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HomeMy WebLinkAboutMinutes 2019-12-20 @8:30MINUTES �Tx s4,1, CITY COUNCIL w CITY OF SOUTH SAN FRANCISCO Cn J O SPECIAL MEETING c'gLIFOCITY HALL, CITY MANAGER'S CONFERENCE ROOM 400 GRAND AVENUE SOUTH SAN FRANCISCO, CA FRIDAY, DECEMBER 20, 2019 8:30 A.M. CALL TO ORDER Time: 8:30 a.m. ROLL CALL Present: Councilmembers Nagales, Nicolas, Vice Mayor Addiego and Mayor Garbarino. Councilmember Matsumoto (arrived at 8:40 a.m.). No changes PUBLIC COMMENTS None CLOSED SESSION 1. Closed Session conference with real property negotiators (Pursuant to Government Code Section 54956.8) Property: 249 Grand Avenue (APN 012-316-030) Agency Negotiators: Nell Selander and Julie Barnard Negotiating Parties: City of South San Francisco and Keith Phillip Cattaneo, Kenneth Lynn Cattaneo, Lee Ray Cattaneo and Marty Dean Cattaneo Under Negotiation: Review of Price and Terms Time entered Closed Session: 8:33 a.m. Meeting resumed: 9:06 a.m. Report out of Closed Session by Mayor Garbarino: Direction given. No reportable action. ADMINISTRATIVE BUSINESS 2. Report regarding a resolution approving a Purchase and Sale Agreement for 249 Grand Avenue (Julie Barnard, Economic Development Coordinator). Economic Development Coordinator Barnard presented the report and stated that the property at 249 Grand Avenue (APN 012-316-030) is located between City Parking Lot 4 and the mixed-use building at 257 Grand Avenue, currently occupied by Izanami Japanese Restaurant. The property is 3,900 square feet with Grand Avenue street frontage. A long-standing South San Francisco business, The Topper sports bar, occupies the ground floor, with one residential unit on the second floor ("the Topper Site"). The property owners are the Cattaneo family, which is comprised of four brothers who hold equal shares in the ownership of the property ("the Sellers"). The Topper bar is owned and operated by one of the four Sellers and the residential unit is currently occupied. She indicated that the Topper Site was listed for sale in September 2019 for $2 million with several interested parties. Given that the Topper Site is located in a prime location of the city's downtown, the City of South San Francisco ("the City") also considered the benefits of competing for the purchase of the site. The intent of purchasing the Topper Site would be to allow the City to retain site control for a future assemblage with the adjacent City -owned parking lot. The benefit of site control would allow the City to determine the highest and best use of the property at the appropriate time and to allow for greater input into the design of the future building. On December 3, 2019, the City of South San Francisco submitted an initial offer ("City Offer") to the Sellers and commissioned an appraisal. The City Offer included a price offer and a request for exclusive negotiation rights. A counter Letter of Intent dated December 5 was received from the Sellers on December 9, 2019. The First Counter Letter Of Intent stated that the Sellers were extending multiple counter offers to other prospective Buyers. The Sellers would not enter into an exclusive negotiation agreement and stated that only a fully executed Purchase and Sale Agreement ("PSA") shall bind the parties. The City provided a second offer ("Second City Offer") on December 11, which met the First Counter Letter Of Intent price offer of $1,950,000 cash and specified the following terms: • Completion of an appraisal of the Property by the City; • Purchase and Sale Agreement subject to City Council approval on January 8, 2020; • 30 -days Close of Escrow; • Property inspection during escrow; • The Topper owner -operator may maintain the bar for a term of 24 months at a rental rate of $3,000 per month, reverting to a month to month lease thereafter; • The residential tenants may continue their lease for a term of 24 months at a rental rate of $1,800 per month, reverting to a month to month lease thereafter; and • Upon the voluntary termination of The Topper business and vacation of the unit by the current owner -operator, the owner -operator will convey the business and liquor license to the City. On December 13, the Sellers provided a second counter ("Second Counter LOI') that requested a special City Council meeting by no later than December 20, 2019, and a request for The Topper owners to maintain the bar at a rate of $1500 per