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Home My WebLink About2013-11-12 E-PacketP.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 CITY HALL LARGE CONFERENCE ROOM, TOP FLOOR 400 GRAND AVENUE TUESDAY, NOVEMBER 12, 2013 2:00 P.M. PEOPLE OF SAN MATEO COUNTY You are invited to offer your suggestions. In order that you may know our method of conducting Board business, we proceed as follows: The regular meetings of the South San Francisco Oversight Board for the Successor Agency to the City of South San Francisco Redevelopment Agency are held on the third Tuesday of each month at 2:00 p.m. in the in the Large Conference Room, Top Floor at City Hall, 400 Grand Avenue, South San Francisco, California. In accordance with California Government Code Section 54957.5, any writing or document that is a public record, relates to an open session agenda item, and is distributed less than 72 hours prior to a regular meeting will be made available for public inspection in the City Clerk's Office located at City Hall. If, however, the document or writing is not distributed until the regular meeting to which it relates, then the document or writing will be made available to the public at the location of the meeting, as listed on this agenda. The address of City Hall is 400 Grand Avenue, South San Francisco, California 94080. In compliance with Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the South San Francisco City Clerk's Office at (650) 877-8518. Notification 48 hours in advance of the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. ChaiKperson: Neil Cullen Selected by: Largest Special District of the type in HEIR. Code Section 34188 Vice Chair: Selected b : Patti Ernsberger San Mateo County Superintendent of Schools Assistant Superintendent, Business Services South San Francisco Unified School District Alternate: Alejandro Hogan Superintendent, South San Francisco Unified School District Board Members: Mark Addiego Councilmernber, City of South San Francisco Gerry Beaudin Principal Planner, City of South San Francisco Barbara Christensen Director of Community/Government Relations, San Mateo County Community College District Reyna Farrales Deputy County Manager, San Mateo County Paul Scannell Counsel Craig Labadic Selected b : Mayor of the City of South San Francisco Mayor of the City of South San Francisco Chancellor of California Community College San Mateo County Board of Supervisors San Mateo County Board of Supervisors (Public Member) Advisory Jim Steele — Finance Director, City of South San Francisco Robin Donoghue — Interim General Counsel, Successor Agency of the City of South San Francisco Krista Martinelli — City Clerk, City of South San Francisco Armando Sanchez — Redevelopment Consultant, City of South San Francisco CALL TO ORDER PLEDGE OF ALLEGIANCE AGENDA REVIEW OVERSIGHT BOARD SPECIAL MEETING , NOVEMBER 12, 201; AGENDA PAGE 2 COMMUNICATIONS FROM STAFF a. Status of response to Nawied Amin- public comment at the meeting of September 17, 2013. b. Truing up of unfunded health costs. c. Residual in the Redevelopment Property 'Tax Trust Fund. PUBLIC COMMENTS Comments from members of the public are limited to items on the Special Meeting Agenda. MATTERS FOR CONSIDERATION 1. Further discussion of the draft Long Range Property Management Plan. 2. Future Agenda Items. a) Consideration of revenue sharing agreement related to assignment of the Master Commercial Lease at 636 El Camino Real. W'apf�yn Reodica, Deputy Clerk O ersight Board for the Successor Agency to the South San Francisco Redevelopment Agency OVERSX-JiTBOARD SPECIAL MEETING NOVEMBER 12, 2013 AGENDA PAGE 3 III '111I�J� III IN �IillillI IIIIII 111111qqiiii 111111� �_ffl __ -, __ __U • DATE: November 12, 21713 TO: Members of the Oversight Board FROM: Steven T. Mattas, Interim City Manager SUBJECT: Revisions to the Long-Range Property Management Plan (LRPMP) It is recommended that the Oversight Board review proposed revisions to the second draft of the Long-Range Property Management Plan (LRPMP). At a special meeting on October 30, 2013, the Oversight Board reviewed the first draft of the Long - Range Property Management Plan (LRPMP). At the request of the Board, staff has made several revisions to the first draft of LRPMP. In addition, staff reviewed the feasibility of switching the properties listed as numbers 22-26 (the former Ford properties) and numbers 29-31 (properties along Linden Avenue) from the "Retain for Future Development" category to the "Sale" category, Pursuant to the direction of the Board, the following changes are incorporated into the second draft of the LRPMP (see Exhibit A): For the properties designated for public use, upon transfer to the City the grant deeds for the properties will include language restricting the use of the properties to governmental use. If there is a change in the use of the property, the City shall. enter into compensation agreements with the San Mateo County Auditor-Controller or other appropriate entity or entities, pursuant to Assembly Bill xI 26 and Assembly Bill. 1484 (collectively, the "Redevelopment Dissolution Law"), providing that all net revenue from such non-governmental, use shall be distributed as property tax to the taxing entities as defined in the Redevelopment Dissolution Law. In addition, grant deeds to public entities other than the City will include a reversionary interest of the City in the event of the grantees' breach. For the properties retained for future development, the Successor Agency and/or City will merge the contiguous parcels to form a single parcel thereby facilitating the development goals envisioned in the LRPMP and the former Redevelopment Project Plan, A section has been added in the Conclusion of the LRPMP stipulating that the Successor Agency and the City will enter into a revenue sharing agreement whereby the taxing agencies will receive the net proceeds from the sale of all properties the City retains for future development. Staff Report Subject: Revisions to the LRPMP Page 2 With respect to the designation of various properties from the Retention category to the Sale category staff requests that the Board consider the following: The intent of the Redevelopment Dissolution Law appears to provide for the LRPMP as the final and conclusive plan that will determine the future status of all of the properties owned by the former redevelopment agencies. The legislation dictates that all properties fall into one of four categories: Fulfillment of existing obligation, Governmental