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HomeMy WebLinkAbout2018-04-11 e-packet@6:00Wednesday, April 11, 2018 6:00 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 Special City Council Special Meeting Agenda April 11, 2018Special City Council 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 Special Meeting on Wednesday, April 11, 2018, at 6:00 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. CLOSED SESSION Closed Session: Conference with Real Property Negotiators: (Pursuant to Government Code Section 54956.8) Properties: Hotel Site at Oyster Point (APN 015-010-600, and more particularly shown as Parcel 6 on Parcel Map 17-0002). City Negotiators: Alex Greenwood, Nell Selander, and Ernesto Lucero. Negotiating Parties: City of South San Francisco and Ensemble Investments. Under Negotiations: Price and terms for disposition of the property. 1. ADMINISTRATIVE BUSINESS Report regarding a resolution approving the Housing Standing Committee recommendation to select Ensemble Investments as the preferred developer for the Oyster Point hotel site and authorizing the City Manager to enter into an Exclusive Negotiating Rights Agreement with Ensemble Investments. (Ernesto Lucero, Economic Development Coordinator) 2. Resolution approving the Housing Standing Committee recommendation to select Ensemble Investments as the preferred developer for the Oyster Point hotel site and authorizing the City Manager to enter into an Exclusive Negotiating Rights Agreement with Ensemble Investments. 2a. Adjournment. Page 2 City of South San Francisco Printed on 4/16/2018 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-183 Agenda Date:4/11/2018 Version:1 Item #:1. Closed Session: Conference with Real Property Negotiators: (Pursuant to Government Code Section 54956.8) Properties: Hotel Site at Oyster Point (APN 015-010-600, and more particularly shown as Parcel 6 on Parcel Map 17-0002). City Negotiators: Alex Greenwood, Nell Selander, and Ernesto Lucero. Negotiating Parties: City of South San Francisco and Ensemble Investments. Under Negotiations: Price and terms for disposition of the property. City of South San Francisco Printed on 4/5/2018Page 1 of 1 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-36 Agenda Date:4/11/2018 Version:1 Item #:2. Report regarding a resolution approving the Housing Standing Committee recommendation to select Ensemble Investments as the preferred developer for the Oyster Point hotel site and authorizing the City Manager to enter into an Exclusive Negotiating Rights Agreement with Ensemble Investments.(Ernesto Lucero,Economic Development Coordinator) Staff recommends that the City Council take the following actions:1)approve the recommendation of the Housing Standing Committee to select Ensemble Investments as the preferred developer of a hotel on City-owned property at Oyster Point,and 2)authorize the City Manager to enter into an Exclusive Negotiating Rights Agreement with Ensemble Investments. BACKGROUND On March 23,2011,a Disposition and Development Agreement (DDA)was executed between Oyster Point Ventures and the City.The DDA and subsequently approved Oyster Point Specific Plan (“Specific Plan”) identified a 4.7 acre,City-owned parcel (identified in Attachment 1)as an opportunity site for the development of an upscale hotel.The Specific Plan provided preliminary entitlements for up to 350 hotel rooms and 40,000 square feet of retail amenities on the site.The site is ideal for a high quality hotel as it features waterfront views,is located just steps from the South San Francisco Ferry Terminal,and is within close proximity of the City’s biotech cluster and San Francisco International Airport. A CBRE Hotels market data report (Attachment 2)shows strong regional market conditions.Hotels in the region have high occupancy rates,average daily rates (ADR),and revenue per available room (“RevPar”)rates; all are indicators of the potential for a high-end hotel to succeed in the South San Francisco market. A hotel development at this location would also serve the high demand for quality meeting space by businesses in the City’s biotech cluster.The area currently lacks amenities that an upscale or upper scale hotel would bring to the community,such as restaurants,cafes,day spas,or other complementary uses.New life science construction has surpassed the supply of high quality,upscale hotel brands in the area,making the Oyster Point area a prime location for this use. Developer Solicitation and Selection Process City staff began a thorough solicitation process in February 2017 to select a highly qualified development team for a future hotel on the City-owned site at Oyster Point,beginning with a Request for Qualifications (RFQ) and culminating with a Request for Proposals (RFP)along with interviews before the Housing Standing Committee on December 11,2017.If a developer is selected to proceed with hotel development at the site,the City will retain ownership of the land and will enter into a Ground Lease Agreement with the selected City of South San Francisco Printed on 4/5/2018Page 1 of 5 powered by Legistar™ File #:18-36 Agenda Date:4/11/2018 Version:1 Item #:2. developer for the ground-up construction of a hotel. Phase 1: Request for Qualifications The City issued the RFQ on February 24,2017,and received submittals from eight teams:AJ Capital Partners, OTO Development,M-Rad Architecture,Shashi Group,Glacier House Hotels,Ensemble Investments, Bayview Development Group, and JMA Ventures. On May 1,2017,a Review Panel -including representatives from Genentech,the California Life Sciences Association,and the City’s Economic &Community Development Department and Public Works Department - met to review and score all submittals in response to the RFQ.The Review Panel recommended that the following six developer teams be