Loading...
HomeMy WebLinkAbout2016-11-07 e-packet@730Monday, November 7, 2016 7:30 PM City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA Municipal Services Building, Council Chambers 33 Arroyo Drive, South San Francisco, CA Joint Special Meeting City Council and Successor Agency Special Meeting Agenda November 7, 2016Joint Special Meeting City Council and Successor Agency Special Meeting Agenda NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of California, the City Council of the City of South San Francisco will hold a Joint Special Meeting of the City Council and Successor Agency on Monday, November 7, 2016, at 7:30 p.m., in the City Council Chambers, Municipal Services Building, 33 Arroyo Drive, South San Francisco, California. Purpose of the meeting: Call to Order. Roll Call. Agenda Review. Public Comments - comments are limited to items on the Special Meeting Agenda. ADMINISTRATIVE BUSINESS Report regarding Resolution Approving an Exclusive Negotiating Rights Agreement (ENRA) between the South San Francisco Successor Agency, the City of South San Francisco and Hisense Real Estate (USA), LLC for the properties located at 200 Linden, 212 Baden, and 216 Baden Avenue (APNs 012334130, 012334160, 012334030 and 012334040). (Ron Gerber, Economic Development and Housing Manager) 1. Resolution Approving an Exclusive Negotiating Rights Agreement (ENRA) between the South San Francisco Successor Agency, the City of South San Francisco and Hisense Real Estate (USA) LLC for the properties located at 200 Linden, 212 and 216 Baden Avenue (APNs 012334130, 012334160, 012334030 and 012334040). 1a. Adjournment. Page 2 City of South San Francisco Printed on 11/10/2016 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:16-822,Version:1 Report regarding Resolution Approving an Exclusive Negotiating Rights Agreement (ENRA)between the South San Francisco Successor Agency,the City of South San Francisco and Hisense Real Estate (USA),LLC for the properties located at 200 Linden,212 Baden,and 216 Baden Avenue (APNs 012334130,012334160, 012334030 and 012334040). (Ron Gerber, Economic Development and Housing Manager) RECOMMENDATION It is recommended that the Successor Agency and City adopt a Resolution Approving an Exclusive Negotiating Rights Agreement (ENRA)between the South San Francisco Successor Agency,the City of South San Francisco and Hisense Real Estate (USA),LLC for the properties located at 200 Linden,212 Baden,and 216 Baden Avenue (APNs 012334130,012334160,012334030 and 012334040),subject to approval by the Oversight Board on the sale price. BACKGROUND/DISCUSSION The City of South San Francisco’s Long Range Property Management Plan (LRPMP),as approved by the California Department of Finance in November 2015,outlines the permissible uses for the various former Redevelopment Agency’s properties.The LRPMP establishes that the properties located at 200 Linden Avenue, and 212 and 216 Baden Avenue (collectively referred to as 200 Linden)be assembled with the intent of developer acquisition and development consistent with a redevelopment plan.This 0.72 acre property is located in the heart of the Downtown,with convenient access to the 101 highway,bus routes,the Caltrain station,and has significant development potential. On December 4,2015,staff issued a Request for Qualifications (RFQ)for the disposition of the properties consistent with the disposition contained in the LRPMP.A pre-submittal meeting and site visit was held on January 22,2016,and submittals were due February 3,2016.The City received responses from seven developers which included land uses such as mixed use condominiums,market rental housing,affordable housing, a hotel and a boutique hotel. On April 11,2016,the Joint Housing Subcommittee (Subcommittee)met to review the seven developer RFQ submittals.In an RFQ process,the primary emphasis is on reviewing experience,price and financial capacity. Once a preferred developer is selected,then a specific development concept can be refined during the Exclusive Negotiation phase.The Subcommittee did also note during their evaluation the various development concepts being proposed (from residential to hotel)as well as the envisioned building height,commercial space,and other related considerations. Upon reviewing the Price and Terms,the Subcommittee recommended to the Successor Agency that four of the seven developers (BayRock,Proferian,RAM,and OMNI Investments)be shortlisted for further consideration. On May 11,2016,the Successor Agency approved this shortlist for the Oversight Board’s consideration at the May 17,2016 meeting.The Oversight Board concurred with the Subcommittee and Successor Agency’s shortlist recommendation. The four shortlisted developers were asked to provide a “Best and Final”price offer as well as their Total Development Costs (TDC)for consideration.The shortlisted developers were then interviewed to further City of South San Francisco Printed on 11/3/2016Page 1 of 3 powered by Legistar™ File #:16-822,Version:1 Development Costs (TDC)for consideration.The shortlisted developers were then interviewed to further understand their experience and development concept.Prior to the scheduled interviews,one of the shortlisted developers,Proferian,withdrew their application due to concerns about construction costs.On June 23,2016, the Subcommittee interviewed the three remaining developers,and then met in closed session to review Price and Terms as well as the Total Development Costs.The Subcommittee requested additional confidential information from two of the three developers. On July 25,2016,the Subcommittee convened again to review the developers’responses.The Subcommittee reached a consensus that RAHM Investments and Omni Investments be recommended to the Successor Agency for interview and consideration. On August 10,2016,the Agency and Subcommittee interviewed the two developers.RAHM Investments and Omni