hotel workers and it was stressed that workers in South San Francisco deserve it. Julia Hernandez an employee of the SFO Marriott Waterfront for three (3) years stated that together with her co- workers she had been fighting for a fair process for some time. The response from management has been silence. She opined that management did not appreciate the power of its silence. In its inability to take a stand and do the right thing, management had given the employees a unifying voice. Tonight, she and her coworkers were using that voice to say that they have had enough. They would no longer allow the disrespect and deplorable working conditions to be endured day in and day out. They would no longer allow their bodies to be pushed to do more because their companies do not wish to employ more people. They would no longer accept that their management is willing to risk their safety and health in the name of business. She and her coworkers could no longer afford to live in this community. She opined that people say we live within a democracy, but freedom is being surrendered through continued silence. Ms. Hernandez stated she had grown up in a time in which she had seen people place their home, well -being and interests after the needs of their companies for profit. Ms. Hernandez was tired of seeing this be the case. She stated that she and her coworkers deserved lives in which people and their well -being are placed over profits. They deserved the right to have a voice and a fair process. She and her coworkers had recognized the need for a union in their workplace. She encouraged Council to require a CCNA to show the companies that they are willing to stand up for the people they represent and make the community a better place. Raymond Chang who had emigrated from Figi several years earlier stated he worked for the SFO Marriott Waterfront. Alongside his coworkers, he fought for a fair process. He urged Council to include a CCNA as part of the ultimate agreement with Ensemble. In his 11 years of work for the SPECIAL CITY COUNCIL MEETING APRIL 11, 2018 MINUTES PAGE 3 Marriott he had come to appreciate the hospitality labor community's hard work. He believed the new hotel's employees deserved union protections. Manuel Choi a 21 year employee of the SFO Marriott Waterfront worked in room service, banquet and the restaurant delivering food to about 30 -45 rooms, walking about 7 -8 miles in the hotel. He addressed Council this evening to request establishment of CCNA in the agreement with ensemble. By forging such a requirement, Council could demonstrate its commitment to a fair process for local workers. Resident Erika Prado of Local 2 commented on the benefits of working in a job protected by a union. She had been in the food service industry for years and presently was a server at SFO. Mrs. Prado stated that her family benefitted from her job, which allowed a good quality of life. Mitra Elie, an employee of the Pullman Hotel in Redwood City stated that the assembled hospitality employees asked Council to require a CCNA before approving the ENRA. She stated the agreement would ensure that workers a choice free from intimidation and retaliation. Michael E. of the SFO Marriott Waterfront stated that non -union hospitality workers are not free to enjoy all the benefits of the American Dream. He urged Council to require a CCNA before going any further with negotiations. Speaking via an interpreter resident Hercila Villalobo, a 12 year housekeeping employee of the SFO Marriott Waterfront, appeared before Council because in 2014 she had an accident on the job. The accident caused weakness in her body and neurological system. Her doctor recommended restrictions at work. Due to the restrictions, the hotel told her it did not have a job for her anymore and recommended disability. The disability payments are insufficient against the cost of living in this area. Mauricio Esquivel, a 29 year kitchen employee of the SFO Marriott Waterfront, spoke of unhealthy working conditions in the kitchen at the hotel. To help address these concerns, the workers had joined the efforts to fight for a fair process. He hoped that employees of the new hotel in South San Francisco would have the benefit of a union at the outset to avoid the hardship and retaliation he and his coworkers faced as a result of efforts to unionize and protect their health. Resident Priscilla Paris Huerta addressed Council. She stated she and her family had lived in South San Francisco for 20 years and her husband was a lifelong resident. The benefits of union work have permitted her family to remain in the City