interviewed. ·AJ Capital Partners (Chicago, IL) ·OTO Development (Spartanburg, SC) ·Shashi Group (Cupertino, CA) ·Ensemble Investments (Long Beach, CA) ·Bayview Development Group (San Jose, CA) ·JMA Ventures (San Francisco, CA) Two of the developers,AJ Capital Partners and Bayview Development Group,declined to continue with the interview process because they determined the project would be infeasible for their portfolio. The interviews took place on May 22-23,2017,after which the Review Panel recommended a short list of four developers be invited to respond to a Request for Proposals:JMA Ventures,Ensemble Investments,Shashi Group,and OTO Development.At its June 26,2017 meeting,the Housing Standing Committee (the “Committee”) confirmed the Review Panel’s recommended short list. Phase 2: Request for Proposals On July 3,2017,staff issued a RFP to the short list of developers (Attachment 3).The RFP requested more detailed information on each development team,intended hotel program,schematic drawings,and financial capability and analysis.Three of the short listed developers submitted proposals:JMA Ventures,Ensemble Investments, and Shashi Group. The three developers were invited to interviews with the Committee at a Special Meeting on December 11, 2017.The groups presented their proposed development team,demonstrated relevant experience,proposal for hotel programming and amenities at the site,and responded to questions from the Committee.Throughout the developer solicitation and selection process,the developer selection criteria consisted of:appropriateness and quality of the proposed concept,community and economic benefits to Oyster Point and the City,financial capability to consummate the proposed deal,the delivery of a high-quality iconic design,as well as the completeness and clarity of the proposal. City of South San Francisco Printed on 4/5/2018Page 2 of 5 powered by Legistar™ File #:18-36 Agenda Date:4/11/2018 Version:1 Item #:2. Following all three interviews and a closed session,during which the Committee considered the price and terms proposed by each developer team,the Committee recommended selecting Ensemble Investments as the preferred developer for the project. DISCUSSION A discussion of Ensemble Investment’s proposal is provided below,as well as a brief description of the other respondents’proposals and a summary of the Exclusive Negotiating Rights Agreement prepared for City Council consideration. Ensemble Investments Proposal Ensemble has a strong presence in the Bay Area and brings over thirty years of experience building full and select service hotels.Some comparable Ensemble projects include:Hotel Nia Park in Menlo Park,Hyatt Place in Emeryville, Hyatt Place in Pasadena at The Paseo, and the Dream Inn in Santa Cruz. In preparation for submitting their proposal,Ensemble conducted preliminary stakeholder engagement, speaking with major biotech tenants in South San Francisco.They identified the need for a more iconic hotel with ample food and beverage service and meeting space.Ensemble’s preliminary concept (Attachment 4) meets these requirements.The program consists of a 243-room,7-story,full service,lifestyle hotel under the Hilton brand,or a comparable upper-upscale hotel.Examples include Hilton’s “Curio”or “Autograph”as well as Marriott’s “Tribute” hotel brands. The proposed hotel amenities consist of: ·meeting space totaling at least 11,500 square feet, ·a minimum of 4,000 square feet of food and beverage space,to include a three-meal restaurant,a fifty- seat lobby bar, and twenty-five seat pool bar, and ·1.5 acres of open space. Lifestyle hotels are considered “soft brands”under the Hilton family of hotels.Soft brands have more of an independent hotel atmosphere,appealing to a diverse group of guests that want a unique,iconic experience, beyond the normal full-service master branded corporate hotel.The benefit of being associated with the Hilton family of hotels is that these soft brands can take advantage of those travelers who utilize,and like to maximize, travel rewards programs. Following the Committee’s recommendation of Ensemble,staff contacted the references provided by Ensemble in their proposal. All verified Ensemble is a credible hotel developer and provided positive feedback. Proposals from Other Development Teams The two development teams not selected by the Committee following the interviews were JMA Ventures and Shashi Group.JMA Ventures proposed a two-hotel concept consisting of a 250-room full service or boutique hotel,and a 100-room extended stay hotel,under the brands of Westin/Le Meridien,Element,or Joie de Vivre. The program also included meeting space of 16,000 square feet,one full service restaurant,two fast casual restaurants,and outdoor recreational amenities and communal space.The Committee determined it was a good City of South San Francisco Printed on 4/5/2018Page 3 of 5 powered by Legistar™ File #:18-36 Agenda Date:4/11/2018 Version:1 Item #:2. project, but that its price and terms proposal was not competitive. The Shashi Group proposed a two-hotel concept,as well,with a 210-room,full service hotel and a 138-room extended stay hotel,under the Westin and Element brands.The program included meeting space of 9,400 square feet,two full service restaurants,one café,and outdoor and public space amenities.The Committee determined that the developer did not have the comparable experience in delivering the type of hotel desired for the site. Exclusive Negotiating Rights Agreement with Ensemble The execution of an Exclusive Negotiating Rights Agreement (ENRA)between the City and Ensemble will allow the City to begin negotiations with the developer on a Lease Disposition and Development Agreement (LDDA)and a Ground Lease Agreement,which will be brought to City Council for approval prior to the conclusion of