Investments gave short presentations and were asked follow-up questions.The Agency and Subcommittee then met in closed session to discuss and consider the price and terms of the two offers.Omni Investments was recommended as the preferred developer.The preference for this developer was based on the fact that Omni Investments presented the Successor Agency with the highest price and a condo development versus rental. Finally,the Oversight Board convened on September 20,2016,to review the Successor Agency’s recommendation and confirmed their selection with Omni’s concept being the highest and best proposal. It should be noted that following the selection of Omni Investments,the developer has been renamed and is now known as Hisense Real Estate (USA), LLC (“Hisense”). Exclusive Negotiating Rights Agreement (ENRA) Since the selection of Hisense,staff has been working closely with the developer on negotiating an ENRA.The purpose of the ENRA is to establish procedures and standards for the negotiation between the Agency/City and Hisense in order to reach a Purchase and Sale Agreement (PSA).Key business points that are contained in the ENRA include the following. ·Deposit:A $300,000 deposit will be required upon execution of the ENRA.If the City chooses to terminate the ENRA or PSA agreement with Hisense due to non-performance,$250,000 of the deposit will be refunded.Should Hisense choose to terminate the ENRA due to Agency/City non-performance, 100%of the deposit will be refunded. The deposit will become applicable to the purchase price. ·Term:The ENRA is set initially at seven months with the ability to extend by up to 60 days for a payment of $25,000. ·Hisense to finalize and provide the City with a statement of their corporate structure ahead of the ENRA expiration. ·The developer will be required to submit a pro-forma as well as proof of financing and equity,ahead of the ENRA expiration. ·Good faith efforts to secure Letters of Interest (LOIs)from desired tenants.In their interviews on August 10,2016,Hisense noted that a drug store or a grocery store would likely be secured as a tenant for the ground floor retail.During the ENRA period,the City requests that the developer work in good faith to secure interest from potential new tenants. Next Steps If the Successor Agency approves the ENRA,staff and the developer will present the ENRA to the Oversight Board on November 22,2016,for their approval of the sale price.If approved,the ENRA will be executed and City of South San Francisco Printed on 11/3/2016Page 2 of 3 powered by Legistar™ File #:16-822,Version:1 Board on November 22,2016,for their approval of the sale price.If approved,the ENRA will be executed and the developer will have the ability to move forward with the negotiation of a Purchase and Sale Agreement and securing entitlements. CONCLUSION It is recommended that the Successor Agency and City Resolution Approving an Exclusive Negotiating Rights Agreement (ENRA)between the South San Francisco Successor Agency,the City of South San Francisco and Hisense Real Estate (USA),LLC for the properties located at 200 Linden,212 Baden,and 216 Baden Avenue (APNs 012334130, 012334160, 012334030 and 012334040). City of South San Francisco Printed on 11/3/2016Page 3 of 3 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:16-824,Version:1 Resolution Approving an Exclusive Negotiating Rights Agreement (ENRA) between the South San Francisco Successor Agency, the City of South San Francisco and Hisense Real Estate (USA) LLC for the properties located at 200 Linden, 212 and 216 Baden Avenue (APNs 012334130, 012334160, 012334030 and 012334040). WHEREAS, the Successor Agency (“Agency”) is the owner of certain property certain real property (the “Property”) located in the City of South San Francisco, California, known as County Assessor’s Parcel Numbers (“APN”) 012-334-130 (200 Linden Avenue), 012-334-160 (216 Baden Avenue), 012-334-040 and 012-334-030 (212 Baden Avenue); and WHEREAS, the Property was transferred from the City of South San Francisco to the Agency pursuant to Grant Deeds; and WHEREAS, on June 29, 2011 the legislature of the State of California (the “State”) adopted Assembly Bill x1 26 (“AB 26”), which amended provisions of the Redevelopment Law; and WHEREAS, pursuant to AB 26 and the California Supreme Court decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., which upheld AB 26 (together with AB 1484, the “Dissolution Law”), the Redevelopment Agency was dissolved on February 1, 2012; and WHEREAS, pursuant to the Dissolution Law, the Agency has prepared and the Oversight Board has approved a Long Range Property Management Plan (“LRPMP”) which is presently under review by California Department of Finance (“DOF”); and, WHEREAS, the LRPMP being reviewed by the DOF includes development plans for the Property; and, WHEREAS, DOF approval of a LRPMP authorizing a process for conveyance of the Property is required prior to conveyance of the Property, and, WHEREAS, the Agency is interested in selling the Property to Hisense Real Estate (USA), LLC, a California limited liability company (“Developer”) contingent upon Developer preparing all appropriate environmental review documents, and applying for land use entitlements from the City of South San Francisco and if such entitlements are granted constructing approximately 87 multi-family residential units (“Project”) on the Property; and, WHEREAS, the Developer has requested the exclusive right to collaborate with City to develop the Project and negotiate with the Agency for the purpose of reaching agreement on a project description, appropriate land uses, economic feasibility, and a definitive agreement whose terms and conditions would govern any conveyance of the Property and the development of the Property; and City of South San Francisco Printed on 11/10/2016Page 1 of 2 powered by Legistar™ File #:16-824,Version:1 WHEREAS, City desires to grant Developer the exclusive right to collaborate and negotiate with City with regard to development of the Property; and WHEREAS, the City Attorney has prepared an Exclusive Negotiation Rights Agreement ("Agreement") with Developer to reflect the terms and conditions of such exclusive collaboration and negotiation. NOW, THEREFORE, the Successor Agency to the former Redevelopment Agency of the City of South San Francisco does hereby resolve as follows: 1. The Recitals set forth above are true and correct, and are incorporated herein by reference. 