HomeMy WebLinkAboutOB Minutes 07.18.17 MINUTES
aA REGULAR MEETING
t -11 _y
_ OVERSIGHT BOARD FOR THE
o RP SUCCESSOR AGENCY TO THE CITY OF
SOUTH SAN FRANCISCO
REDEVELOPMENT AGENCY
P.O. Box 711 (City Hall, 400 Grand Avenue)
South San Francisco, California 94083
CITY HALL
LARGE CONFERENCE ROOM, TOP FLOOR
400 GRAND AVENUE
TUESDAY, JULY 18,2017
2:00 p.m.
CALL TO ORDER TIME: 2:03 p.m.
ROLL CALL PRESENT: Chairperson Cullen, Vice Chair Krause,
Boardmembers Addiego, Christensen,
Friedman and Scannell.
ABSENT: Boardmember Farrales.
PLEDGE OF ALLEGIANCE
The Board and members of the public in attendance recited the Pledge of Allegiance.
AGENDA REVIEW
None.
MATTERS FOR CONSIDERATION
1. Motion to approve the Minutes of the meeting of May 16, 2017.
Motion—Boardmember Addiego/Second—Boardmember Scannell: to approve the minutes of the
May 16, 2017 meeting. Approved by the following voice vote: AYES: Boardmembers Addiego,
Christensen, Friedman and Scannell, Vice Chair Krause and Chair Cullen. NAYES: None.
ABSTAIN: None. ABSENT: Boardmember Farrales.
2. Report regarding a resolution approving the retention by the City of South San
Francisco of certain former Redevelopment Agency real property assets pursuant to
the approved Long Range Property Management Plan and Health and Safety Code
Section 34191.5,upon the payment of$7,180,000, with the proceeds to be distributed
to the local taxing entities. (Marian Lee, Assistant City Manager and Jason
Rosenberg, City Attorney)
2a. Resolution No. 3-2017 approving the retention by the City of South San Francisco of
certain former Redevelopment Agency real property assets pursuant to the approved
Long Range Property Management Plan and Health and Safety Code Section 34191.5,
upon the payment of seven million one hundred eighty thousand dollars ($7,180,000),
with the proceeds to be distributed to the local taxing entities.
City Manager Futrell presented the staff report recommending that the Oversight Board adopt a
resolution approving a purchase price of$7,180,000 and retention by the City of certain former
Redevelopment Agency real property assets (former PUC parcels: APN 093-312-050,APN 093-312-
060, APN 011-326-030, APN 011-322-030)pursuant to the approved Long Range Property
Management Plan(LRPMP) and Health and Safety Code Section 34191.5. Mr. Futrell opened by
stating that the recommended action was administrative in nature given Board approvals and proposal
of a counter offer at a May 2017 meeting. However, based upon Chair Cullen's submission of a
letter suggesting an alternative valuation method for the property at issue, Mr. Futrell presented
information supporting the previously adopted purchase price and provided a brief history of the
transaction. He stated that consistent with the approved LRPMP, on February 8, 2017,the South San
Francisco City Council adopted Resolution 16-2017 approving the transfer of certain Redevelopment
Properties from the Successor Agency to the City. Subsequently, on February 21,2017,the Board
adopted a resolution approving the transfer of the Redevelopment Properties from the Successor
Agency to the City. Subsequently, the Successor Agency and City executed grant deeds transferring
all remaining the Redevelopment Properties to the City in order to carry out the terms of the LRPMP.
Mr. Futrell advised that the City is interested in retaining four(4) of the 19 Redevelopment Properties
in order to construct the City's proposed Community Civic Campus project at the corner of El
Camino Real and Chestnut Avenue. These four(4)properties are part of the former PUC parcels and
are identified in the LRPMP as property numbers#2, #3, #6, . A PowerPoint slide depicting this
location and the affected properties was displayed. Mr. Futrell advised that Watts, Cohn and Partners
Inc. appraised these properties in December 2016 and determined that the fair market price of the
subject PUC Properties based on the highest and best uses contemplated in the LRPMP, after
reasonable deductions was $7,180,000. The reasonable deductions were for demolition, allocable
share of infrastructure costs for the planned extension of Oak Avenue and required environmental
cleanup. The offer of the said amount was presented to the Oversight Board and was accepted with
the addition of the following two conditions: (1) The City would commit to including the Oak
Avenue extension project in the City's Capital Improvement Plan,making best reasonable efforts to
prepare a full funding plan(including a$5,370,000 set aside) for the total cost of the extension which
is estimated at$15,500,000 in 2017 dollars, and building the project subject to necessary processes
and approvals; and (2) If the final costs of environmental remediation undertaken by the City on the
PUC Properties costs less than $790,000, the cost estimate for soil remediation, the City would
distribute the difference between the$790,000 remediation estimate and the final remediation costs to
the taxing entities.
OVERSIGHT BOARD REGULAR MEETING JULY 18,2017
MINUTES PAGE 2
City Manager Futrell advised the purchase price and two (2) conditions were brought back before the
City Council for approval in June, and the Council agreed to the price as well as the conditions. The
item before the Board today was acceptance of the counter offer including the conditions.