the ENRA period. In preparation for Council’s consideration of approving Ensemble as the preferred developer for the hotel site at Oyster Point,staff prepared an ENRA which will terminate six months after execution,unless otherwise extended.During the term of the ENRA,Ensemble and the City will negotiate the terms of an LDDA and Ground Lease Agreement. Upon entering into the ENRA,Ensemble will pay a deposit of $100,000,which will be credited toward future ground lease payments.Additionally,Ensemble will pay a $25,000 fee to cover staff and City Attorney costs incurred in the negotiations of the LDDA and Ground Lease Agreement.If Ensemble requests and the City approves an extension of the ENRA term,an extension payment of $25,000 will be collected for each 90-day extension period. In addition to the deposit and payments for staff costs,the ENRA would require Ensemble to complete the following deliverables by the end of the six-month ENRA term: ·Complete schematic (35 percent) construction drawings; ·Negotiate terms of the lease disposition and development agreement,including a ground lease agreement for the property; ·Begin outreach to key stakeholder groups, in coordination with the City; ·Provide a revised pro forma, estimated project budget, and project schedule; ·Provide a short list of hotel brands that have indicated conditional interest in the site. The draft ENRA is attached as Attachment 2 to the associated resolution. CONCLUSION This report provides an overview of the hotel developer selection process for the hotel site at Oyster Point.For Council’s consideration is approval of the Committee’s recommendation of Ensemble Investments as the preferred developer for the site,as well as authorization for the City Manager to enter into an ENRA with Ensemble to begin negotiating an LDDA and Ground Lease Agreement.The LDDA,Ground Lease Agreement, City of South San Francisco Printed on 4/5/2018Page 4 of 5 powered by Legistar™ File #:18-36 Agenda Date:4/11/2018 Version:1 Item #:2. Ensemble to begin negotiating an LDDA and Ground Lease Agreement.The LDDA,Ground Lease Agreement, and all entitlements will return to the City Council for final approval. Attachments: 1.Site Map 2.Market Data Report 3.Request for Proposals 4.Ensemble Investments Proposal (non-confidential) City of South San Francisco Printed on 4/5/2018Page 5 of 5 powered by Legistar™ 14 2\ V W H U  3 R L Q W      6 S H F L ¿ F  3 O D Q  $ S S H Q G L [    ' H V L J Q  * X L G H O L Q H V  Se c t i o n 2 35 2 3 2 6 ( '  ' ( 9 ( / 2 3 0 ( 1 7 Fe b r u a r y 2 3 , 2 0 1 1 N 3U R S R V H G  ' H Y H O R S P H Q W  3 U R J U D P 7K H  S U R S R V H G  U H G H Y H O R S P H Q W  L Q  W K H  2 \ V W H U  3 R L Q W  6 S H F L ¿ F  3 O D Q  'L V W U L F W  Z L O O  H Q W D L O  D  W R W D O  D U H D  R I  D S S U R [ L P D W H O \     D F U H V  O R F DW H G  D W  WK H  H D V W H U Q  H Q G  R I  2 \ V W H U  3 R L Q W  % R X O H Y D U G  L Q  6 R X W K  6 D Q  ) U D Q F L V F R  &D O L I R U Q L D   7 K H  U H G H Y H O R S P H Q W  L V  L Q W H Q G H G  W R  L Q F O X G H  ‡ $  Q H Z  F R U S R U D W H  F D P S X V  Z K L F K  Z L O O  L Q F O X G H  R I ¿ F H  U H V H D U F K  DQ G  G H Y H O R S P H Q W  5 '  E X L O G L Q J V   V W U X F W X U H G  S D U N L Q J  D Q G  DF F H V V R U \  X V H V  D W  W K H  Z H V W H U Q  S R U W L R Q V  R I  W K H  V L W H  ‡ $  V L W H  W R  D F F R P P R G D W H  D  I X W X U H  K R W H O   U H V W D X U D Q W  D Q G  R U  U H W D L O ne a r t h e n e w F e r r y T e r m i n a l ‡ Pu b l i c O p e n S p a c e a n d B a y T r a i l I m p r o v e m e n t s ‡ Ma r i n a a n d F e r r y T e r m i n a l s e r v i n g a m e n i t i e s i n c l u d i n g p a r k i n g , VK X W W O H  G U R S  R I I  D U H D V  D Q G  Z D W H U V L G H  L P S U R Y H P H Q W V  To g e t h e r , t h e s e d e v e l o p m e n t c o m p o n e n t s a r e d e s c r i b e d a s t h e “P r o j e c t . ” T h e P r o j e c t i s i n t e n d e d t o b e d e v e l o p e d i n p h a s e s , a s GH V F U L E H G  L Q  6 H F W L R Q    , P S O H P H Q W D W L R Q  50 0 ’ Op e n Sp a c e 2I ¿ F H  5 ' Ph a s e I Op e n S p a c e F u t u r e H o t e l S i t e 2I ¿ F H  5 ' 3K D V H  , 9 2I ¿ F H  5 ' Ph a s e I I I 2I ¿ F H  5 ' Ph a s e I I Fe r r y Te r m i n a l 15 Se c t i o n 2 35 2 3 2 6 ( '  ' ( 9 ( / 2 3 0 ( 1 7 2\ V W H U  3 R L Q W      6 S H F L ¿ F  3 O D Q  $ S S H Q G L [    ' H V L J Q  * X L G H O L Q H V  Fe b r u a r y 2 3 , 2 0 1 1 Ex i s t i n g Pa r k i n g Ex i s t i n g Bo a t Ra m p Sh u t t l e B u s T u r n - a r o u n d / Dr o p - o f f a t F e r r y Fe r r y Te r m i n a l M arinaBlvd Oyster P o i n t B l v d Re c o n f i g u r e d Pa r k i n g Pr o p o s e d L a n d U s e s N 50 0 ’ /( * ( 1 ' 2I ¿ F H  5 '  & D P S X V Fu t u r e H o t e l S i t e Op e n S p a c e / B a y T r a i l I m p r o v e m e n t s Re c r e a t i o n / O p e n S p a c e Pr o p o s e d S t r e e t s Fu t u r e B a y T r a i l I m p r o v e m e n t s ([ L V W L Q J  % D \  7 U D L O  % L N H  3 D W K  1 R W  in S c o p e Ba y t r a i l REGIONAL ECONOMIC SUMMARY HOTEL MARKET SUMMARY San Francisco Forecast Summary YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR 201280.3%1.6%$171.6410.9%$137.7712.7% 201382.8%3.1%$187.339.1%$155.0212.5% 201484.0%1.5%$208.0811.1%$174.8312.8% 201584.4%0.5%$222.106.7%$187.497.2% 201684.3%-0.2%$230.823.9%$194.493.7% 2017F83.3%-1.2%$226.65-1.8%$188.69-3.0% 2018F82.7%-0.7%$230.611.7%$190.691.1% 2019F83.3%0.7%$237.262.9%$197.563.6% 2020F83.5%0.3%$244.543.1%$204.303.4% 2021F84.3%0.9%$252.373.2%$212.734.1% Source: CBRE Hotels' Americas Research, STR, Q3 2017 EXHIBIT 1**: Performance Grade vs. Long Run Average Source: CBRE Hotels' Americas Research, STR, Q3 2017 Source: CBRE Hotels' Americas Research, Q3 2017**See Appendix for exhibit descriptions DECEMBER 2017 -FEBRUARY 2018 EDITION -3 -2 -1 0 1 2 3 '12'13'14'15'16'17F'18F'19F'20F'21F Nu m b e r o f S t a n d a r d D e v i a t i o n s Occupancy ADR Change RevPAR Change HOTEL MARKET SUMMARYREGIONAL ECONOMIC SUMMARY SAN FRANCISCO San Francisco: Next 4 Quarters EXHIBIT 1**: Performance Grade vs. Long Run Average The arrows show the forecast direction of change over the next 4 quarters vs. the previous 4 quarters. Green indicates the change will be above the long run average, yellow indicates it will be the same, and orange indicates it will be below. San Francisco Forecast Summary Long Run Averages 1988 to 2016 Occupancy: 73.8%, ADR Change: 4.0%, RevPAR Change: 4.8% DECEMBER 2017 -FEBRUARY 2018 EDITION PRICE: $545VOLUME XI -ISSUE IV Occupancy Average Daily Rate Revenue Per Available Room Supply (orangeindicates above long-term average) Demand DECEMBER 2017 -FEBRUARY 2018 EDITION PRICE: $545VOLUME XI -ISSUE IV “Economic activity in the Twelfth District continued to expand at a moderate pace during the reporting period of mid-August through September. Overall price inflation was flat and remained low, while upward wage pressures strengthened somewhat, and labor market conditions tightened further. Sales of retail goods picked up, and growth in consumer and business services remained strong. Conditions in the manufacturing sector improved, while activity in the agriculture sector was flat. Lending activity grew at a moderate pace. Retail sales picked up over the reporting period. Demand for entertainment services was strong, and one contact reported that technological gains and favorable tax conditions spurred investment. Demand in the hospitality industry slowed slightly from its strong pace over the summer, and contacts expect hotel stays to soften a bit more over the remainder of the year. Real estate market activity continued to grow at a strong pace. On balance, commercial construction activity continued to expand at a moderate pace. In Eastern Washington, permits for commercial construction were up over the same period last year. Contacts in Southern California reported that construction of hotel and retail spaces were at an all-time high." Federal Reserve Bank Beige Book, October 2017 By year-end 2017, San Francisco hotels are forecast to see a RevPAR decrease of 3.0%. This is the result of an estimated decline in occupancy of 1.2% and a 1.8% loss in average daily room rates (ADR). The 3.0% decline in San Francisco RevPAR is less than the national projection of a 2.9% increase. Both the upper and lower-priced segments of San Francisco are expected to show negative RevPAR change by year end. Lower-priced hotels are forecast to suffer a 0.9% loss in ADR and a 1.0% decrease in occupancy, resulting in a 1.9% RevPAR decline. Upper-priced hotels are projected to experience an ADR decline of 2.0%, along with a 1.3% loss in occupancy, resulting in a 3.3% RevPAR decline. Looking towards 2018, San Francisco RevPAR is expected to grow 1.1%, reversing the downward trend of 2017. Prospects for RevPAR growth in the lower-priced segment (positive 1.1%) are better than in the upper-priced segment (positive 0.8%). San Francisco market occupancy levels are expected to range from 82.7% to 84.3% during the 5-year forecast period. Occupancy will decrease to 82.7%, a decline over the past 4 quarters' rate of 83.4%, but above the long run average of 73.8% ADR growth expectations are increasing, positive 1.2% vs. the past 4 quarters' rate of negative 1.8%, but are below the long run average of positive 4.0% RevPAR growth projections are climbing to 0.4% as compared to the past 4 quarters' rate of negative 3.0%, but are lower than the long run average of positive 4.8% Supply growth is climbing, 2.3% vs. the past 4 quarters' rate of 0.2%, and greater than the long run average of 0.8% Forecast demand growth is climbing, positive 1.5% vs. the past 4 quarters' rate of negative 1.1%, and is greater than the long run average of positive 1.3% Se e u s e a n d d i s t r i b u t i o n r e s t r i c t i o n s o n t h e l a s t p a g e o f t h i s r e p o r t . D o w n l o a d e d b y J u l i e P u r n e l l , C B R E H o t e l s ' R e s e a r c h San Francisco Economic Summary *See Appendix for exhibit descriptions P. 2 / CBRE HOTELS' AMERICAS RESEARCH Below are a select number of variables that drive the CBRE Hotels | Americas Research econometric forecasts contained in this report. Income and employment are important barometers of economic health and are used in every Hotel Horizons ® forecast model. The lodging market is part of the larger economy, and the forces that affect us nationally also affect lodging, but in different magnitudes and time periods (see Exhibits 4 and 5 below). Exhibits 2 - 6 provide an overview of current economic history and forecast, and provide explanation of what to expect in the future, and how that affects the lodging industry. 1.0% 2.6%2.7% 3.1% 0.7% 1.6% 2.4% 3.4% 0% 1% 2% 3% 4% Change in Total EmploymentChange in Consumer Price IndexChange in Gross Metro ProductChange in Real Personal Income San Francisco 1988 to 2016 San Francisco 2017 to 2021 -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% '99'01'03'05'07'09'11'13'15'17'19'21 Real Personal Income -10.0% -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% '99'01'03'05'07'09'11'13'15'17'19'21 Total Payroll Employment Employment (Left)Demand (Right) Source: CBRE EA, Moody's Analytics, Q3 2017 Source: CBRE EA, Q3 2017 Source: CBRE EA, Q3 2017 Income (Left)RevPAR (Right) Source: CBRE EA, CBRE Hotels, STR, Q3 2017 Source: CBRE EA, CBRE Hotels, STR, Q3 2017 Exhibit 3*: Employment ChangeExhibit 2*: Income Change Exhibit 4*: Quarterly Income vs. RevPAR Change Exhibit 5*: Quarterly Employment vs. Demand Change Exhibit 6*: Average Annual Growth Rates See graph below See graph below DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEOHOTEL HORIZONS® San Francisco Hotel Summary The graphs on the left illustrate the magnitude of change in performance during the historical and forecasted period 2012 to 2021. Used as a relative benchmark, each market segment is plotted against a common index value of 2012 = 100. This method provides clear insight of how each market segment performed and is expected to perform in relation to others in the specified period. The charts on the right compare near-term historical compound annual growth rates (CAGR) to the CAGRs for the forecast period. P. 3 / CBRE HOTELS' AMERICAS RESEARCH 100 110 120 130 140 150 160 All U.S.Upper-Priced Hotels Lower-Priced Hotels All Hotels 100 110 120 130 140 150 160 170 All U.S.Upper-Priced Hotels Lower-Priced Hotels All Hotels 100 101 102 103 104 105 106 107 108 109 110 All U.S.Upper-Priced Hotels Lower-Priced Hotels All Hotels 0.1% 0.5% -0.7% 2.0% 2.3% 1.2% -1.0% 0.0% 1.0% 2.0% 3.0% All HotelsUpper-PricedLower-Priced Past 5 Years Next 5 Years Source: CBRE Hotels, STR, Q3 2017 9.0%8.6% 9.8% 3.0%2.9%3.1% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% All HotelsUpper-PricedLower-Priced Past 5 Years Next 5 Years 1.3% 1.8% 0.3% 2.3% 2.5% 1.7% 0.0% 1.0% 2.0% 3.0% All HotelsUpper-PricedLower-Priced Past 5 Years Next 5 Years Exhibit 8*: ADR Change Exhibit 10*: Compound Average Annual Supply Change Exhibit 11*: Compound Average Annual Demand Change Exhibit 9*: RevPAR Change Exhibit 12*: Compound Average Annual RevPAR Change Exhibit 7*: Occupancy Change DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEOHOTEL HORIZONS® *See Appendix for exhibit descriptions Source: CBRE Hotels, STR, Q3 2017 Source: CBRE Hotels, STR, Q3 2017 *See Appendix for exhibit descriptions Source: CBRE Hotels, STR, Q3 2017 Source: CBRE Hotels, STR, Q3 2017 Source: CBRE Hotels, STR, Q3 2017 San Francisco Forecast - All Hotels YEARPERIODOCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR Δ SUPPLY Δ DEMAND 2012Annual80.3%1.6%$171.6410.9%$137.7712.7%-0.1%1.5% 2013Annual82.8%3.1%$187.339.1%$155.0212.5%-0.3%2.8% 2014176.8%4.8%$186.5912.5%$143.3817.9%-1.0%3.8% 2014286.8%0.1%$203.0811.1%$176.3511.2%-0.6%-0.5% 2014391.2%0.8%$227.3311.2%$207.2212.1%0.1%0.8% 2014481.2%0.9%$212.0610.0%$172.2411.0%0.2%1.1% 2014Annual84.0%1.5%$208.0811.1%$174.8312.8%-0.3%1.2% 2015178.8%2.5%$207.8511.4%$163.7114.2%0.3%2.9% 2015287.5%0.7%$218.287.5%$190.978.3%0.3%1.0% 2015390.4%-0.9%$240.886.0%$217.665.0%0.4%-0.4% 2015481.0%-0.2%$219.043.3%$177.483.0%0.2%0.0% 2015Annual84.4%0.5%$222.106.7%$187.497.2%0.3%0.8% 2016180.4%2.0%$235.0113.1%$188.8515.4%0.8%2.9% 2016287.2%-0.4%$230.935.8%$201.265.4%0.9%0.6% 2016389.2%-1.2%$238.03-1.2%$212.42-2.4%0.6%-0.7% 2016480.3%-0.9%$218.51-0.2%$175.43-1.2%0.7%-0.2% 2016Annual84.3%-0.2%$230.823.9%$194.493.7%0.8%0.6% 2017179.0%-1.7%$234.62-0.2%$185.30-1.9%-0.5%-2.2% 2017285.4%-2.0%$216.48-6.3%$184.83-8.2%-0.1%-2.1% 2017388.8%-0.5%$237.54-0.2%$211.00-0.7%0.6%0.1% 2017F479.8%-0.6%$217.58-0.4%$173.57-1.1%0.8%0.2% 2017FAnnual83.3%-1.2%$226.65-1.8%$188.69-3.0%0.2%-1.0% 2018FAnnual82.7%-0.7%$230.611.7%$190.691.1%2.8%2.1% 2019FAnnual83.3%0.7%$237.262.9%$197.563.6%1.7%2.4% 2020FAnnual83.5%0.3%$244.543.1%$204.303.4%1.7%2.0% 2021FAnnual84.3%0.9%$252.373.2%$212.734.1%1.7%2.6% 2016 3QYear to Date85.6%0.0%$234.685.2%$200.865.3%0.8%0.8% 2017 3QYear to Date84.4%-1.4%$229.53-2.2%$193.77-3.5%0.0%-1.4% 2017 3QTrailing 4 Qtrs83.4%-1.3%$226.88-1.8%$189.18-3.0%0.2%-1.1% Source: CBRE Hotels' Americas Research, STR, Q3 2017 Exhibit 13*: San Francisco Standardized Changes in Real RevPAR Movements Over Time Source: CBRE Hotels' Americas Research, STR, Q3 2017 *See Appendix for exhibit description P. 4 / CBRE HOTELS' AMERICAS RESEARCH -4 -3 -2 -1 0 1 2 3 198919911993199519971999200120032005200720092011201320152017F2019F2021F Nu m b e r o f S t a n d a r d D e v i a t i o n s U.S.San Francisco Exhibit 13*: San Francisco Standardized Changes in Real RevPAR Movements Over Time DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEOHOTEL HORIZONS® San Francisco Forecast - Upper-Priced Hotels YEARPERIODOCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR Δ SUPPLY Δ DEMAND 2012Annual80.9%0.7%$196.0010.4%$158.6511.2%0.4%1.1% 2013Annual83.7%3.4%$213.368.9%$178.5012.5%0.4%3.7% 2014177.8%3.9%$215.6112.1%$167.7616.5%-0.2%3.7% 2014286.8%-1.3%$230.4710.9%$200.029.5%0.2%-1.0% 2014391.0%0.8%$254.6710.6%$231.8411.6%0.5%1.4% 2014482.1%0.7%$240.879.5%$197.8110.2%0.5%1.2% 2014Annual84.5%0.9%$236.1410.7%$199.4211.7%0.3%1.2% 2015178.6%1.0%$240.2411.4%$188.8712.6%0.5%1.6% 2015287.4%0.8%$246.777.1%$215.797.9%0.3%1.0% 2015390.4%-0.7%$268.455.4%$242.704.7%0.2%-0.5% 2015482.1%0.0%$247.372.7%$203.162.7%0.0%0.0% 2015Annual84.7%0.2%$251.216.4%$212.666.6%0.3%0.5% 2016181.5%3.7%$269.0412.0%$219.2916.1%1.0%4.8% 2016287.8%0.5%$259.245.1%$227.725.5%1.2%1.6% 2016389.9%-0.5%$263.19-2.0%$236.70-2.5%1.0%0.4% 2016481.7%-0.6%$245.25-0.9%$200.26-1.4%1.1%0.5% 2016Annual85.2%0.7%$259.263.2%$220.993.9%1.1%1.8% 2017179.8%-2.1%$268.85-0.1%$214.64-2.1%-0.7%-2.8% 2017286.0%-2.1%$242.62-6.4%$208.61-8.4%-0.1%-2.2% 2017389.5%-0.5%$262.12-0.4%$234.61-0.9%0.8%0.3% 2017F481.2%-0.5%$242.78-1.0%$197.15-1.5%1.0%0.5% 2017FAnnual84.1%-1.3%$254.01-2.0%$213.75-3.3%0.2%-1.0% 2018FAnnual83.7%-0.6%$257.491.4%$215.390.8%3.5%2.9% 2019FAnnual84.3%0.8%$264.682.8%$223.183.6%1.9%2.7% 2020FAnnual84.4%0.1%$273.073.2%$230.433.2%1.9%1.9% 2021FAnnual84.9%0.6%$282.123.3%$239.604.0%1.9%2.5% 2016 3QYear to Date86.4%1.1%$263.684.5%$227.925.6%1.1%2.2% 2017 3QYear to Date85.1%-1.5%$257.63-2.3%$219.35-3.8%0.0%-1.5% 2017 3QTrailing 4 Qtrs84.3%-1.3%$254.63-2.0%$214.57-3.2%0.3%-1.0% Source: CBRE Hotels' Americas Research, STR, Q3 2017 FULL-SERVICE HOTELS - PERCENT OF TOTAL REVENUE - 2016 Financial Line Item Mountain / Pacific Region ADR Over $250†150 to 300 Rooms‡ Rooms Revenue 70.5%66.2%72.8% Food and Beverage Revenue 24.3%27.7%22.6% Total Departmental Expenses 38.8%44.8%37.1% Total Departmental Profit 61.2%55.2%62.9% Total Undistributed Expenses 23.1%22.9%26.1% Gross Operating Profit**38.1%32.3%36.8% *Data from 2017 Trends ® in the Hotel Industry report †San Francisco Upper-Price Average ADR: $259.26 **Before deductions for management fees and non-operating income and expenses.