2. The Agreement, substantially in the form attached hereto, is hereby approved, and the Executive Director or his designee is hereby authorized to execute it on behalf of the Successor Agency; to make revisions to the Agreement, with review and approval by the City Attorney, which do not materially or substantially increase the Agency’s obligations thereunder; to sign all documents; to make all approvals and take all actions necessary or appropriate to carry out and implement the intent of this Resolution. ***** City of South San Francisco Printed on 11/10/2016Page 2 of 2 powered by Legistar™ EXHIBIT A EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT by and amongst HISENSE REAL ESTATE(USA), LLC, SOUTH SAN FRANCISCO SUCCESSOR AGENCY, and CITY OF SOUTH SAN FRANCISCO HISENSE DRAFT 10-24-16 EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 -1- THIS EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT (this “Agreement”or “ENRA”) is entered into by and between the SOUTH SAN FRANCISCO SUCCESSOR AGENCY, a public agency (“Agency”),HISENSE REAL ESTATE(USA), LLC,a California limited liability company(“Developer”), and the CITY OF SOUTH SAN FRANCISCO, a municipal corporation (“City”),dated as of November 22, 2016 (the “Effective Date”), which is the date this Agreement was approved by the South San Francisco Oversight Board (“Oversight Board”).Agency,Developer,and City are each referred to as “Party” orcollectively referred to as the “Parties.” WHEREAS, the Agency is the owner of certain property certain real property (the “Property”) located in the City of South San Francisco, California, known as County Assessor’s Parcel Numbers(“APN”)012-334-130 (200 Linden Avenue), 012-334-160 (216 Baden Avenue), 012-334-040 and 012-334-030 (212 Baden Avenue),as more particularly described in Exhibit A attached hereto and incorporated herein by this reference; and, WHEREAS, the Property was transferred from the City of South San Francisco to the Agency pursuant to Grant Deeds recorded onMarch 11, 2011; and, WHEREAS, on June 29, 2011 the legislature of the State of California (the “State”) adopted Assembly Bill x1 26 (“AB 26”), which amended provisions of the Redevelopment Law; and, WHEREAS, pursuant to AB 26 and the California Supreme Court decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., which upheld AB 26 (together with AB 1484, the “Dissolution Law”), the Agency was dissolved on February 1, 2012; and, WHEREAS, pursuant to the Dissolution Law, the Agency has prepared and the Oversight Board and DOF has approved a Long Range Property Management Plan (“LRPMP”);and, WHEREAS, the Parties acknowledge that it is the intention of the Agency and the City, following execution of the Master Agreementfor Taxing Entity Compensation by all Taxing Entities, that the Agency will transfer the Property to the City, pursuant to the provisions of the LRPMP; and, WHEREAS, the Agency ,and ultimately, the City,areinterested in selling the Property to Developer contingent upon Developer supplying aLetterof Interest (“LOI”), preparing all appropriate environmental review documents, and applying for land use entitlements from the City and if such entitlements are granted constructing approximately 87multi-family residential units (“Project”) on the Property; and, WHEREAS, Developer anticipates expending funds to prepare environmental review documents, architectural and design drawings and conduct certain studies that are needed to assess the feasibility of the Project, consistent with the Downtown Station AreaPlan(“DSA”), Environmental Impact Report (“EIR”) and Rezoning(“Rezoning”), and requires a grant of exclusivenegotiating rights in order to be willing to make such expenditures; and EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 WHEREAS, at its meeting on November 7, 2016the Agency and City approved this Agreement and directed staff to negotiate a Purchaseand SaleAgreement(“Purchase Agreement”) for theProperty with Developer; and WHEREAS, the Oversight Board approved the sale price contained within this Agreement on ______________, 2016. NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows. 1.Good Faith Efforts to Negotiate.The Parties will use their best efforts to successfully negotiate (i) a PurchaseAgreement which will describe the terms and conditions governing the purchase of the Property by Developer, and (ii) a Development Agreement between the City and Developer that will set forth requirements and entitlements for the Project.The Parties will diligently and in good faith pursue such negotiations.Furthermore, the Parties will use their best efforts to obtain any third-party consent, authorization, approval, or exemption required in connection with the transactions contemplated hereby. This Agreement does not impose a binding obligation on Agency to convey any interest in the Property to Developer, nor does it obligate City to grant any approvals or authorizations required for the Property or any project or improvements constructed thereon. a.If Developer has not continuedto negotiate diligently and in good faith, Agency will give written notice thereof to Developer who will then have ten (10) business days to commence negotiating in good faith.Following the failure of Developer to thereafter commence negotiating in good faith within such ten (10) business day