use, Retain, for Future Development and Sale. The legislation did not authorize the Department ofFinance (DOF) to approve, and DOF has not indicated to date that it is willing to permit, properties to transition between the different categories as subsequent circumstances inay require. Creating ambiguity around the categorization of any property goes contrary to making the LRPMP the final and conclusive disposition plan for all properties. Such ambiguity also raises the possibility that DOF could reject the LRPMP. A delay in LRPMP approval of the LRPMP would hurt the Successor Agency's and the Oversight Board's ability to move forward with sales and development plans. Therefore, staff recommends that the Board make definitive category decisions for each property. The Successor Agency and the City do not object to listing 616, 700 and 905 Linden Avenue under the Sale category in the LRPMP. However, as outlined in the LRPMP revisions, staff recommends that the Board consider leaving the properties in the Retain for Future Development category. Currently there is a similar 7,500 sf, ft. vacant property at the comer of Annour and Linden Avenue being offered for sale (see Exhibit A). This property has been on the market for several years under two different brokers and has failed to attract a buyer. If the LRPMP designates the Linden properties in the Sale category and they fail to sell, such failure will create a long-term liability for the Successor Agency and prevent the expeditious closing of the affairs of the former Redevelopment Agency. Therefor staff recommends that the Board allow the properties to remain in the Retain for Future Development category. 405 Cypress and 315 Airport Blvd, have complexities (size and/or environment contamination) that limit their immediate marketability. Both properties also offer increased development opportunities if a developer is able to purchase adjoining sites to create larger developable parcels (see Exhibit A). The adjacent properties are now identified in the LRPMP. These properties are underutilized and/or vacant. Given these conditions, it is possible that a developer working with the City may be able to acquire the adjoining properties to create larger developable sites. Therefore staff recommends that the Board allow these properties to remain in the Retain for Future Development category, The assembled roperties at 401, 411 and 421 Airport Blvd. offer the greatest potential for immediate p I sale; however, they also present development complexities that will require flexibility and patience. As described in the LRPMP, the assembled properties have a negative residual land value (-$7.2 million) at this time. To date at least two developers have expressed a strong interest in the property. However, initial. discussions with the developers indicate they will need some flexibility in how a purchase and sale agreement is structured in order to develop a project. The City under the authority of the LRPMP will have greater flexibility to negotiate with a developer and enter into potentially complex financial agreements that allow a project to move forward. DOF is not in the business of negotiating purchases and it is uncertain whether DOF has the expertise to understand complex financial transactions. In addition negotiating a purchase and sale agreement through DOF will slow the process tremendously and put the sale and development of a project at risk. Therefore staff Staff Report Subject: Revisions to the LRPMP Page 3 recommends that the Board allow the properties to remain in the Retain for Future Development category. In the event the Board believes any of these properties should be shifted to the Sale Category, staff will make this modification to the LRPMP and indicate that the properties will be sold through a negotiated purchase and sale process similar to what is being proposed for 216 Miller Avenue (see Exhibit A). Under this process, the Successor Agency will gauge developer interest and put the property on the market to solicit proposals from developers. Staff will select the developer that proposes the highest net value to the taxing agencies through a combination of sale proceeds and future tax revenues, The Successor Agency will negotiate a sale price commensurate to the proposed project and this will be outlined in a Negotiated Purchase and Sale Agreement. In order to facilitate the process that will require an upfront investment from a developer, it is possible the Successor Agency will need to enter into an Exclusive Negotiation Agreement (ENA) with the developer prior to finalizing a purchase and sale agreement. It is recommended that the Oversight Board review proposed revisions to the second draft of the Long-Range Property Management Plan (LRPMP). By: Steven T. attar Interim City Manager Attachments: Exhibit A Revised LRPMP pages 2194448.1 Edits to Draft Long Term Property Management Plan (Nov, 6 2013) I ermissible Use Categoir, . Gcwernnaent I)sle y 1- SS9 Gateway Blvd. Boston Properties conveyed this property to the Agency as a condition of development for its project. The property is subject to the Second Amendment to Declaration of Covenants, Conditions and Restrictions for Gateway Center, which Ilimits the uses of this property to: a) the operation of a child day care facility; b) a public library; c) a public office facility as an amenity to the property. The Peninsula Family YMCA operates a childcare facility at the site. The facility is at capacity and given the continued growth of the biotech center, demand for childcares services in the area will only increase. Given the deed restriction and the prevalent use, the property must remain in public, governmental use. 559 Gateway Blvd. L) rap ',i 0 ..j�Ltyjljy �g .I,nMgnta� use as f ' 6� ' vis: -'rh.g.S _IgL�ggth San rry .......... ty. Ra'.2 2L !"u,e r a y of S, I San a 1-12-11 ........... LIgnic ggj r t III J _.ju_r!ps1ciJbe( ExNbit A here aind suss _�s jet rth in that cii . . . . . . .......... .............. . ... e restr�ctio s o�j fr . .............. Seli Afnenidi�neint to Declaraflon of Covien and Rest6cUon fo Gatiew . . . ....... y executed as of May . .......... _. . . ...... . ............ wn the Off icia[ Re f S In Mat r,'Ouq)( as lnstrlirnent No 2003-38245!L_g.!ui !LgEluiorate this referenc as, K ftjV y w �-ljjg�qh . . . ............... . ........ 1,'iere4i, la the everit that Grantee dis It w. ted use or se k to I t .... ......... . . __Slrk, __ 1 , Pra _uLl g2ygELi [0 ?, Giraintee shafl enteir,J,rit a co ri a'y .................. r e. U r Auditoir-C."li-oritrofler air cithher, a r iate ent qi e,F ti ies ..... . ......... _"."'