‡San Francisco Upper-Price Average Size: 220 Rooms Source: CBRE Hotels' Americas Research, 2016 For a more comparable and detailed financial comparison, we recommend a BenchmarkerSM report. Please contact Viet Vo at +1 404 812 5112 for more information. P. 5 / CBRE HOTELS' AMERICAS RESEARCH San Francisco Financial Benchmarks* -Full-Service Hotels HOTEL HORIZONS®DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEO San Francisco Forecast - Lower-Priced Hotels YEARPERIODOCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR Δ SUPPLY Δ DEMAND 2012Annual78.8%3.7%$116.5213.7%$91.7817.9%-1.2%2.5% 2013Annual80.7%2.4%$126.708.7%$102.2511.4%-1.7%0.7% 2014174.6%7.0%$117.8514.2%$87.9622.1%-2.8%4.0% 2014287.0%3.2%$140.3613.1%$122.0516.7%-2.3%0.8% 2014391.4%0.6%$164.6912.5%$150.5613.1%-0.9%-0.4% 2014479.2%1.4%$143.4512.0%$113.5413.6%-0.4%1.0% 2014Annual83.0%2.9%$142.7112.6%$118.5015.9%-1.6%1.2% 2015179.1%6.0%$134.2313.9%$106.1720.7%-0.1%5.9% 2015287.6%0.7%$153.029.0%$134.019.8%0.2%0.9% 2015390.3%-1.3%$177.838.0%$160.516.6%1.0%-0.3% 2015478.5%-0.8%$151.385.5%$118.834.7%0.5%-0.3% 2015Annual83.9%1.0%$154.928.6%$129.929.6%0.4%1.4% 2016177.7%-1.8%$152.8113.8%$118.7511.8%0.3%-1.4% 2016285.6%-2.3%$163.727.0%$140.074.5%0.4%-1.9% 2016387.6%-2.9%$178.310.3%$156.26-2.7%-0.4%-3.3% 2016477.1%-1.8%$153.031.1%$118.02-0.7%-0.2%-1.9% 2016Annual82.0%-2.2%$162.524.9%$133.272.6%0.0%-2.2% 2017177.0%-0.9%$153.540.5%$118.25-0.4%0.0%-0.9% 2017284.0%-1.8%$154.65-5.5%$129.88-7.3%0.0%-1.8% 2017387.3%-0.4%$178.910.3%$156.11-0.1%0.2%-0.2% 2017F476.4%-0.9%$155.191.4%$118.630.5%0.3%-0.6% 2017FAnnual81.2%-1.0%$161.04-0.9%$130.72-1.9%0.1%-0.9% 2018FAnnual80.4%-0.9%$164.362.1%$132.161.1%1.0%0.1% 2019FAnnual80.7%0.4%$169.062.9%$136.523.3%1.3%1.7% 2020FAnnual81.5%1.0%$173.792.8%$141.703.8%1.3%2.2% 2021FAnnual82.8%1.5%$178.772.9%$147.974.4%1.3%2.8% 2016 3QYear to Date83.6%-2.4%$165.446.0%$138.363.5%0.1%-2.3% 2017 3QYear to Date82.8%-1.0%$162.84-1.6%$134.76-2.6%0.1%-1.0% 2017 3QTrailing 4 Qtrs81.3%-1.2%$160.52-1.0%$130.58-2.2%0.0%-1.2% Source: CBRE Hotels' Americas Research, STR, Q3 2017 LIMITED-SERVICE HOTELS - PERCENT OF TOTAL REVENUE - 2016 Financial Line Item Mountain / Pacific Region ADR Over $115†Under 100 Rooms‡ Rooms Revenue 97.5%97.1%98.4% Food and Beverage Revenue 0.0%0.0%0.0% Total Departmental Expenses 25.5%23.2%26.6% Total Departmental Profit 74.5%76.8%73.4% Total Undistributed Expenses 26.9%27.9%31.0% Gross Operating Profit**47.5%48.9%42.4% *Data from 2017 Trends ® in the Hotel Industry report †San Francisco Lower-Price Average ADR: $162.52 **Before deductions for management fees and non-operating income and expenses.‡San Francisco Lower-Price Average Size: 68 Rooms Source: CBRE Hotels' Americas Research, 2016 For a more comparable and detailed financial comparison, we recommend a BenchmarkerSM report. Please contact Viet Vo at +1 404 812 5112 for more information. P. 6 / CBRE HOTELS' AMERICAS RESEARCH San Francisco Financial Benchmarks* -Limited-Service Hotels DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEOHOTEL HORIZONS® San Francisco Airbnb Summary Figure 1: October 2016 – September 2017 Airbnb Performance METRIC 2017Y-o-Y CHANGE Occupancy64.0%3.5% ADR$194.340.5% RevPAR$124.304.1% Available Supply2,325,39714.8% Units Sold1,487,49618.8% Total Revenue$289,205,97619.5% Source: Airdna, CBRE Hotels' Americas Research, Q3 2017 Figure 3: October 2016 – September 2017 Active Units by Month Figure 4: October 2016 – September 2017 ADRs by Unit Type and Bedroom Count Detailed Report on Airbnb data for any U.S. Market Can be found at: https://pip.cbrehotels.com/airbnbinsights P. 7 / CBRE HOTELS' AMERICAS RESEARCH Below is an overview of Airbnb’s presence in this market. The estimates of Airbnb performance come from Airdna, a firm that provides data and analytics on Airbnb rental performance for 4 million+ Airbnb listings worldwide. Figure 1 shows the total number of units available, sold and revenue generated during from July 2016 – June 2017 along with the calculated Occupancy, Average Daily Rate(ADR), RevPAR, and year-over-year growth rates. Figure 2 shows the percent of units and revenue by unit type. Figure 3 shows the average daily number of active Airbnb units by month. Figure 4 lists the ADRs broken down by unit types and number of bed rooms over the past 12 months. More detailed reports on Airbnb performance in this market can be found at https://pip.cbrehotels.com/airbnbinsights. Figure 2: Percent of Active Units and Revenue by Listing Type 58.0% 38.7% 3.3% 2017 TTM Active Units 77.7% 21.6% 0.8% 2017 TTM Revenue -20% -10% 0% 10% 20% 30% 40% 50% 60% 0 2,000 4,000 6,000 8,000 10,000 OCT 2016NOV 2016DEC 2016JAN 2017FEB 2017MAR 2017APR 2017MAY 2017JUN 2017JUL 2017AUG 2017SEP 2017 Y- O - Y C h a n g e Ac t i v e U n i t s Active Units Y-o-Y Change $180.23 $279.71 $401.42 $641.98 $106.44 $51.65 0200400600800 1 2 3 4+ En t i r e h o m e / a p t Pr i v a t e ro o m Sh a r e d ro o m Bedrooms 2017 Average Daily Rate ($)Glossary Active Units -a unit is considered active if it had at least one night sold during the month Average Daily Rate (ADR)-The revenue collected divided by the units sold. Bedrooms -The number of rooms that are available within each unit. Unit Types: Entire Home -The guest has complete and sole access to the entire Unit during the stay. Private Room -The guest has their own sleeping area, but shares access to the Unit common areas with others. Shared Room -The guest rents