Mr. Futrell advised the Board that the acquisition of the Civic Center site was being financed with
Measure W funds. He advised that in November 2015,the City's voters approved Measure W with
the intention of establishing funding for improvements in the City. Groundbreaking on the Civic
Center site was anticipated in late 2018 or early 2019. Mr. Futrell opined that placement of the Civic
Center would serve as a revenue generator for all the taxing entities as certain projects and
developments in the area were contingent upon the City's placement of this project.
Boardmember Scannell queried the components of the Civic Center.
City Manager Futrell advised the Center would house the Police Station, the IT Department, Human
Resources Department and possibly the City Clerk Department. There would also be a new Library
and Park and Recreation Center on the site. Various amenities, including the Council Chambers and
Public Meeting rooms would be present.
In response to a question from Boardmember Scannell regarding the tax authorized by Measure W,
Boardmember Addiego advised the Measure was a sales tax to be used for a number of items,
including the Civic Center, roads and parks, and public safety.
Chair Cullen advised that his recent letter to the Assistant City Manager was not objecting to the
development of the Civic Center Campus,but rather suggesting a different method for valuation of
the property that is the subject of the sale. The Income Approach reflected a value of the property of
about $9.4 million, which is just slightly higher than what the Redevelopment Agency had paid for
the properties. Chair Cullen advised he believed the Income Approach more accurately reflected the
appraised value of the property since the sale to the City was taking the property out of the open
market process. He noted that the appraiser did not look at the loss of property tax revenue the taxing
entities would receive as part of the valuation.
City Manager Futrell observed that planned private developments anchored on the City's intent to
build a Civic Center Campus in the specified area would bring more property tax revenue to the
taxing entities.
Members of the public offered commentary as to the value the Civic Center Campus would bring to
the community.
Resident Edith Arias discussed the enormous benefit her family had received through use of the
City's Recreation and Library programs throughout the years. She encouraged the Board to consider
the sale so that the City's programs could continue to grow and develop and meet residents' needs
into the future.
Boardmember Scannell asked Mrs. Arias whether she had the impression the Board was trying to
stop the Civic Center Project from moving forward. He assured her that the Board was in support of
the Project,the only question was the purchase price of the property on which the City hoped to
develop the Campus.
OVERSIGHT BOARD REGULAR MEETING JULY 18,2017
MINUTES PAGE 3
Resident Joanne Calvert stated that while numbers are important, the significance of the project to the
people living in South San Francisco needed to be considered. She noted she had been living in the
community for 55 years and the City's various programs contributed to the balanced and robust
nature of her quality of life. She also believed many of the City's programs were vital to senior
citizens.
Boardmember Addiego assured the residents that were present that the project was not in jeopardy.
The outstanding issue was the sale price of the property on which the City hoped to develop the Civic
Center.
Residents Gail Davidson and Florida Ventura also voiced their respective support for the Civic
Center Campus.
Boardmember Christenson praised the City and its approach to redevelopment in the past.
City Manager Futrell responded to Chair Cullen's suggestion of the Income Approach for appraising
the property. He acknowledged receipt of the Chairman's letter,but respectfully disagreed with the
methodology. He stated that the outside certified appraiser looked at the market value of the property
in its current condition. He respected the time the Chairman put into the analysis,but believed the
certified appraiser's conclusion should be honored.
Boardmember Scannell questioned the dollar impact of trouble spots on the land.
City Manager Futrell noted the trouble spots were many. For example,there was environmental
contamination from the auto dealership that previously occupied a portion of the space that would
need to be remediated. In addition, it would cost the City roughly 15 million dollars to build a road
so that portions of the property could be accessed.
Boardmember Addiego stated he followed the math the Chairman had presented. He understood the
Board did not have to accept the future property tax estimates from private development projects
potentially contingent upon the Civic Center Campus being built at the specified location. However,
Boardmember Addiego absolutely believed the private project at the former gas station site adjacent
to the property was anchored to development of the Civic Center site and would bring substantial
property tax revenue to the entities at the table into the future.
Motion—Boardmember Addiego/Second—Boardmember Christensen: to approve Resolution No. 3-
2017. Approved by the following voice vote: AYES: Boardmembers Addiego, Christensen and
Friedman and Vice Chair Krause. NAYES: Boardmember Scannell and Chair Cullen. ABSTAIN:
None. ABSENT: Boardmember Farrales.
City Manager Futrell thanked the Board for the robust discussion of the resolution. He stated that
City staff had a lot of work ahead with respect to the Civic Center Project and that the Board would
be hearing multiple future issues related to this development.
FUTURE AGENDA ITEMS
3. 636 El Camino Real Commercial Space.
OVERSIGHT BOARD REGULAR MEETING JULY 18,2017
MINUTES PAGE 4
No discussion on this item.
Chair Cullen reminded staff that minutes from the meeting of January 31, 2017 were pending
approval by the Board.
ADJOURNMENT
Being no further business, Chair Cullen adjourned the meeting at 3:08 p.m.
Sub ittted: {9' Approved:
\p,01
Krista alfnelli, Clerk Neil Cullen, Chairperson
Oversight for the S essor Oversight Board for the Successor
Agency to the South San Francisco Agency to the South San Francisco
Redevelopment Agency Redevelopment Agency
OVERSIGHT BOARD REGULAR MEETING JULY 18,2017
MINUTES PAGE 5