period, this Agreement may be terminated by Agency. If this Agreement is terminated by Agency pursuant to the above sentence, Developer acknowledges and agrees that Agency will suffer damages, including lost opportunities to pursue other development alternatives for the Property and delayed receipt of property tax revenues from the Property, and that it is impracticable and infeasible to fix the actual amount of such damages. Therefore, the Parties agree that if this Agreement is terminated as provided above, Agency will retainfifty thousand dollars ($50,000) of the Payment (as defined in Section 5of this Agreement, infra), plus any interest thereon, as fixed and liquidated damages and not as a penalty, and followingsuch termination neither Party will have any further rights against or liability to the other under this Agreement. b.If Agency has not continued to negotiate diligently and in good faith, Developer will give written notice thereof to Agency which will thenhave ten (10) business days to commence negotiating in good faith. Following the failure of Agency to thereafter commence negotiating in good faith within such ten (10) business-day period, this Agreement may be terminated by Developer.In the event of such termination by Developer, Agency will return one hundred (100) percent of the Payment to Developer in accordance with the provisions of Section 5of this Agreement,andneither Party will have any further rights against or liability to the other under this Agreement. EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 c.If, notwithstanding Agency's and Developer's mutual diligent, good faith negotiations, the Parties have not entered into a PurchaseAgreement on or before expiration of the Term of this Agreement (as defined in Section 3of this Agreement) or any extension thereof, Agency will return the Payment to Developer in accordance with the provisions of Section 5of this Agreement,and neither Party will have any further rights against or liability to the other under this Agreement. d.If performance of this Agreement results in execution of a PurchaseAgreement, the Agency will apply any unused portion of the Paymentto either the agreed- upon deposit or purchase price requirement of the Purchase Agreement. 2.Developer’s Exclusive Right to Negotiate With Agency.Agency agrees that it will not, during the term of this Agreement, directly or indirectly, through any officer, employee, agent, or otherwise, solicit, initiate or encourage the submission of bids, offers or proposals by any person or entity with respect to the acquisition of any interest in the Property or the development of the Property, and Agency will not engage any broker, financial adviser or consultant to initiate or encourage proposals or offers from other parties with respect to the disposition or development of the Property or any portion thereof. Furthermore, Agency will not, directly or indirectly, through any officer, employee, agent or otherwise, engage in negotiations concerning any such transaction with, or provide information to, any person other than Developer and its representatives with a view to engaging, or preparing to engage, that person with respect to the disposition or development of the Property or any portion thereof. 3.Term. a.The term of this Agreement(“Term”) commences on the Effective Date, and will terminate seven(7) months from the Effective Date, unless extended or earlier terminated as provided herein. b.Developer and the Agency agreeto theSchedule of Performancethatisattached hereto as Exhibit B. c.During the Negotiating Period Developer shall conduct due diligence activities, including but not limited to preparation of PlanningApplication, soils report, hazardous materials report, financial feasibility and title adequacy. d.During the Term, Developer will provide Agency with progress reports a minimum of every sixty(60) days with respect to Developer’s due diligence review of the Property, commencement of environmental requirements under CEQA, preparation of architecture and construction plans, and general progress toward development of the Property. e.The Term of this Agreement may be extended for up to a maximum of sixty(60) additional days upon the payment by Developer oftwenty five thousand dollars ($25,000).The Agency shall not have any discretion to deny or refuse this extension EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 upon receipt of the payment, but rather the extension shall be mandatory upon such payment. 4.Relationship of the Parties.Nothing in this Agreement creates between the Parties the relationship of lessor and lessee, of buyer and seller, or of partners or joint venturers. 5.Payment for Agency Costs. a.In consideration for this Agreement and the costs the Agency has and will incur in furtherance of this Agreement and the negotiation of the Purchase Agreement, Developer will, within five (5) days of the Effective Date, submit to Agency a good faith deposit (“Payment”) in the amount of Three HundredThousand Dollars ($300,000) in immediately available funds.Agency will deposit the Payment in an interest bearing account of the Agency and any interest, when received by Agency, will become part of the Payment.. b.This $300,000 Payment willconsist of a non-refundable $15,000 ENRA fee, and a refundable $35,000 as security for the Agency’s costs. Theremaining $250,000 shall befully refundable without deduction for costs, althougha partialdeduction may be made for damages as provided in Section 1(a) of this Agreement. The $15,000 fee will compensate the Agencyfor staff costs to implement the Agreement. Costs thatmay be covered by the$35,000 security will be determined in good faith by negotiation between the Parties. c.Agency agrees to account for deposit, interest earnings, and any expenditures made related to the execution of this Agreement consistent with all reporting requirements of the