a common area, like an airbed in a living room. DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEOHOTEL HORIZONS® Entire Home/Apt Private Room Shared Room National Horizon Profile 2 Albany 3 Dayton 3 Milwaukee 2 Raleigh-Durham 2 Albuquerque 1 Denver 2 Minneapolis 3 Richmond 2 Anaheim 2 Detroit 2 Nashville 3 Sacramento 2 Atlanta 2 Fort Lauderdale 2 New Orleans 2 Saint Louis 2 Austin 2 Fort Worth 1 New York 3 Salt Lake City 2 Baltimore 2 Hartford 2 Newark 3 San Antonio 2 Boston 1 Houston 2 Norfolk-VA Beach 3 San Diego 1 Charleston 2 Indianapolis 3 Oahu 2 San Francisco 2 Charlotte 3 Jacksonville 2 Oakland 2 San Jose-Santa Cruz 3 Chicago 2 Kansas City 1 Omaha 1 Savannah 3 Cincinnati 2 Long Island 2 Orlando 1 Seattle 2 Cleveland 2 Los Angeles 2 Philadelphia 2 Tampa 3 Columbia 3 Louisville 2 Phoenix 3 Tucson 3 Columbus 2 Memphis 1 Pittsburgh 2 Washington DC 2 Dallas 2 Miami 2 Portland 2 West Palm Beach Less Than 0%Between 0% and 3%Greater Than 3% Source: CBRE Hotels' Americas Research, STR, Q3 2017 This page showcases the CBRE Hotels' Americas Research Hotel Horizons ® forecasting universe. The map below displays average RevPAR change for 2018. Quarterly Hotel Horizons ® reports are available for the nation and all the markets shown below. P. 8 | CBRE HOTELS' AMERICAS RESEARCH DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEO 2018 Average Annual RevPAR Change https://pip.cbrehotels.com HOTEL HORIZONS® San Francisco Market Profile Total Room Supply:52,408 UPPER-PRICED BRANDS PROPERTIESROOMS% MARKETLOWER-PRICED BRANDS PROPERTIESROOMS% MARKET Hilton 43,8867.4%Holiday Inn 51,8653.6% Marriott 53,3486.4%Best Western Plus 78391.6% Westin 32,2734.3%Travelodge 74940.9% Courtyard 91,6523.2%Extended Stay America 44730.9% Hyatt Regency 21,5933.0%Comfort Inn 54400.8% Source: STR, Q3 2017 PHASE PROPERTIESROOMS% MARKETPROPERTIESROOMS% MARKETPROPERTIESROOMS% MARKET Unconfirmed 000.0%24180.8%000.0% Planning 193,5736.8%55581.1%1750.1% Final Planning 101,4442.8%45031.0%000.0% In Construction 81,5823.0%32210.4%000.0% Total 376,59912.6%141,7003.2%1750.1% Source: STR, CBRE Hotels' Americas Research, Q3 2017 Source: STR, Q3 2017 *Formerly Pre-Planning P. 9 / CBRE HOTELS' AMERICAS RESEARCH Unclassified / IndependentUpper-PricedLower-Priced San Francisco Top Brands San Francisco Supply Pipeline Pipeline Status Definitions DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEOHOTEL HORIZONS® Unconfirmed*Potential projects that remain unconfirmed at this time. STR is unable to verify the existence of these projects through a corporate chain feed or other verifiable source. Planning Confirmed, under contract projects where construction will begin in more than 12 months. Final Planning Confirmed, under contract projects where construction will begin within the next 12 months. In Construction Vertical construction on the physical building has begun. This does not include construction on any sub-grade structures including, but not limited to, parking garages, underground supports/footers or any other type of sub-grade construction. PHASE DEFINITION San Francisco Submarket Map Total Room Supply:52,408 Source: CBRE EA, Q3 2017 PropertiesRooms% MarketPropertiesRooms% MarketPropertiesRooms% Market Airport215,39510.3%403,5476.8%618,94217.1% Market Street5115,53429.6%383,1286.0%8918,66235.6% Nob Hill / Wharf5410,52320.1%744,7639.1%12815,28629.2% San Mateo / Redwood City173,0385.8%342,2594.3%515,29710.1% Extended Area242,2844.4%441,9373.7%684,2218.1% Total16736,77470.2%23015,63429.8%39752,408100.0% Source: STR, Q3 2017 P. 10 / CBRE HOTELS' AMERICAS RESEARCH UPPER-PRICEDLOWER-PRICEDTOTALSSUBMARKET San Francisco Submarket Summary DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEOHOTEL HORIZONS® Submarket Profile - Airport Total Room Supply:8,942 Airport Submarket Inventory UPPER-PRICED PROPERTIESROOMS%SUBMKTLOWER-PRICED PROPERTIESROOMS%SUBMKT Inventory 215,39560.3%Inventory 403,54739.7% UPPER-PRICED BRANDS BY SHAREPROPERTIESROOMS%SUBMKTLOWER-PRICED BRANDS BY SHAREPROPERTIESROOMS%SUBMKT Hyatt Regency 17898.8%Best Western Plus 24254.8% Marriott 16887.7%Holiday Inn 23964.4% Embassy Suites 26527.3%La Quinta Inns & Suites 22713.0% Airport Construction Pipeline Source: STR, Q3 2017 PHASE PROPERTIESROOMS%SUBMKTPROPERTIESROOMS%SUBMKTPROPERTIESROOMS%SUBMKT Unconfirmed 000.0%000.0%000.0% Planning 000.0%1861.0%000.0% Final Planning 23283.7%11551.7%000.0% In Construction 13503.9%11101.2%000.0% TOTAL 36787.6%33513.9%000.0% Source: STR, CBRE Hotels' Americas Research, Q3 2017 Airport Performance - All Hotels All Hotels Penetration vs. Market Total YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR YEAROCCADRREVPAR 201282.0%-$121.80-$99.91-2012102.2%71.0%72.5% 201383.7%2.1%$132.719.0%$111.1011.2%2013101.2%70.8%71.7% 201484.8%1.3%$150.7113.6%$127.7615.0%2014100.9%72.4%73.1% 201585.8%1.2%$167.0510.8%$143.2912.2%2015101.6%75.2%76.4% 201684.1%-1.9%$174.494.5%$146.802.5%201699.8%75.6%75.5% 3Q16 YTD85.3%-2.2%$177.285.4%$151.253.1%3Q16 YTD99.7%75.5%75.3% 3Q17 YTD85.8%0.6%$177.04-0.1%$151.970.5%3Q17 YTD101.7%77.1%78.4% Airport Performance - Upper-Priced Hotels Source: STR, Q3 2017 YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR 201281.6%-$139.25-$113.57- 201383.8%2.7%$152.399.4%$127.6912.4% 201484.5%0.8%$173.0913.6%$146.2414.5% 201586.2%2.0%$191.7710.8%$165.3413.1% 201685.4%-0.9%$199.354.0%$170.263.0% 3Q16 YTD86.3%-1.1%$202.094.8%$174.503.6% 3Q17 YTD87.8%1.7%$201.32-0.4%$176.771.3% Airport Performance - Lower-Priced Hotels YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR 201282.7%-$97.70-$80.77- 201383.6%1.1%$104.166.6%$87.097.8% 201485.2%1.9%$118.0613.3%$100.5615.5% 201585.1%0.0%$130.7310.7%$111.3010.7% 201682.3%-3.4%$136.534.4%$112.310.9% 3Q16 YTD83.8%-3.9%$139.695.6%$117.061.5% 3Q17 YTD82.9%-1.0%$139.28-0.3%$115.53-1.3% Source: STR, Q3 2017 Source: STR, Q3 2017 P. 11 / CBRE HOTELS' AMERICAS RESEARCH UNCLASSIFIED/INDEPENDENT Submarket Rank* 78%2 *SubmarketRevPARpenetrationexpressedasapercentage ofthemarketRevPARfortheprevious4quarters. Directionofarrowindicatesifpenetrationisincreasingor decreasing relative to one year ago's performance. UPPER-PRICED LOWER-PRICED Out of 5 *Based on RevPAR change over the last 4 quarters. Submarket Penetration* The San Francisco Airport submarket consists of the hotels located near the San Francisco International Airport in San Mateo County. The hotels in this lodging submarket are located in such cities as Burlingame, Milbrae, and South San Francisco. 