month (the current rental rate) for 24 months or until such time as the building is demolished, with the City to receive the liquor license. The counter offer was driven by the other prospective buyer, as relayed to us by the Sellers' representative. Staff submitted a Third City Offer ("Third City Offer") that conditionally agreed to these terms, contingent upon approval of a PSA by the City Council, and provided that the City received exclusivity in negotiating with the Sellers. This was accepted with a few minor amendments including extending the Close of Escrow to 90 -days in order for the City to perform environmental reports. Ultimately, the business points that were negotiated as part of this purchase include: SPECIAL CITY COUNCIL MEETING DECEMBER 20, 2019 MINUTES PAGE 2 • A price offer of $1,950,000; • The residential tenants may continue their lease for a term of 24 months at a rental rate of $1,800 per month, reverting to a month to month lease thereafter; and • The Topper owner -operator may maintain the bar for a term of 24 months at a rental rate of $1,500 per month, reverting to a month to month lease thereafter at the same rental rate; • Upon the voluntary termination of The Topper business and vacation of the unit by the current owner -operator, the owner -operator will convey the business and liquor license to the City; • Purchase and Sale Agreement ("PSA") subject to City Council approval on or before December 20, 2019. Economic Development Coordinator Barnard stated that the $10,000 deposit was not paid to the Sellers because the City had not entered into exclusive negotiation rights and the appraisal had not been completed. Councilmember Matsumoto inquired about the various options the City had to determine the design of the building. Economic and Community Development Director Greenwood stated it would be subject to the current zoning and development standards of the Downtown Specific Plan. Vice Mayor Addiego indicated he understood the City's interest in lot assembly but was not interested at this time to build on Grand Avenue. Councilmember Nicolas concurred with Vice Mayor Addiego. She expressed her desire to keep the look and feel of downtown South San Francisco. Councilmember Matsumoto inquired if the City could control the look and design of the building if it was sold. City Manager Futrell stated that the City would have control if the building were to be demolished and rebuilt. City Attorney Woodruff stated if changes to the building were in regards to signage and complied with current regulations then the potential owner could make changes and would not require discretionary review. Mayor Garbarino inquired if the potential owner could change the facade and remove the black tiles. Economic and Community Development Director Greenwood stated they could do a drastic fagade change but would have to be approved by the Design Review Board. There are design guidelines specific to the downtown and the City could make changes through the General Plan update process. City Manager Futrell provided an example of a fagade change without discretionary review, Hometown Bowl. Councilmember Nagales stated that the City gets a lot of criticism in regards to all the changes and the downtown, however keeping the existing feel is what makes the City unique. Councilmember Matsumoto stated that the City was going through a dynamic change and for years have wanted to make the downtown vibrant and walkable. The City should be adding to the downtown not replacing. Councilmember Nagales inquired about the zoning for the property. Economic and Community Development Deputy Director Selander stated the zoning is the Grand Avenue Corridor and is intended to preserve the street level pedestrian retail corridor. SPECIAL CITY COUNCIL MEETING DECEMBER 20, 2019 MINUTES PAGE 3 The item was tabled for further discussion. Motion—Vice Mayor Addiego/Second—Councilmember Matsumoto: To table the item. Approved by the following roll call vote: AYES: Councilmember Nagales, Vice Mayor Addiego, Councilmember Matsumoto, Mayor Garbarino and Councilmember Nicolas; NAYS: None; ABSENT: None; ABSTAIN: None. ADJOURNMENT Being no further business, Mayor Garbarino adjourned the meeting at 9:20 a.m. Re ectfully submitted by: Apved: Cindy AWla - Richard'Garbarfno Assistant City Clerk Mayor Approved: Oo?/Iv2/ 10.20 SPECIAL CITY COUNCIL MEETING DECEMBER 20, 2019 MINUTES PAGE 4