.'_ . . . ..... . .. . .... ........ U IV : ., �� I @Iifl 14,94_.( io� �, , Lill!' L)rr� st'icl'n . ....... SS Ut Orl LL'a ............ 2! N use shafl be d F -�firied in the UJLi:,Aed'a1,L) -I . . . . . . . ... . ...................... E_ I, nent Mssohjton Law. Said Pri y ricflon oin a _2ink �2,md_L_e"��.LIPM LLIZ5 _2 J, . WNch ii nter�id(,�id to coI'isflt1ute, bid ,)th air, .�grvftUdg ar) _g �Q��Dt runnUng W,it d 1�ach a eve ontiracL: id r i �i igl:1�1�iieint hiereafter executied cov . . . .......... L 11,1-- _&.t nut di era ofshah b y nchz'� r ��L . . . . . . . .. .......... � _0 vie .L—L a n —d Wsyytmimn e4 ............ . . . ......... cover�ant is s('I forth IiIi such co 1 iract d1E,ei er ...... doroth instruinent, Sa�d coveiiraii'it s�haH be bindj ?Li n hL 2 _L& L L -and 2n'±2±_SU_Cr( Edits to Draft Long Term Property Management Pion (Nov, 6 2013) 13-44. 472 Grand Aventie/3106 Spruce Avenue and 468 Miller AVEmue San Mateo (",'ounty ffealtti Center These properties (472 Grand Avenue/3,06 Spruce Avenue/) contain the Health Center operated by San Mateo County and ancillary parking (468 Miller Avenue). The Health Center is a primary care medical facility providing services for low-income residents in the downtown area. Given the importance of the Health Center to the area residents and the Center's need for additional space to provide supplemental services, the Successor Agency recommends that this property be transferred to the County of San Mateo. The transfer of the property to San Mateo County would be conditional to retaining the Health, Center at this location, and would revert to the City in the event the County elected to close the Health Center. If San Mateo County declines to take ownership of the property, the City will retain ownership of the properties and continue using theme for a public use. L)qLi transfeir of the. IPL�j rd wfllj,nclude iw air lius e of r i �ta� use ps foflows- "The Sue"qC!ssgf',Agg!j�y 'y SpI.Ith San Frandsco Rmyf)r v wl nymiyl«ro n nftu ic r tYar ts to fl,we Cour _', of San Mateo p2!w San ........ . . . .... . ....... WbdMs�oin of the State of Cakfornii LcLr . ..................... entityLC�g.E��g( , a tMe and �rrtei� est Grantc)r has fin the Prop.g.[jV,ZLs or Jfic L�,escrflbed rn 5 e ........ . . ........... "I',"",',," ........... . . . ..... pgj in Bd,�iNt A 1,i� rrd i 1119 n s e restriction on,,L9 e Ero, rn rn �en ta . ... . ..... . . � Fh e ............ I ------ purp!2° ,. �n the event th�at Grantee breaches this covenarit and diganUml IS a ()vel'r'�jir'r'leinta ILI,.SiC�,L)�' ___ ............. . .... ............................... .......... seeks to use the Pro �! , 0 -Rglty�, lAif itjj�.[�Lgly . 1are the forfeiture of ttiat , OL 21 1 L, QlLe Lt Y.1 n _ct l Y-ALLS, r!L tat.pgqion of Le-enter and tak pni of t i 2 �sessk 2 pgrty as to o ,eri deciareid and Fle ent s�,,vaU have ieefU,�.ff j, I n 2 !12re shaU have bip �y that evenL t Sh k _!Lq!An ee iises gir i�ItEmds, to �jse ti-iie p . ...................... ...--,.,,--..,...-.--L�-pg--,�L-�Lc)LgLIY Dgl]:&)_YP29]�!jj��usg, .�_.r aRt,ee, eriteirjnti, co rj��al�io I Mateo Co�,,jnt A�jd�to��,,�,,Clcj�iritro �ler or, othier _Qj_wfth the San ... _��__ K ..... .. . .. . ..... . ...... . .. . ....... . .. . J J . . . . I ............... ........ . .................. . ..... . .... . ..... pL)Eg2E ts enbty. 2E,,g,,njftieSL_P! x1 2.6 and A s rn y I �e "I'l""I'll""I'll11.11,111,111,111,111,ll'-��"--� s el aill,�, �4 q[[gg S1 - "[,Iedevell uiru eat Mssoluflqn Lay�J.L3rqyLc ivf t. tjZjt j[ net, revenue frorn such nigin.- use shialii ... .. . ..... . . be d strib,kjteid au�Lgj2gijy _s..,defiried 41 the Riedewflanj�Lrtj, )��ssoVt�on Law . ..... ..... . ................ ------- .............. 5,gid P11"Or �s he�d and inereafter shafl .�ejhe[d, 2!-? e LJ useld and.accu ed coveinian't to fl"�e afpiresaW riestrictioin on usle and thie aforesa�d of Gra ntg', iyLi ch aiire hntenided to constitute_b Oth e e servitudes _-.111 _I I'�--,--�,,�,�.,--��.,-,��..'�.�1.1-1-.�I.I..",".,..,-.,,.,,.'ll1l.111,1111,'ll"�'ll""�,�1-11,111,111,111,111-1'll,. - .- - _ ................. . . - ...... . . . .. ........ - nd covenants n,ii rfl a nd ever ,o i rac deed or gtfuer unstrurnient heireafter a. ....... ... y2jth the Wid E ch a . . . . . . . . ............ .. .......... _y exeicuted o ey _LE).g tbg thereof shafl Iloe 1'n61rl Isom IllrsiveLy_jf) g [,'eien exeguted defivier ...id ijLd ac le subifIct, tp, such, covenaLLt,, �!,ffless whether _ ^ uch coitenarft tls --m_L _ ___ _ ga _ . - 0 Edits to Draft Long Term Property Management Plan (Nov, 6 201 3) set forth �n such c -ed lo r, othe�, � �il 'n. 1- , t, 1 a d -i�e . . . . ....... n'l e r � S i s i nid covenarl� ��,,a �e bi on iid on tkaehr sii.jcessoanc a. s U fii thip eveirut the lcouiit Matein does not agCE� � le _.p ...... ..... --l-, . --!-! . ......... Itt -JEM ffm W Lh.pQjyjcjrp��j �cusleanda t �U e Iflo o vv �' -" ii , lmg jirilc[u,�Jedjn_t t idleed, "The Successc,�r - .1-1.1 I'll ...... ...... . . ........................ 0 �' t G t LA gf.South S,an wdsco Redeve ta � Fdoj rnulljlp]Lcor n --- jr[ IL 'it e a, j G d aMerlest Graiitioill' [ias �n the Pr )1'lt �ca� i � I . . . ............ 91-!k�.c _Hb ec f jY�, E h lQ .D ... E. 1 .......... the LHomfing r(-istlfiction cm use ........... r,bn e,,EL21)PL 'agy �!Rygnla m,211;Luplose, Vrl the evera twat Grantee cfislcoiiit�niues a use or seOks to use the Pr ... . . ..................... op,� ty jEj ffer n iLg e LIlLi ri, Grantee shaH eir�teii- into a nmiq.,ns 1,2,2 a o �,i ri --Clolntirofler ............ ................................. . ........ .. tj�e Sall �A te C i � g(Ifitaii ............................. . . al t l ljl U t _yjtfll xl 216 anid Assf rla )p � B�H,1�118 r-c HtgJIV . . .... .. . .................. . ....... the "RedeviOWnerl't Mssohitiion Law -t C2 v Eg! wino L[��jj f -[nn:&QM12.Mgntal usle shaH be dasV�bljted asjj[qpg!ty "P m j iied �n,thle Redeve lmylt� �! twill SSILdufloll ............... gn i _(2. — taw, Said Pr e j is heki and riereaftershaH be h u. . . . ....... I'll, ...... . ... . . . - Le A, A±,,gjg cate�d, �� h �e L �.,p!Le d a qLl t� to the afi- re saki rest ft � n isle whik i ns nniteinded to constitutle blot.h.a (.jliftaWle servitiude and a covenarit rune an w h Vie Wind. Each a nd ............ ,gy�Ly 'q PLQ L") Luly-!�L�Lrw gther fiistrumerft [lieveafter exe cor ........ . ........ Jon thereof shale be h6d conclQs ......... . . . . . ................................... bqgn ex-egti,t.e-d deHve,u ej Lg d L�e rte . ........... .................. .... �gy.rLnrant.jggarddess wheft� ]S sft forth �n such ccyltra( _'�Iderg�gLothc�.�, instaffnent,, Sauld .................. c.ove,rla.i-q,,s,h2H be b i,n,! fl" -...12�rt e s their suc cessoll ' an� -"'- . ................. A a Edits to Draft Long Term Property Management Pion (Nov, 6 2013) i �Cff el' I"i IVI � for governmental use purposes (Nos. 4, 5, 9, 10, 11, 12, 13, and 14) 9. 480 North Canal This property is used for Fire Station 61. An engine company (Engine 61), ambulance (Rescue 61), Type L-2f int deed vvNl � i lu riggg,&P, fgjj.,[�Ct�on the use of the �g d e a ewruwrusu'Lµt as, foflipws, "I he Success c t th (J cesso�rA en.-Y-12-It . .... . . . . . . . !ilil !2 Sain, Frairyjscio RedevdroVNuiiio-umwu apulin C n t xFthe :lit cyi: "eut San V anq'usco a in U IJI�C' [LaLc —or -)ii, has in the Pr1c),Mly,.g� �t�crjbed, q ELd irate te rest G ra nti ...... . ........ LngLLe a y �n EY,flWt A heret fo n -nd -M � —tln the ntee Nhiscointinkies a,oygii nnlenta� Use or M! for, a differien LA n o r Ni seeks Liu use the Prcx3f Y--.E�� reeirnent . ..... _rpose, Grante ILg rrL Lj.-t--a Yviflrfl'�ie San �Aateo C )i - 1, d ��t o rjCL) �jt ro ��, [e r r o t h e r a p p Eg p a tg, e nt � tKpLL? n ti t ips . u r s u a a Lt t p .111, . ....... .. .-LL�H) --- &ssiembjY--M..A.2 30AAOS 14,84 c�L _P Uf L 2!aL.@1 uiet reverwe shafl be dMributed as 'Pe ..... ........ ...... Q'EQj diefined �n the RedevejL)p die fine _u jjg_Lt,.Jl lil s:�okjto gn Law, Sa L(_ E, iue0ci iiNSd hereafter 2"E' 2�"!;��J'q e .......... 'ft to S g gIA), covenaint to the afairesaki restdcflorr on iuse is kAerided tO C.0r)ShtUte both ari .Mft servitudg ... . . ..... ....... and a coven ar,ot rurink' with the Wid, Each and eve y..�2!2Lr�kgj, . . ............................................................... _4,2,,ed gir �:A�her 415trUlryiient ' �i ' ereafter executed the r e .,oE_LjyjMqLon tiereof shall be h6d concWsiveB y e _!g t)gyl- �IDeen executed ilµieHvered Arid aczgpt,e ub eqj tio suqh cove� an ..re � rd ess vwhether SUch covenarrt Vs j �s . ........ . 'U-I& 11-1�'ll'irliLl.1111-�-111- - - - — I - — serfoirth in such cigntr-act, deed or other instrt,mierft, Sak.J covenant shall be tJnw oin fl,e . .11-11-1---.. "II.Il.11,1111,�,,�'�'ll�,!�� l'.1�"i.I.L�,g-.--..,-,,.-]�,,,.,_i ?? j en t,t :etr and q p�irs aind i 5, ,)I heIr success� . 'a F ....................................... . J Y 4 Edits to Draft Long Term Property Mar) agement Plan (Nov, 6 2013) Permissible Use Categor ale Downtown Centr,ad F'roject Area 32. 432 Baden Avert e /429 Third Lane This property was acquired for the development of a public parking lot to serve the 400 block of Grand Avenue. However, with the development of the Miller Avenue Parking Garage and the passageway connection to Grand Avenue, this parking lot is not as critical a parking resource to this section of the downtown as it once was, Under current zoning the property can be developed into four residential units and its residual land value is almost zero (-$40,000) meaning a developer will likely find it profitable to purchase the property and develop it. Upon adoption of the DSAP, the property will have the potential to hold up to 12 units, significantly increasing the property's value. The property's residual land value upon adoption of the DSAP will be $880,000, making it very profitable for a future developer, jh9.2L0P(Lj1 x-yLt Llb�soldjt9�Lqpgh a rar, Lot Lat�Ld pgrehaseAttd 'cat 'Fhq SmAg ale a q!A , so Licit aro hi ie,�LnetygLtwto the 2mwtut kml o-p—ers qn-Lq!p�kgt —aie oLK,�,IqpgtL that pro Lh jag gjY&Ltcj es jbK9g&1L4- gombinat LO-R)f 59ke - ro qd5 n future 14N..ELY—ej—lue s. Lhc-5-Ljc—c(is:igLAgenc y,,.wilI !IWLiq tea sale -p��5_urate to thqprQ,p sed 'gq.and Will OUtfine (fie terms i 9---Rrjo . Purchase and Sale Agreement, In order,to-facilhate the .41e ro.qg .-.5 -j— -s&k Cdr p—ossi�le t Virtu ��s�or A c ic will enter into an Exclusive Neg-otiation Ile purchase oCt lie-p Thw LL))o tijght Bo: �ard will 'it) unitive both an EN a a lrnarl trchasean Sad Q on, Financial Benefit to Taxing Agencies It is estimated the property is currently worth approximately $560,000 based on recent estimates, of undeveloped land in the downtown, area ($80/ sq. ft.). If the buyer waits to develop the property until the adoption of the DSAP ' the taxing agencies will be better off in the long run by having the Successor Agency sell the property immediately. As summarized below and shown in more detail in Appendix C and Table 1, the net financial benefit to the taxing agencies would be approximately $607,000 more (in present value) over a 20 year period. Table 1 61 Nominal Present Value of Cash (Flows Cash Flows Sell Option $2,216,000 $1,721,000 Retain for Development Option $1,641,000 $1,113,000 61 OiM too M 610 l! I I I <n ~. Edits to Draft Long Term Property Management Plan (Nov, 6 2013) However, if the buyer develops the property immediately under current zoning, the taxing agencies would be slightly better off having the City hold the property for future development. Assummarized below, and show ln more detail in Appendix C and Table 2' the net financial loss kz the taxing agencies vvuu|d be approximately $15O,00] (in present value) over a2O year period. Table $1,200,00 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 Given the small benefit of retaining the property for future development, the Successor Agency recommends selling this property immediately. It should be noted that the main reason this property is suitable for disposition is that it ioe stand-alone property that does not affect the development potential or the value of other Successor Agency properties. The Successor Agency believes that the property is environmentally clean and that the adoption of the DSAP will not substantially affect development schedule or the financial benefit to the taxing agencies. N1 Nominal Present Value of Cash Flows Cash Flows Sell Option $1,126,000 $963,000 Retain for $1,641,000 $1,113,000 Development Ootion $1,200,00 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 Given the small benefit of retaining the property for future development, the Successor Agency recommends selling this property immediately. It should be noted that the main reason this property is suitable for disposition is that it ioe stand-alone property that does not affect the development potential or the value of other Successor Agency properties. The