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HomeMy WebLinkAbout08.10.2016 Joint SP & PCH Minutes @6:30 MINUTES SPECIAL JOINT MEETING OF THE ttcre- 1_ JOINT HOUSING STANDING FOR COMMITTEE OF THE CITY COUNCIL AND THE PLANNING COMMISSION AND THE SUCCESSOR AGENCY OF THE CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 Meeting will be held at: MUNICIPAL SERVICES BUILDING COUNCIL CHAMBERS 33 ARROYO DRIVE WEDNESDAY, AUGUST 10, 2016 6:30 p.m. Call to Order. TIME: 6:30 p.m. Roll Call. PRESENT: Councilmembers Normandy, Matsumoto and Garbarino, Vice Mayor Gupta and Mayor Addiego, Planning Commissioners Wong, Ruiz and Vice Chair Faria. ABSENT: None. Public Comments. None. Matters for Consideration. 1. Staff Report: Interviews and discussion of shortlisted developers for property located at 200 Linden Avenue and 212-216 Baden Avenue. (Ron Gerber, Housing Manager) Housing Manager Gerber presented the staff report regarding property located at 200 Linden Avenue and 212-216 Baden Avenue. He introduced a two-step process. The first step consisted of both OMNI Investments and RAHM Hotels separately making a ten (10) minute presentation followed with some questions and answers. The second step consisted of Boardmembers and Committee Members entering into Closed Session. Staff requested a recommendation for a preferred developer and an alternate. OMNI Investments representative Ken Cui presented its proposal to the Standing Committee Members. The developer proposed eighty-seven (87) condominium units with some ground floor commercial. The proposal included a unit mix of one (1) to three (3) bedrooms with twenty percent (20 %) of the units offering Below Market Rate (BMR) opportunities. The developer's initial parking calculations included one hundred two (102) stalls at podium grade. Mr. Cui reported the project would be staffed with one hundred percent (100 %) union labor. Mr. Cui introduced John Baker from Swinerton Construction Management. Mr. Baker provided a brief presentation regarding Swinerton's experienced design and construction team. He continued by stating DSK Architects and Swinerton have worked together on over one hundred million dollars ($100,000,000) in development projects and worked together with Mark Seiberlich for over twenty (20) years. The entity has over two thousand (2,000) units of multi-family experience. Mr. Baker reported delivering consistent results and quality projects by working closely with City staff and being familiar with the City's process. He also stated extensive expertise with dense urban sites. Mr. Baker introduced Mark Seiberlich from DSK Architects. Mr. Seiberlich continued the presentation by explaining how OMNI's proposal supports the City's Downtown plan goals. He went on to say that eighty-seven (87) units of new owners in the Downtown would enhance Grand Avenue. Cushman and Wakefield was exploring a pharmacy on the site within walking distance to the Caltrain Station. OMNI Investments was LEED certified, twenty percent (20 %) of the homes sold as BMR and would be one hundred percent (100 %) union labor. He continued by summarizing the unit mix for the project: 12 units would be 1 bedroom, 40 units would be 2 bedrooms, 25 units would be the bigger 2 bedrooms and 10 would be 3 bedrooms. Mr. Seiberlich invited Kevin Cui to close out the presentation. OMNI Investments representative Ken Cui closed OMNI's proposal and stated he was confident it had the right team to design, build and finance a project everyone would be proud to have in Downtown. Architect and Project Manager for RAHM Hotels Jim Heilbronner reported RAHM has numerous hotels in operation with five (5) hotels currently under construction on the Peninsula and ten (10) in California. Mr. Heilbronner presented the concept for the project as follows: marry the hotel with a Downtown format of a traditional one (1) story retail Downtown keeping that texture on the first floor to generate some incubator retail space, but not challenge other retail space in town. Mr. Heilbronner stated there were two (2) hotels. They were different companies, with both hotels having separate operations, lobbies and elevators. He continued stating both hotels would have a common driveway going through the site with underground parking. The entrance for one (1) hotel would be on the corner with the other hotel entrance on Baden Avenue. Both hotels would have interior off the street drop-offs to keep traffic off the