and enjoy a good quality of life. She encouraged Council to support the CCNA so that other hospitality workers could enjoy these benefits. Juan Chavez, an employee of the Pullman Hotel in Redwood City addressed Council. He stated the importance of requiring a CCNA at the outset as it was nearly impossible for employees to unionize later without facing retribution and retaliation. Vischuda, a server at the SFO Marriott Waterfront addressed Council and echoed concerns of other employees at that hotel. He stressed the importance of requiring a CCNA at the outset of negotiations. SPECIAL CITY COUNCIL MEETING APRIL 11, 2018 MINUTES PAGE 4 Laurel Fish an organizer for United Local 2 addressed Council to contrast what Councilmembers may have heard from hotel developers with the reality of what the hotel workers presented this evening. She discussed the results of a 2017 survey revealing deplorable working conditions in San Mateo County hotels. For example, she stated that developers often promise competitive wages and benefits; the reality is that the average wage was $14.48/hr. Workers had to put in over 63 hours a week at multiple jobs because they weren't able to make ends meet. Some were paid as little as $12/hr. and the cost of benefits that workers had to pay out of their pockets overshadowed their wages. She quoted amounts over $500 /mo. for health insurance. Ms. Fish stated that another thing that developers often say is that they respect their workers like family. She questioned the veracity of this position stating that if developers thought of employees as family, they wouldn't have back breaking standards in their hotels. She noted that 42% of workers surveyed cleaned more than 20 rooms per day. Some cleaned up to 32 rooms per day. That yielded an average of 15 minutes per room without breaks. Ms. Fish stated that the only thing to protect against this unfairness is a union contract. She urged Council to require the CCNA. Resident Lisa Lam an employee of the Sheraton at the Fisherman's Wharf and a Local 2 member stated that she and her family have afforded a good life in South San Francisco because she has a union job. She urged Council to require a CCNA as part of the agreement with Ensemble. Meeting recessed: 6:56 p.m. Meeting resumed 7:15 p.m. Community Development Coordinator Lucero presented the staff report recommending that Council adopt a Resolution approving the Housing Standing Committee recommendation to select Ensemble Investments as the preferred developer for the Oyster Point Hotel site and authorizing the City Manager to enter into an Exclusive Negotiating Rights Agreement with Ensemble Investments. Coordinator Lucero provided a PowerPoint presentation that began by depicting a map of the area, pointing out that the proposed hotel site was in walking distance of the ferry terminal. In March 2011, a Disposition and Development Agreement (DDA) was executed between Oyster Point Ventures and the City. The DDA and subsequently approved Oyster Point Specific Plan identified a 4.7 acre, City - owned parcel as an opportunity site for the development of an upscale hotel. The Specific Plan provided preliminary entitlements for up to 350 hotel rooms and 40,000 square feet of retail amenities on the site. Coordinator Lucero continued noting that market data shows potential for the success of an upscale hotel. New life science construction has surpassed the supply of high quality, upscale hotel brands in the area, making the Oyster Point area a prime location for this use. Coordinator Lucero continued noting that following an intensive request for proposal and quote process, the selection committee recommended Ensemble Investments as the preferred developer for the project. Julie Purnell, Managing Director of CBRE Hotels Consulting Division addressed Council to discuss the market and potential hotel chain scale for the site. She explained there are about 1850 rooms in the South San Francisco hotel market. Until October of 2017, there hadn't been new additions to the market for several years. AC Hotels joined at that time and has been a welcome addition. With the lack of growth in hotels, occupancies have been strong at about 84 %. Ms. Purnell stated that South San Francisco is a fantastic location for a hotel just outside of San Francisco and close to SFO. The market predicts an upper upscale chain scale for this site. This chain scale includes hotel companies such as Hilton, Marriott, Hyatt, Hyatt Regency, Kimpton, Sheraton, Renaissance and Westin. SPECIAL CITY COUNCIL MEETING APRIL 11, 2018 MINUTES PAGE 5 Ensemble representatives Brian