Successor Agency believes that the property is environmentally clean and that the adoption of the DSAP will not substantially affect development schedule or the financial benefit to the taxing agencies. N1 Edits to Droft Long Term Property Monogement Plan (Nov, 6 2,013) 27 21.6 Miller Avenue (foriner Ford site) The Agency acquired this property to ensure the development of high quality housing in the downtown project area,. It is an important component of the City's and former Agency's efforts to create a vibrant, transit-oriented and diverse downtown. Development of this property will provide transit supported housing and easy connectivity to the downtown South San Francisco Caltrain station. Under current zoning the property can be developed into 25 residential units and its residual land value is almost $120,0001, meaning a developer will likely find it profitable to purchase the property and develop it. Upon adoption of the DSAP, the property will have the potential to be developed into 50 units, significantly increasing the property's value. The property's residual land value upon adoption of the DSAP willl be $6.1 million, meaning this project would move, forward without any City or Successor Agency involvement. The project should be very profitable for a future developer. _pM will be sold hroul a .,_qpggjia.ic dsircha.se.. and sale agrL eni, - q!E__ �ic_jt PLo_PL)s_a]sfr(Yrn_AeKq_t9mns and select the .d �(jj�qp�L,5c to the to in 1�Ltkel� he�gnetyAljLe - !2L_ _ 9 Agt!jgki "tirou comb i nation of sale p -uture tax revenues. 1 1 W(� E ceeds and f nLgzgftE-Lt!.Adale rie cortiri'iensLit-ate to the o,)osq�taMr Lect and t I We the terms in A _ ta ec1 Purchase and Sale AgrqgLnpB1,.. In order to facilitate he s "I A ..L— e recess. �os�ible the Success,o— ggtju will enter into an Exclusive _N(.,-rotrialic—)ILA NA1_vL1t1LLhe �LeyejqRer wilLIel oil the pnrq g gf j and a f imfl I'Llf-Charlse and Sale Financial Benefit to Taxing Agencies It is estimated the property is currently worth approximately $1.4 million based on recent estimates of undeveloped land in the downtown area ($80/ sq. ft.). If the buyer waits to develop the property until the adoption of the DSAP, the taxing agencies will be better off in the long run by having the Successor Agency sell the property immediately. As summarized below, and shown, in more detail in Appendix C and Table 3, the net financial benefit to the taxing agencies would be approximately $1.6 million more (in present valuie) over a 20 year period. If the buyer develops the property immediately under current zoning instead of waiting for the DSAP, the taxing agencies would reap the same financial benefit in the long run. Table 3 Given that the taxing agencies will reap the same financial benefit by retaining the property for future development or selling it immediately, the Successor Agency recornimends selling this property. It should be noted that the main reason this property is suitable for disposition is that it is a, stand-alone property that does not affect the development potential or the value of other Successor Agency properties. The Successor Agency believes that the property is environmentally clean and that the adoption of the DSAP will not substantially affect the financial benefit to the taxing agencies, Nominal Present Value of Cash Flows Cash Flows Sell Option $6,968,000 $5,259,000 Retain for Development Option $5,480,000 $3,665,000 Given that the taxing agencies will reap the same financial benefit by retaining the property for future development or selling it immediately, the Successor Agency recornimends selling this property. It should be noted that the main reason this property is suitable for disposition is that it is a, stand-alone property that does not affect the development potential or the value of other Successor Agency properties. The Successor Agency believes that the property is environmentally clean and that the adoption of the DSAP will not substantially affect the financial benefit to the taxing agencies, Edits to Draft Long Term Property Management Plan (Nov, 6 2013) Rermissible Use Category: Approved Redevelop lent Project Plan 22. 3 15 Airport Blvd. 315 Airport Blvd, is the first property visible to drivers exiting southbound Highway 101. it also has strong visibility to drivers continuing along Highway 101. The property is an important component of the City's and the former Agency's efforts to create a vibrant, transit- oriented and diverse downtown. Development of this property will provide transit supported housing and easy connectivity to the downtown South San Francisco Caltrain station. Site Description This 22,136 sq. ft. (0.51 acre) property is ideal for a major transit oriented development. The Successor Agency worked with a consultant to estimate the development potential of the site. The development consultant estimates that under current conditions the site could accommodate 29 residential units and 9,000 sq. ft. of retail space. Upon adoption of the DSAP, the residential development potential of the sites increases to 58 units and 9,000 sq. ft. of retail space. 305 Airport 309 Airport 315 Airport Vacant, former automotive store SRO hotel (Partial view) R C0 j 315 Airport 315 1 AhE 309 Air r P t 3D5 Air a rt G a is v (D , , 305 Airport 309 Airport 315 Airport Vacant, former automotive store SRO hotel (Partial view) R Edits to Draft Long Term Property Management Plan (Nov, 6 2013) Under present conditions (including poor condition mf building, allowable uses and development challenges), the Successor Agency believes the property at 315 Airport Blvd. would be difficult tosell. Nevertheless, a land speculator may be interested impurchaisimg the property ata discounted price and holding i1for development or reselling it to a developer in the future., It is estimated that the property would sell at between $1.8and $2.1 million. if sold, it is likely that the, property will remain undeveloped for amextended period of time, thus eliminating the near term possibility mfdeveloping a high density housing development that would fulfill the Redevelopment Plan, region and State goals of developing transit oriented housing. Financial Benefit to Taxing Agencies Although the taxing agencies may receive a benefit from the sale of 315 Airport Blvd., in the long run the taxing agencies would receive greater benefit im the form mf property taxes generated 6vanew development if the City is able to advance the development of site. As summarized below and shown in more detail im Appendix C and Table 7, the net financial benefit %o the taxing agencies would bealmost $2.] million more (in present value) over a 2O year period. With a development estimated tmbe completed in2O16/17, the brea�hevem point for the taxing agencies would occur im approximately I1 years (2024/25). Table $5,000,000 $4,500,000 $4,000,,000 $3,500,000 $3'QQO,QQ8 $2,500,0100 $2,000,000 $1^5OO'8QO $1,000,000 $�SOQ,pOO $0 ZN 60> IZIP 61t, Nominal Present Value of Cash Flows Cash, Flows Sell Option $2,68,000 $2,470,000 Retain for $6,873,000 $,4,731,000 $5,000,000 $4,500,000 $4,000,,000 $3,500,000 $3'QQO,QQ8 $2,500,0100 $2,000,000 $1^5OO'8QO $1,000,000 $�SOQ,pOO $0 ZN 60> IZIP 61t, Edits tm Draft Long Term Property Management Plan (Nov, 6 2013) 23-25. 