DOF. The Agency will notify the Developer of the identity, qualifications, scope ofwork, and budget for any third party consultants that the Agency wishes to pay for out of the $35,000 costs security deposit,prior to authorizing work under any contract with such third party. The Agencywill provide Developer a written account of such proposed payments,including copies of any third party invoices under approved scopes of work (not including any information subject to attorney client privilege). d.Any amount remaining from thePayment after expiration of the Term of this Agreement or execution of a Purchase Agreement, whichever comes first, and taking into account expenditures authorized by Section 5(b)above, will be disposed of as provided in Section 1of this Agreement. e.In addition to Agency’scosts discussed herein, Developer shall be subject to all applicable fees imposed by the City for processing land use entitlements as set forth in the City’s current adopted Master Fee Schedule and any applicable cost recovery and indemnification agreements. 6.Terms and Conditions of the Purchase Agreement. EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 The Parties agree to use their best efforts to successfully negotiate a Purchase Agreement including, but not limited to, the lease terms, rental payments, terms of the purchase and the option price. The Parties agree the terms shall be generally based on those set forth herein and in Exhibit CandExhibit Dattached hereto and incorporated herein by this reference. 7.Developer’s Studies; Right of Entry. a.During the Term of this Agreement, Developer will use its best efforts to prepare, at Developer’s expense, any studies, surveys, plans, specifications and reports (“Developer’s Studies”) Developer deems necessary or desirable in Developer’s sole discretion, to complete its due diligence for the Property.Developer’s Studies may include, without limitation, title investigation,marketing, feasibility, soils, seismic and environmental studies, financial feasibility analyses and design studies. The Developer will have rights of access to the Property to prepare the Developer’s Studies. b.The Developer and its consultants shall have the right to enter upon the Property during normal business hours to conduct investigations in accordance with this Agreement.In connection with such entry and investigation, the Developer shall: (i) give the Agency and City,or its designee at least 48hours’advance notice; (ii) repair and restore any damage Developermay cause;and(iii) carry liability insurance covering the right of entry naming the City as an additional insured. c.Developer will provide the Agency with work plans, drawings, and descriptions of any intrusive sampling it intends to do.Developer must keep the Property in a safe condition during its entry.Developer shall repair, restore and return the Property to its condition immediately preceding Developer’s entry thereon at Developer’s sole expense. d.Without limiting any other indemnity provisions set forth in this Agreement, Developer shall indemnify, defend (with counsel approved by Agency) and hold the Agency, its officials, officers, employees, consultants, contractors and volunteers ("Agency Indemnitees") harmless from and against all claims resulting from or arising in connection with entry upon the Property by Developer or Developer’s agents, employees, consultants, contractors or subcontractors pursuant to this Section 7; provided however, Developer will have no indemnification obligation with respect to the gross negligence or willful misconduct of any Agency Indemnitees.Developer’s indemnification obligations set forth in this Section 7 shall survivethe termination of this Agreementand shall apply to any claims filed against the Agency withineighteen months of termination of this Agreement. e.If upon expiration of the Term of this Agreementthe Parties have not successfully negotiated a PurchaseAgreement, Developer will provide Agency within fifteen (15) days following said date of expiration copies of the Developer’s Studies completed by such date, not including the intellectual property of Developer, provided that the Agency first delivers to Developer payment in full for all of Developer’s actual costs paid to vendors who prepared these Developer’s Studies. EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 Developer will also provide Agency with copies of any Developer’s Studies completed after the expiration of the Term within fifteen (15) days following completion of such studies, or if Developer intends not to complete any Developer Studies, Developer will provide Agency with copies of such uncompleted studies, again provided that the Agency first delivers to Developer payment in full for all of Developer’s actual costs paid to vendors who prepared these Developer’s Studies. f.Letter of Interest. Within one hundred and eightydays (180) following the Effective Date, Developer will provide Agency with a LOI from retail tenantsfor the occupation of some or all of the ground floor commercial space. 8.Agency’s Reports and Studies.Within twenty (20) days following the Effective Date, Agency will make available to Developer for review or copying at Developer’s expense all nonprivileged studies, surveys, plans, specifications, reports, and other documents with respect to the Property that Agency has in its possession or control, which have not already been provided.Studies or documents prepared by Agency and its agents solely for the purpose of negotiating the terms of a Purchase Agreement are not required to be provided by Agency to Developer and are excluded from this requirement 9.Developer’s Pro Forma,Evidence of Financing and Schedule for Conveyance of Property Following Potential Approval of a Purchase Agreement.At least 45 days prior to Agency consideration of the Purchase Agreement,Developer will provide Agency with a pro forma for the Project that confirms the financial feasibility of Developer’s proposed development of the Property and planned financing for the Project.The parties agree that the Purchase Agreement will contain language that provides thatnot later than forty-five (45) daysprior to conveyance of the Property,Developer will provide evidence satisfactory to Agency that Developer has secured binding commitments, subject only to commercially reasonable conditions, for all funding necessary for the successful purchase of the Property and completion of the Project, it being understood and agreed that such satisfactory funding evidence shall include, without intending limitation, funds held in reputable banks located outside the United States of America. 