street and would all circulate down into the multi-level garage. Mr. Heilbronner stated the upper floors would be a large "U" shaped building surrounding a courtyard. He clarified it would be a six (6) story building with a concrete first floor with wood frame construction. Mina Patel advised RAHM has been in the hotel industry for twenty-eight (28) years and for this particular project decided to go with two (2) separate brands, one (1) for extended stays and the SPECIAL JOINT HOUSING STANDING COMMITTEE AUGUST 10,2016 AND SUCCESSOR AGENCY MEETING MINUTES PAGE 2 other for limited service creating almost $1.2 million a year in Transient Occupancy Tax while also creating jobs. Ms. Patel stated RAHM was looking at possibly a Hilton and Marriott brand if available. Manager Gerber invited the Committee Members to inquire of the presenters. Price and terms were not yet on the table. Planning Commissioner Wong asked OMNI Investments whether it had an entity in mind for the drug store and how far along it was in that process. Commissioner Wong further asked RAHM Investments where it was in the process of finding the two (2) hotel brands for the project. Mr. Cui responded it already retained a retail broker and had been talking to Walgreens and CVS. On behalf of RAHM Mr. Heilbronner reported both Marriott and Hilton Hotels had shown interest and the branding underneath those two (2) was the open question relative to speed of bringing the project to the table. Councilwoman Matsumoto asked whether the extended stay rooms would have a kitchen. Mr. Heilbronner confirmed those rooms would have micro kitchens. He continued by stating in his experience, most guests do not utilize them for cooking. The main use would be to reheat leftovers purchased from restaurants. Councilwoman Matsumoto queried the average length of stay for extended stay rooms and for regular rooms. Mr. Heilbronner responded the average regular stay was two (2) to three (3) days and two (2) weeks for extended stay. Councilwoman Matsumoto inquired about parking. Mr. Heilbronner replied car use and parking in urban areas had gone down due to public transit and companies like Uber and Lyft. Meeting recessed: 7:00 p.m. Meeting resumed: 7:05 p.m. Councilwoman Matsumoto asked RAHM Hotels whether they would be using prevailing wage for this project. Mr. Heilbronner confirmed that it would. Mayor Addiego queried the square footage range for retail space. SPECIAL JOINT HOUSING STANDING COMMITTEE AUGUST 10,2016 AND SUCCESSOR AGENCY MEETING MINUTES PAGE 3 Mr. Heilbronner answered one of the benefits of being part of the hotel complex was the retail spaces could be absorbed inward. He continued by saying there were pods in Oakland that were in the neighborhood of 200-300 square feet. Councilwoman Normandy asked OMNI Investments if it had been on the same address on Grand Avenue for twenty-two (22) years. Mr. Cui responded stating it had been at the Grand Avenue location for thirteen (13) to fourteen (14) years. Prior, the company was at Spruce Avenue. Councilwoman Normandy added this was the first time she heard about OMNI teaming up with Swinerton and believed it to be a step in the right direction. Mr. Cui stated it does financial analysis and advises clients on investment purposes. Mr. Cui added it has a sister company that was a CPA firm that handles tax advice for clients and advised it built a strong team for South San Francisco. Vice Mayor Gupta inquired about OMNI's perception of its condo owners in terms of marketing analysis of bedroom numbers. Mr. Cui answered it looks at the market trend to determine the marketable unit mix. He stated that two (2)bedroom units were the most desirable. Councilman Garbarino commented that when Council put together the Downtown Area Specific Plan he thought its thinking was to build a sense of community. Housing would give that sense of community. He continued by stating while hotel guests would spend some money on restaurants and shops short term, residents would be here long term supporting local restaurants and merchants. Councilman Garbarino believed permanent residences to be a more viable option. Planning Commissioner Ruiz stated he received an answer from OMNI regarding shared parking. He stated the proposals were to provide adequate parking spaces within the site and now he was hearing from RAHM that it was shared parking. Mr. Heilbronner confirmed its proposal was to cover its parking within the