401,411 and 421 Airport BIvd, 400 Block Airport Blvd. Land Assemblage Consisting of 1.06 acres, the properties on the 400 block represent the single largest development opportunity in downtown South San Francisco. The properties have strong visibility to drivers continuing along Highway 1Q1. The property isanimportant component of the City's and the former Agency's efforts tm create avibraint,transit-oriented and diverse downtown, Development mf this property will, provide transit supported housing and easy connectivity to the downtown South Sa:n Francisco Cailtrain station. Site Description This 48,U43 sq. ft. (1.06 acre) property is ideal for a major [email protected] Agency worked with a consultant to estimate the development potential of the site. The development consultant estimates that under current conditions the site could accommodate 81 residential units and 8,000 sq. ft. of retail space. Upon adoption of the DSAP, the, residential development potential of the sites increases to 162 units and 8,000 sq. ft. of retail space. Under present conditions (including the reduced number of residential units), the Successor Agency believes the property at 411 Airport Blvd. has the potential to be sold on its own for approximately $1 million. Uf41l Airport Blvd. io sold on its own, itis unlikely the remaining unimproved properties would sell for am extended period oftime. |tis possible a land speculator may be interested inpurchasing the entire property ete discounted price and holding for it development mr reselling ittoa developer imthe future. Because of its reduced development potential, it is estimated that the residual land value of the 400 block of Airport Blvd. is negative (-$7.2rniHion). However, with the adoption of the DSAP and the increased development and desirability ef the area as a result of its full transition into a full TODarea, the property will experience anincrease in residual land value to $3 million. NOTE TO BOARD — The proposed parcel merger language above will appear for a;ll of the properties assembled for the purpose of development (Nos. 15-18, 19-21 and 23-25). Financial Benefit toTaxing Agencies Although the taxing agencies may receive abenefit from the sale of411 Airport 8lvd.,nr the potential sale of the entire site to speculative buyer, in the long run, the taxing agencies would receive a greater benefit in the form of property taxes generated by a new development if the City is able to advance the development of site. As summarized below and shown in more detail in Appendix C and Table 8, the net financial benefit to the taxing agencies would be approximately $12.3 million more (in present value) over a 20 year period. With a development estimated to be completed in 2016/17, the breakeven point for the taxing agencies would occur in approximately 8 years, (ZQ21/22). IMI Edits to Draft Long Term Property Management Plan (Nov, 6 2013 IV IV IV T IV IV IV PV sale —PVDev(B,ase) PV Dev (DSMP) Wl Table 8 Nominal Present Value of Cash Flows Cash Flows Sell Option $4,811,000 $4,313_000 Retain for Development Option $17,836,000 $12,277,000 $14,000,000 - ------ $12,000,000 $10,000,000 $8,000,000 . ... ..... $6,000,000 — ----- - ----- --- $4,000,000 $2,000,000 - $0 IV IV IV T IV IV IV PV sale —PVDev(B,ase) PV Dev (DSMP) Wl Edits to Draft Long Term Property Management Plan (Nov, 6 2013) 2& 405 Cypy,ess Avenue Consisting of8,763 sq. ft,405 Cypress Avenue has e moderate development opportunity. Nevertheless, coupled with other properties being developed in the area, this property hais the potential to be developed according to the former Agency's plan, Development of this property will provide transit supported housing and easy connectivity tm the downtown South San FramdscoCa|tneim station. This 8,762 sq. ft, (0.2 acre) property has the potential to be a transit oriented development. The Successor Agency worked with a consultant to estimate the development potential of the site, The development consultant estimates thiait under current conditions the s,ite could accommodate 14 residential units. Ulpon adoption of the DSAP, the residential development potentia,l of the sites increases tn28units. Figure C Figure D zu*mnnr Under present conditions (including the reduced number of residential units), the Successor Agency believes the property has little sales potential. |tis unlikely that a developer mr land speculator would be interested in this property until all major sites inthe downtown are developed. Because of its reduced development potential, it is estimated that the residual land value of the 40S Cypress Avenue is n ('$1.2mi0ion). However, with the adoption of the DSAPan� the increased development and desirability of the area asa result mf its full transition into a full TOD area, the property will experience amincrease in residual land value to$65O,O0O. AA p gg\Lg1q2er.LqgLd.achieve econornies of sca�le and build a larger Pf'ori ct that wouId result in a h residual land value and a RrEtg�ter bqnefYtjg the ta�ja- Mt.(I�ies e OM Uri. im o _ 14 314 L�f 415 CYP Y, ° uu -~'—'~`' ` A' zu*mnnr Under present conditions (including the reduced number of residential units), the Successor Agency believes the property has little sales potential. |tis unlikely that a developer mr land speculator would be interested in this property until all major sites inthe downtown are developed. Because of its reduced development potential, it is estimated that the residual land value of the 40S Cypress Avenue is n ('$1.2mi0ion). However, with the adoption of the DSAPan� the increased development and desirability of the area asa result mf its full transition into a full TOD area, the property will experience amincrease in residual land value to$65O,O0O. AA p gg\Lg1q2er.LqgLd.achieve econornies of sca�le and build a larger Pf'ori ct that wouId result in a h residual land value and a RrEtg�ter bqnefYtjg the ta�ja- Mt.