Erlich, Chief Investment Officer, and Michael Moskovitz, Chief Financial Officer, provided a PowerPoint presentation to Council. Mr. Erlich stated that Ensemble was founded in 1990 and had grown to over 400 employees and 1.4 billion worth of real estate projects, including a total of 10 hotels with 3 in the pipeline. Mr. Erlich displayed a slide depicting Hotel MIA in Menlo Park. Ensemble believed the project at Oyster Point would be similar to this project and serve a similar clientele. The team has great market presence in California and is familiar with complex entitlement processes and ground lease structuring. Mr. Erlich believed the assembled project team was world- class, including Cunningham Architect Group, Kimley Horn Civil Engineering and Lifescapes International, Inc. Landscape Architects. Mr. Erlich expressed Ensemble's vision for an iconic property that would accommodate the needs of the biotech community in the area, but also serve a place for the community to gather and hold events. The chain scale calls for a full service lifestyle hotel that would take advantage of open space and the views to which the site avails itself. Councilman Gupta commended Ensemble on a clear vision for the development. He thanked the Housing standing committee for its shortlisting process and identifying this developer's strong points. Mayor Normandy thanked Ensemble for its presentation. She expressed concern regarding planned hotel parking spaces. She believed the proposal was inadequate to serve event parking needs when the hotel operates at full occupancy. Mr. Erlich responded that Ensemble worked with consultants to carefully study parking. The study found that parking demand, in general, is going down for a number of reasons. For instance, a lot of people are electing not to drive. Additionally, in a hotel of this nature, group business is typically in- house so there is overlap. In any event, Ensemble is focused on making sure the quality of experience fits the quality of the hotel and that it has sufficient parking. Mayor Normandy invited City Manager Futrell to address a conversation staff had with ensemble during the recess. Mr. Futrell advised that during the recess, staff spoke with Ensemble regarding the possibility of a CCNA. City Attorney Rosenberg explained Ensemble agreed to amend Exhibit B (the ENRA) to the proposed resolution to add an additional term titled "Card Check Neutrality Agreement." The description under the term would be "explore feasibility" so that discussion of CCNA would ultimately be part of this negotiation process for the Ground Lease. If the Council would like to include that additional term into Exhibit B of the Resolution, he would walk Council through the process. Councilmembers agreed a CCNA discussion should be part of the negotiations. CLOSED SESSION 1. Closed Session: Conference with Real Property Negotiators: (Pursuant to Government Code Section 54956.8) SPECIAL CITY COUNCIL MEETING APRIL 11, 2018 MINUTES PAGE 6 Properties: Hotel Site at Oyster Point (APN 015- 010 -600, and more particularly shown as Parcel 6 on Parcel Map 17- 0002). City Negotiators: Alex Greenwood, Nell Selander, and Ernesto Lucero. Negotiating Parties: City of South San Francisco and Ensemble Investments. Under Negotiations: Price and terms for disposition of the property. Time entered Closed Session: 7:30 p.m. Open Session resumed: 7:40 p.m. Report out of Closed Session by Mayor Normandy: Direction given. ITEM NO.2 AND 2(a)- continued Mayor Normandy invited City Attorney Rosenberg to walk Council through the proposed Resolution. City Attorney Rosenberg specified the revisions to the proposed resolution as follows: "A resolution to approve the Housing Standing Committee recommendation to select Ensemble Investments as the preferred developer for the Oyster Point hotel site and authorizing the City Manager to enter into an Exclusive Negotiating Rights Agreement with Ensemble; and to add to Exhibit B Development Proposal, a criteria titled "card check neutrality agreement" and the description on that would be "explore feasibility. "" Motion — Councilman Gupta/Second— Councilman Addiego: to approve Resolution No. 50 -2018. Approved by the following roll call vote: AYES: Councilmen Addiego and Gupta and Mayor Normandy; NAYS: None; ABSENT: Councilman Garbarino and Mayor Pro Tem Matsumoto; ABSTAIN: None. ADJOURNMENT Being no further business, Mayor Normandy adjourned the meeting at 7:45 p.m. Submitted: Krista e i Clerk City of Sout San Francisco SPECIAL CITY COUNCIL MEETING MINUTES Ap rove Li rman y, Mayor City o uth San Francisco APRIL 11, 2018 PAGE 7