site. Mr. Baker added there was a mix in parking. There was parking, public parking for the retail space and parking for the housing space. Different configurations were considered to maximize space so there would be a mix of retail and resident parking. Vice Chair Faria asked OMNI whether it would be able to support the actual public traffic, given the inclusion of a pharmacy. Mayor Addiego followed up on Planning Commissioner Faria's question and asked for the square footage for the pharmacy and the type of parking it would need. SPECIAL JOINT HOUSING STANDING COMMIYrEE AUGUST 10,2016 AND SUCCESSOR AGENCY MEETING MINUTES PAGE 4 Mr. Cui responded it was looking at five thousand (5,000) square feet whereas the typical pharmacy was around ten thousand (10,000) square feet. He continued stating a larger store wasn't necessary on high density locations since the drug store was intended to serve the neighboring residents. Mr. Cui stated it has on-site parking but expects more residents traveling by foot. Mayor Addiego spoke regarding the desirability of Downtown for larger operating drug stores and was led to believe there was currently not much interest. Manager Gerber stated he did not check with Walgreens but spoke with the real estate director of CVS, which indicated it would prefer a larger format for its store. Mayor Addiego stated in the course of putting the project together, OMNI stated its goal was to have a drug store and Cushman and Wakefield was exploring the possibility. Mayor Addiego expressed interest in a supermarket in Downtown to resemble others in the neighboring cities. Mayor Addiego asked how Council responds to the Developer Agreement if it was not getting the retail store it wanted. Manager Gerber stated Council could come to terms in the type of retail it would like and work with the developer during ENRA negotiations to figure out what that ground floor concept should be. Economic and Community Development Director Alex Greenwood added there were a lot of open questions regarding both proposals and staff would encourage the Committee to think first and foremost about the dominant use, condos versus hotel. He stated the street level use would be important for the pedestrian life of the Downtown, but secondary to the core use of the property. Mayor Addiego reiterated it was a very small commercial core for Downtown by any comparison up and down the Peninsula. Mayor Addiego queried the opportunities if there were five thousand (5,000) square feet of space and no tenant. Director Greenwood advised there would be opportunities to lease five thousand (5,000) square feet in a Downtown market like South San Francisco. Mayor Addiego acknowledged Director Greenwood as the resident expert and asked what he envisioned going into Downtown if drug store retailers were not prepared today to enter South San Francisco. Director Greenwood responded dining, entertainment and convenience retail. Councilwoman Matsumoto stated residents would love to have ownership, but she doesn't see a lot of units for sale. She believed this would be an investment in the community that showcases what South San Francisco was about not only in Downtown retail,but family. SPECIAL JOINT HOUSING STANDING COMMIT EE AUGUST 10,2016 AND SUCCESSOR AGENCY MEETING MINUTES PAGE Mayor Addiego stated South San Francisco was fortunate to have the two (2) proposals and appreciated the interest in investment in South San Francisco. Closed Session. Time entered Closed Session: 7:24 p.m. Time returned from Closed Session: 7:50 p.m. 2. Closed Session: Conference with Real Property Negotiators (Pursuant to Government Code Section 54956.8) Properties: 200 Linden Avenue, 212 and 216 Baden Avenue Negotiating Parties: South San Francisco Successor Agency/City of South San Francisco and BayRock Multifamily LLC, RAHM Investments and Omni Investment Group Under Negotiation: Review Price and Terms (Ron Gerber, Housing Manager) Report out of Closed Session by Mayor Addiego: Mayor Addiego reported the following Action: Unanimous vote to recommend the Oversight Board approve OMNI Investments as the preferred developer. Adjournment. Being no further business Chair Addiego adjourned the meeting at 7:51 p.m. Submitted: Approved: t4114-011.Gabriel Rodriguez, Deputy City Clerk Mark ddiego, Chair City of South San Francisco City of South San Francisco SPECIALJOINT HOUSING STANDING COMMITTEE AUGUST 10,2016 AND SUCCESSOR AGENCY MEETING MINUTES PAGE 6