(I�ies e OM Uri. im Edits tnDraft Long Term Property Management Plon (Nov, 6 2013) Financial Benefit to Taxing Agencies In the shOrt- to medium term, it is unlikely the taxing agencies, will receive any benefit from the sale of 405 Cypress Avenue, The greatest potential for this site isifitis bundled with properties on the 4UO Block of Airport Blvd, and iadeveloped as part of that project. AssumnmmarizedbeUow(and shown inmore detail im Appendix C and Table 9, the net financial benefit tm the taxing agencies of having the City hold the property for development would be approximately $1.2 million more (in �resent value) over a 20 year period. With a development estimated to be completed in, 2018/197, the breakeven point for the taxing agencies would occur im approximately 10 years (2O21/22). MeM, Norn�nal I Present Value of Cash Flows Cash Flows Sel:l Option $893,000 $845,000 Retain for $3,094,000 $2,070,000 Development Option $2�OQ0O0 $2,000,000 $1'S00,OQQ $1,UDO'QQO $500,000 $0 T T lip IV �PVSm|e —,,,,,,PVDmv(8ase) - , PVOev (DS [WP) ix Edits to Draft Long Term Property Management Plain /Nnv,6JQ13/ 29. 905 Unden Avenue The highest and best use ofthe property bto hold and combine it with adjacent properties tnconstruct a high density residential project im the future. The property is 1 mile away from the downtown's transit hub but nevertheless has the potential to be a development site in the future as development sites around the downtown core become scarcer, Site Description This 15,000 sq. ft. (0.34 acre) property has the potential to be developed on its own despite having better prospects if assembled with adiacent private properties. The Successor Agency worked with a consultant to estimate the development potential of the site, The development consultant estimates that under current conditions the site could accommodate 11 residential units. Although this site is outside of the DSAP area it will still benefit from DSAP adoption as the desirability of the area will grow over time. Ll� ram manwounmwDEw South San Francisco, 94080 == If sold in the future, itis estimated that the property would sell for approximately $900,000 if sold with all land remedia,tion completed, The property would have to be discounted by $100,,000 to $200,000 if Edits to Draft Long Term Property Management Plan (Nov, 6 2013) sold without remediatiom. Even if sold, itis likely the property will remain undeveloped for an extended period of time, thus eliminating the near term possibility of developing ahiigh density housing development that would fulfill the Redevelopment Plan's goal nf developing housing, Because of current market conditions, bisestimated that the residual land value of9O5 Linden Avenue ism (-$310�000). However, with increased' development in the downtown area, the property will likely experience ain increase in residual land value in the future. Because it is a chalilenging development site, the likely value vxN| be $880,000 (a�mmmmUn8the site has been memediated of all environmental Financial Benefit tuTaxing Agencies The taxing agencies are not likely to see any, financial benefits from these properties in the short or nnediunm —term.VVhethertheSuccessorAgenoyattemnpts toseU immediately nr the properties are transferred to the City for future development, the properties wifl, sit unsold and undeveloped for years, As summarized below, and shown in more detail in Appendix C and Table 10, the taxiing agencies are not going tn derive a benefit from this property for years. Given the properties' environmental condition (and the liability for remediation> and their challenging development potential, it would bebest to transfer this property to the City to hold, remediate and manage until market conditions have changed dmsnmedcaUy. Table 10 $1,000,000 $900,000 $800,000 $7OU'QBD $600,000 $�5UO,QQO $400,000 $300,000 $200,000 $100,000 $O IV IV IV IV IV IV WV Nominal Present Value of Cash Flows Cash Flows Sell Option (Sold in 2019/20) $1,059,000 $861,000 Retain for $1,070,000 $696,000 Develooment Cotion $1,000,000 $900,000 $800,000 $7OU'QBD $600,000 $�5UO,QQO $400,000 $300,000 $200,000 $100,000 $O IV IV IV IV IV IV WV Edits to Draft Long Term Property Management Plan (Nov, 62O23) 30~30. 616 and 700 Linden Avenue 616-70Q Linden Avenue Assemblage The highest and best use of this property is to hold it until market conditions are such that a high density residential development can be built in the future. The sites are too small to make a project economically fea!sible at this time and they have petroleum compound: contamination in the ground and groundwater. Despite these difficulties, in the future these properties will serve well as transit oriented housing because of their proximity to the downtown's transit hub and the Caltrain station. Site Description Each property is 14,387 sq.�. (0.33 acres) fora total of 0.67 acres. |t would bechallenging to develop each nf these properties individually but combined they can be suitable for development in the future. The Successor Agency worked with m consultant tm estimate the development potential of the sites. The development consultant estimates that under current conditions the sites could accommodate 40 residential units. Although this site is outside Vf the DSAP area it will still benefit from DSAp adoption am the desirability of the area will grow over time. Financial Benefit te Taxing Agencies Under present conditions (including environmental conditions and development dhalkengey),, the Successor Agency believes the properties at 616 and 700 Linden would be difficult to sell. If sold in the future, it is estimated that the property would sell for approximately $1,1 million each if completely remediated. Without remediation, the properties are worth substantially less. Given the environmental condition and the development challenges, the properties would sell for as little as half their estimated future value. Even if sold today, it is likely the properties would remain undeveloped for an extended period of time, thus eliminating the near term possibility of developing ahigh density housing that vxuw8d fulfill the Redevelopment Phan'mgoa|s. Because of current market conditions, it estimated that the residual land value mf905 Linden Avenue is negative (-$2.3 million), Even with increased future development in the downtown that would drive property values up, the residual