10.Full Disclosure. Developer is required to make full disclosure to Agency of its principals; officers; major stockholders, partners or members; joint venturers; negotiators; development managers; consultants and directly involved managerial employees (collectively, “Developer Parties”); and all other material information concerning Developer. Any change in the identity of the Developer Parties will be subject to the approval of Agency, which will not be unreasonably withheld. Developer will make and maintain full disclosure to Agency of its methods of financing to be used in the acquisition and development of the Property. 11.Periodic Reporting to Governing Bodies. Agency will report periodically to the Agency Board and/or the Oversight Board of the Successor Agency on the status of negotiations, and Developer may be asked to attend such meetings to provide those bodies with a status update of their development efforts related to this Agreement. 12.Reserved. EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 13.Confidentiality; Dissemination of Information.To the extent permitted by law, during the term of this Agreement, each Party will obtain the consent of the other Party prior to issuing or permitting any of its officers, employees or agents to issue any press release or other information to the press with respect to this Agreement; provided however, no Party will be prohibited from supplying any information to its representatives, agents, attorneys, advisors, financing sources and others to the extent necessary to accomplish the activities contemplated hereby so long as such representatives, agents, attorneys, advisors, financing sources and others are made aware of the terms of this Section.Nothing contained in this Agreement will prevent either Party at any time from furnishing any required information to any governmental entity or authority pursuant to a legal requirement or from complying with its legal or contractual obligations. 14.Execution of Purchase Agreement.The Agency has no legal obligation to grant any approvals or authorizations for the sale of the Property or anydevelopment thereon until the Purchase Agreement has been approved by the Agency, the South San Francisco Oversight Board and the California Department of Finance, if necessary. Such consideration and potential approval shall not occur until the Agency has completed, considered and certified/approved any required CEQA environmental review documents. 15.Transfer of the Property from the Agency to the City. The Parties acknowledge that it is the intention of the Agency and the City, following execution of the Master Agreement Master Agreement for Taxing Entity Compensation by all of the Taxing Entities, that the Agency willtransfer all rights, title and interest Agency has in the Property to the City, pursuant to the provisions of the LRPMP. If such a transfer is accomplished during the Term of this Agreement,all references to Agency in this Agreement shall be replaced with Cityand City shall assume all rights and obligations previously assigned to Agency under this Agreement. 16.Termination. a.This Agreement may be terminated at any time by mutual consent of the Parties. b.Agency will have the right to terminate this Agreement upon its good faith determination that Developer is not proceeding diligently and in good faith to carry out its obligations pursuant to this Agreement.Agency will exercise such right in accordance with the provisions set forth in Section 1of this Agreement. c.Developer will have the right to terminate this Agreement, in accordance with the provisions set forth in Section 1of this Agreement, if the results of its investigation of the Property are unsatisfactory, in Developer’s sole and absolute discretion,with respect to Developer’s desired development activities or if Developer is unable to obtain other necessary approvals, rights or interests. d.Neither Party will have the right to seek an award of damages as a result of the termination of this Agreement pursuant to this Section. 17.Effect of Termination.Upon termination as provided herein, or upon the expiration of the Term and any extensions thereof without the Parties having successfully negotiated a EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 Purchase Agreement, this Agreement will forthwith be void, and there will be no further liability or obligation on the part of either of the Parties or their respective officers, employees, agents or other representatives; provided however, the provisions of Section 13(Confidentiality; Dissemination of Information), Section 19(Indemnification), and Section 23(Brokers) will survive such termination.Provided further, that upon termination or expiration of this Agreementwithout the Parties having successfully negotiated a Purchase Agreement, Developer will deliver to Agency all of the Developer’s Studies pursuant to the provisions of Section 7of this Agreement, including the condition stated in Section 7that the Agency must pay Developer forits actual costs in obtaining those Studies before Developer is obligated to deliver them to Agency 18.Notices.Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement will be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section.All such notices will be sent byany one or more of the following methods: a.Personal delivery, in which case notice is effective upon delivery; b.Certified or registered mail, return receipt requested, in which case notice will be deemed delivered on receipt if delivery is confirmed by a return receipt; c.Nationally recognized overnight courier, with charges prepaid or charged to the sender’s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; d.Emailtransmissionto the email addresses noted below,in which case notice will be deemed delivered upon transmittal, provided that aduplicatehardcopy of the email is promptly delivered by first-class or certified mail or by overnight delivery. Agency/City:South San Francisco Successor Agency 400 Grand Avenue South San Francisco, CA 94080 Attn: Agency Executive Director Tel (650) 877-8501 Email: [email protected] cc: [email protected] with a copy to:Meyers Nave Attn: Jason Rosenberg 575 Market Street, Suite 2080 San Francisco, CA 94105 Tel (415) 421-3711 Email: [email protected] Developer: EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 Hisense Real Estate (USA), LLC. 235 Grand Ave #203 South San Francisco, CA 94080 Attention: Kenneth Cui Telephone: (650) 873-2738 Email: [email protected] with a copy to: James Braden Law Offices 44 Montgomery Street, Suite 1210 San Francisco, CA 94104 Attention: James M. Braden Telephone: (415) 398-6865 Email: [email protected] 19.Indemnification.Developer hereby covenants, on behalf of itself and its permitted successors and assigns, to indemnify, hold harmless and defend the Agency and the City of South San Francisco and their elected and appointed officials, officers, agents, representatives and employees (“Indemnitees”) from and against all claims, costs (including without limitation reasonable attorneys’ fees and litigation costs) and liability, arising out of or in connection with this Agreement and/or arising out of or in connection with the Developer’s access to and entry on the Property pursuant to Section 7of this Agreement; provided however, Developer will have no indemnification obligation with respect to the gross negligence or willful misconduct of any Indemnitee. 20.Severability.If any term or provision of this Agreement or the application thereof will, to any extent, be held to be invalid or unenforceable, such term or provision will be ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining terms and provisions of this Agreement or the application of such terms and provisions to circumstances other than those as to which it is held invalid or unenforceable unless an essential purpose of this Agreement would be defeated by loss of the invalid or unenforceable provision. 21.Entire Agreement; Amendments In Writing; Counterparts.This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral and written, between the Parties with respect to such subject matter.This Agreement may be amended only by a written instrument executed by the Parties or their successors in interest.This Agreement may be executed in multiple counterparts, each of which will be an original and all of which together will constitute one agreement. 22.Successors and Assigns; No Third-Party Beneficiaries.This Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and assigns; provided however, that neither Party will transfer or assign any of such Party’s rights hereunder by operation of law or otherwise without the prior written consent of the other Party, and any such transfer or assignment without such consent will be void. Notwithstanding the foregoing, Developer ispermitted to assign this Agreement without EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 such written consent, provided that Developer assigns this Agreement to (i) an entity that is wholly controlled by Developer, or(ii) an entity in which the Developer is a member and has day to day managementresponsibilities for such entity.Subject to the immediately preceding sentence, this Agreement is not intended to benefit, and will not run to the benefit of or be enforceable by, any other person or entity other than the Parties and their permitted successors and assigns. 23.Brokers.Each Party warrants and represents to the other that no brokers have been retained or consulted in connection with this transaction.Each Party agrees to defend, indemnify and hold harmless the other Party from any claims, expenses, costs or liabilities arising in connection with a breach of this warranty and representation.The terms of this Section will survive the expiration or earlier termination of this Agreement. 24.Approvals.Unless otherwise provided in this Agreement, the Agency Executive Director will be authorized to enter into all written approvals, consents or waivers by the Agency without further authorization by the Agency Board.Nothing herein, however, will be deemed to prevent the Agency Executive Directorfrom requesting formal approval by the Agency Boardif the Agency Executive Director, in his or her sole discretion, determines to seek such approval. 25.Captions.The captions of the sections and articles of this Agreement are for convenience only and are not intendedto affect the interpretation or construction of the provisions hereof. 26.Governing Law.This Agreement will be governed by and construed in accordance with the laws of the State of California. 27.Dispute Resolution. Any controversy, dispute or claim related to or arising from this Agreement or in any way arising from the dealings of the parties with one another, shall be resolved by the following steps in the following sequence: (A) By non-binding Mediationbefore, and in accordance with the rules of, the Judicial Arbitration and Mediation Services ("JAMS"),conducted by a retired Judge,with exclusive venue in San Francisco, California and in no other place. (B) If that Mediation fails to resolve the dispute, then by binding Arbitration before, and in accordance with the rules of, JAMS, conducted by a retired Judge, with exclusive venue in San Francisco, California and in no other place. In anysucharbitration, the prevailing party shall be entitled to an award of reasonable attorney's fees and costs. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 AGENCY By:_______________________________ Mike Futrell Agency Executive Director ATTEST: By: _______________________________ Agency Clerk APPROVED AS TO FORM: By: _______________________________ Jason Rosenberg Agency Counsel CITY By:_______________________________ Mike Futrell City Manager ATTEST: By: _______________________________ CityClerk APPROVED AS TO FORM: By: _______________________________ Jason Rosenberg City Attorney DEVELOPER By: _______________________________ Developer representative name: APPROVED AS TO FORM: By: _______________________________ James M. Braden AttorneyDeveloper EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 EXHIBITA PROPERTY The land referred to is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: PARCEL ONE: Lot 8, Block 140, as delineated upon that certain Map entitled "South San Francisco, San Mateo County, California", filed for record in the office of the Recorder of the County of San Mateo, State of California, on March 1st, 1892 in Book "B" of Maps, at Page 6, and a copy entered in Book 2 of Maps at Page 52. APN: 012-334-030 JPN: 012-033-334-03 PARCEL TWO: Lots 6 and 7, Block 140, as delineated upon that certain Map entitled "South San Francisco, San Mateo County, California", filed for record in the office of the Recorder of the County of San Mateo, State of California, on March 1st, 1892 in Book "B" of Maps, at Page 6, and a copy entered in Book 2 of Maps at Page 52. APN: 012-334-040 JPN: 012-033-334-04 PARCEL THREE: Lots 11, 12, 13 and 14 in Block 140, as shown on that certain Map entitled "South San Francisco, San Mateo Co. Cal., Plat No. 1", filed for record in the office of the Recorder of the County of San Mateo on March 1, 1892 in Book "B" of Maps, at Page 6, and copied into Book 2 of Maps at Page 52. APN: 012-334-130 JPN: 012-033-334-13 PARCEL FOUR: Lots 9 and 10 in Block 140, as shown on that certain Map entitled "South San Francisco San Mateo Co. Cal. Plat No. 1", filed in the office of the County Recorder of San Mateo County, State of California, on March 1, 1892, in Book "B" of Maps, at Page 6 and copied into Book 2 of Maps, at Page 52. APN: 012-334-160 JPN: 012-033-334-16 EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 EXHIBIT B SCHEDULE OF PERFORMANCE Oversight Board Meeting –ENRA Approved November 22, 2016 ENRA signed by allParties November 23, 2016 Expiration of seven (7)Month Exclusive Negotiating Period for Purchase and Sale Agreement June23, 2017 Additional 60 day administrative extension (if necessary)August 22, 2017 EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 EXHIBIT C DEVELOPMENT PROPOSAL Criteria Hisense Terms Land Purchase Price Offered $3,500,000 Deposit $300,000 Prevailing Wages for Construction Yes Property APNs 012-334-130 012-334-160 012-334-040 012-334-030 Development Type Condominium housing with ground floor commercial. Proposed Number of Units 87Total units Unit Size Composition 12One-bedroom, one bathroom 40Two-bedroom, one bathroom 25Two bedroom, two bathroom 10Three-bedroom, two bathroom Affordable Units 20% BMR would be required as per the City’s Inclusionary Housing Ordinance (17 units) Retail Space Ground Floor commercial including a drug store Project Amenities To be determined Parking 102parking spaces Developer’s Equity Stake 100% Project Entitlement/ Purchase Agreement Consideration and Construction Period 10months for entitlements Spring 2018 12 months for construction Project Phasing To be confirmed in ENRA period EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 Offsite Public Improvements Make a contribution in an amount to be determined during negotiation of Purchase Agreement for offsite improvements (which will also be identified during project entitlement process and Purchase Agreement). EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT HISENSE REV. 11-3-16 EXHIBIT D Term Sheet for 200 Linden Avenue Exclusive Negotiating Rights Agreement (ENRA) Term Sheet Deposit Terms:$300,000 Date:within five days after ENRA execution (November 28, 2016) Payment:City’s bank account (title company is an option) Refundability:$ 250,000refundable if City terminates any and all agreements due to developer non-performance. $ 300,000 (full amount) refundable if developer terminates any and all agreements due to City non-performance ENRA term: Sevenmonths with one 60 day extension obtainable Payment of a further $ 25,000 Project schedule:Prior to ENRA expiration. Developer to submit project schedule delineating pre-development phases through completion of construction drawings. Subsequent phases estimating key milestones through completion of construction should also be reflected. Corporate structure/development team to be confirmed. Financing and equity. Owner occupancy consistent w/Fannie Mae and Freddie Mac guidelines. Ground floor retail:Good Faith Efforts-broker to secure LOI’s from the desired tenants within 180 days of ENRA execution (e.g. Walgreen’s or small market). Additionally, restaurants or other retail tenant types can be included in the preferred categories. Personal and financial services commercial uses may be prohibited. Developer to provide retail progress reports every 60 days delineating tenants contacted, their contact information and outcome of contact. 35% of concept drawings to be completed by ENRA expiration. Planning entitlement application to be submitted to Planning by ENRA expiration. Purchase and Sale Agreement finalized. Draft Pro-forma submission ahead of ENRA expiration. 2723861.2