land value if these Properties would nerna|m negative /-$480,0UQi An all likelihood, the City would need to hold these properties undeveloped for am extended period oftime. Financial Benefit to Taxing Agencies The taxing agencies are not 0k�y to see any financial benefits from these properties in the short or medium —temn.VVhethertheSmccessorAgemcyattempt to sell immediately mr the properties aine transferred to the City for future development, the properties will sit unsold and undeveloped for years. As summarized below, and shown |m more detail io Appendix C and Table 11, the taxing agencies are not going to derive a benefit from this property for years. Given the properties' environmental condition 16 Edits to Draft Long Term Property Management Pion (Nov, 6 2013) (and the liability for remediation) and their challenging development potential, it would be best to transfer this property to the City to hold, remediate and manage until market conditions have changed dramatically. As summarized below, and shown in more detail in Appendix C and Table 11, the net financial benefit to the taxing agencies of having the City hold the property for development would be approximately $111,257 more (in present value) over a 20 year period. With a development estimated to be completed in 2020/21, the breakeven point for the taxing agencies would occur in approximately 19 years (2032/33)1. 94r, I 1 10 0 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 6b T —PV Sale PV Dev (DSMP) 17 Nominal Present Valued Cash Flows Flows Sell Option (Sold in 2019/20) $1,318,000 —Cash $1,,072,,000 Retain for Development option $1,821,000 $1,183,000 94r, I 1 10 0 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 6b T —PV Sale PV Dev (DSMP) 17 Edits to Draft Long Term Property Management Plan (Nov, 6 2013) IMMINEW11 In summary and for the reasons set forth above, this LRPMP directs that each property be used or sold for a project identified in the approved Redevelopment Plan in accordance with Health and Safety Code Section 34191.5(c)(2)(A). Upon approval of this LRPMP, the properties will transfer from the Community Redevelopment Property Trust Fund to the City, subject to the terms of this LRPMP. The Successor Agency is authorized and directed to take all actions necessary to cause such transfer of each Property to the City and to take all necessary steps to carry out goals and objectives of the LRPMP, To carry out the goals and objectives of the LRPMP the City will take the following steps: Designadoin ofland as ii riot "surplus proper ty" Because the City is obligated to dispose, of the properties in accordance with this LRPMP and to satisfy goals, objectives and purposes of the Redevelopment Plan and the Redevelopment Dissolution Statutes, the properties are not "surplus" property of the City and are not subject to the disposition requirements and procedures of the Surplus Lands Act (Government Code Section 54220 et seq. ). Instead, disposition of the properties in accordance with this LRPMP and to satisfy goals, objectives and purposes of the Redevelopment Plan and the Redevelopment Dissolution Statutes constitutes a "common benefit" that may take place, under authority of Government Code Section 37350 and/or other disposition authority deemed appropriate by the City. The provisions of the California Environmental Quality Act and Government Code Section 65402(a) regarding General Plan conformance will apply to the disposition of each property. Guidefi n,es for t: t. IDevelopment of Properties Upon the transfer of properties pursuant to this LRPMP, and pursuant to the Redevelopment Dissolution Law,_&ta4oe-s, the City will use a number of methods and procedures to advance the development of the properties to their full potential. The methods and procedures the City uses will depend on the marketability, financial feasibility, accessibility, condition and complexity of the properties. These methods will include, but not be limited, to: • Request for Qualifications (RFQ) —to identify prospective developers • Request for Proposals (RFP) — to obtain, bids for development projects • Exclusive Negotiating Rights Agreements (ENRA) —to negotiate with specific developers on properties posing significant development challenges 6 Disposition and Development Agreements (DDA) — to dispose of land pursuant a development agreement Cooperation Agreements — to include the City's participation in the development of properties posing significant development challenges that necessitate public participation in order to advance the development of the property or a public goal such as (but not limited to) affordable housing - !he widelines mJ!1 ap o tl� . �)ro eLt�es retained for future deve�opment and the rqpeLtj s �LvLftt _L _jg1y_Lt _p _p_ _ deygiopn)gDLpoLenti or i.e, L 432 Baden Avenue and 216 Miller Avenue 4�l in the Sale cg�� IV Edits to Draft Lon Term Property Management P'lan (Nov, 6 2013) Use of'Sales Proceeds The proceeds received from the sale of the LRPMP Properties,, if any, are anticipated tobeprogrammed 10 advance the development of the properties in accordance with the Redevelopment Plan and the Redevelopment Dissolution Statutes goal of creating Transit Oriented Development. Proceeds if any will be used! for the foNovvim8purposes: • Emvinomnmenta|renmediatiomofcontaroimatedproperbes —fVr exampka several properties have environmental contamination that must be removed prior to being suitable for residential development or public use. • Development of infrastructure that enhances the development potential of properties — for �exarmp1e,im order to make possible and maximize the development of the former PUC properties, it will be necessary to complete construction of the Oak Avenue Extension. • Cooperation agreements with developers tg facilitate the devm|Vpnmentafproperties —for exammp|e,tbeCitVvwQUincorpora1ethmimdus}onofaffhrdabUehousimgvvitNnapropoaedmnarket rate development, or on, a selected site, to provide the minimum; required num,ber of afforclable units under uf the former Redevelopment Plans, � Relocation —for example, relocate businesses in Age,ncy owned properties to facilitate � Improvements to Public Use properties imthe LRPMPdhat advance the goals mfthe Redevelopment Dissolution Statutes such as TOD and the former Redevelopment Plans —for example, make repairs tm the County Health Center's (472 Grand Avenue) infrastructure and! systemis or establish a capital reserve prior to its transfer to the County of San Mateo. Appendices 21944611 19