65 85 105 20122013201420152016 Market ADROcc RevPAR 80 90 100 110 20122013201420152016 Upper-Priced Penetration vs. Market Total Lower-Priced Penetration vs. Market Total DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEOHOTEL HORIZONS® Submarket Profile - Market Street Total Room Supply:18,662 Market Street Submarket Inventory UPPER-PRICED PROPERTIESROOMS%SUBMKTLOWER-PRICED PROPERTIESROOMS%SUBMKT Inventory 5115,53483.2%Inventory 383,12816.8% UPPER-PRICED BRANDS BY SHAREPROPERTIESROOMS%SUBMKTLOWER-PRICED BRANDS BY SHAREPROPERTIESROOMS%SUBMKT Hilton 22,94315.8%Holiday Inn 13882.1% Westin 21,87610.1%Best Western Plus 11430.8% Marriott 11,5008.0%Travelodge 1840.5% Market Street Construction Pipeline Source: STR, Q3 2017 PHASE PROPERTIESROOMS%SUBMKTPROPERTIESROOMS%SUBMKTPROPERTIESROOMS%SUBMKT Unconfirmed 000.0%13001.6%000.0% Planning 122,64814.2%11811.0%1750.4% Final Planning 34972.7%000.0%000.0% In Construction 24282.3%000.0%000.0% TOTAL 173,57319.1%24812.6%1750.4% Source: STR, CBRE Hotels' Americas Research, Q3 2017 Market Street Performance - All Hotels All Hotels Penetration vs. Market Total YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR YEAROCCADRREVPAR 201280.4%-$194.66-$156.44-2012100.1%113.4%113.6% 201383.6%4.0%$213.089.5%$178.1013.8%2013101.0%113.7%114.9% 201484.5%1.1%$238.0711.7%$201.1612.9%2014100.6%114.4%115.1% 201584.9%0.5%$251.135.5%$213.236.0%2015100.6%113.1%113.7% 201685.7%0.9%$256.972.3%$220.113.2%2016101.7%111.3%113.2% 3Q16 YTD87.0%1.4%$261.633.7%$227.535.1%3Q16 YTD101.6%111.5%113.3% 3Q17 YTD85.9%-1.2%$252.94-3.3%$217.27-4.5%3Q17 YTD101.8%110.2%112.1% Market Street Performance - Upper-Priced Hotels Source: STR, Q3 2017 YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR 201280.9%-$209.07-$169.06- 201384.3%4.3%$227.288.7%$191.6713.4% 201485.0%0.8%$252.3211.0%$214.4211.9% 201585.3%0.4%$266.045.4%$226.995.9% 201686.0%0.8%$271.462.0%$233.562.9% 3Q16 YTD87.3%1.5%$276.543.4%$241.354.9% 3Q17 YTD86.0%-1.5%$267.64-3.2%$230.05-4.7% Market Street Performance - Lower-Priced Hotels YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR 201278.1%-$127.35-$99.46- 201380.1%2.5%$142.9512.3%$114.4715.1% 201482.1%2.5%$165.1615.5%$135.5718.4% 201582.9%1.0%$177.127.2%$146.838.3% 201683.8%1.1%$185.374.7%$155.395.8% 3Q16 YTD85.5%0.7%$188.456.2%$161.087.0% 3Q17 YTD85.6%0.2%$182.40-3.2%$156.22-3.0% Source: STR, Q3 2017 Source: STR, Q3 2017 UPPER-PRICED LOWER-PRICED UNCLASSIFIED/INDEPENDENT P. 12 / CBRE HOTELS' AMERICAS RESEARCH Submarket Rank*Submarket Penetration* 4112% Out of 5 *SubmarketRevPARpenetrationexpressedasapercentage ofthemarketRevPARfortheprevious4quarters. Directionofarrowindicatesifpenetrationisincreasingor decreasing relative to one year ago's performance. *Based on RevPAR change over the last 4 quarters. The San Francisco Market Street lodging submarket consists of the hotels located near the Moscone Convention Center, in the Financial District, and around Union Square. 95 100 105 110 20122013201420152016 95 105 115 125 20122013201420152016 Upper-Priced Penetration vs. Market Total Lower-Priced Penetration vs. Market Total DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEOHOTEL HORIZONS® Market ADROcc RevPAR Submarket Profile - Nob Hill / Wharf Total Room Supply:15,286 Nob Hill / Wharf Submarket Inventory UPPER-PRICED PROPERTIESROOMS%SUBMKTLOWER-PRICED PROPERTIESROOMS%SUBMKT Inventory 5410,52368.8%Inventory 744,76331.2% UPPER-PRICED BRANDS BY SHAREPROPERTIESROOMS%SUBMKTLOWER-PRICED BRANDS BY SHAREPROPERTIESROOMS%SUBMKT Hyatt Regency 18045.3%Holiday Inn 21,0817.1% Marriott 26854.5%Comfort Inn 11380.9% Joie De Vivre 56624.3%Travelodge 31220.8% Nob Hill / Wharf Construction Pipeline Source: STR, Q3 2017 PHASE PROPERTIESROOMS%SUBMKTPROPERTIESROOMS%SUBMKTPROPERTIESROOMS%SUBMKT Unconfirmed 000.0%000.0%000.0% Planning 57154.7%1150.1%000.0% Final Planning 1560.4%000.0%000.0% In Construction 22551.7%000.0%000.0% TOTAL 81,0266.7%1150.1%000.0% Source: STR, CBRE Hotels' Americas Research, Q3 2017 Nob Hill / Wharf Performance - All Hotels All Hotels Penetration vs. Market Total YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR YEAROCCADRREVPAR 201282.3%-$186.38-$153.36-2012102.5%108.6%111.3% 201384.2%2.4%$205.0210.0%$172.6712.6%2013101.8%109.4%111.4% 201485.5%1.5%$225.7510.1%$193.0411.8%2014101.8%108.5%110.4% 201584.9%-0.7%$239.045.9%$202.965.1%2015100.6%107.6%108.3% 201685.1%0.3%$248.494.0%$211.544.2%2016101.0%107.7%108.8% 3Q16 YTD86.4%0.7%$253.595.3%$219.076.0%3Q16 YTD100.9%108.1%109.1% 3Q17 YTD84.2%-2.6%$246.36-2.9%$207.33-5.4%3Q17 YTD99.7%107.3%107.0% Nob Hill / Wharf Performance - Upper-Priced Hotels Source: STR, Q3 2017 YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR 201283.3%-$210.28-$175.16- 201385.7%2.9%$230.359.5%$197.3712.7% 201486.1%0.5%$253.149.9%$218.0210.5% 201585.0%-1.3%$265.905.0%$225.973.6% 201686.8%2.2%$274.313.2%$238.175.4% 3Q16 YTD88.0%2.7%$279.934.5%$246.237.3% 3Q17 YTD85.1%-3.2%$273.24-2.4%$232.59-5.5% Nob Hill / Wharf Performance - Lower-Priced Hotels YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR 201280.2%-$135.43-$108.61- 201381.1%1.2%$148.509.7%$120.4710.9% 201484.2%3.8%$165.9211.7%$139.7016.0% 201584.8%0.7%$180.458.8%$152.949.5% 201681.4%-4.0%$187.934.1%$152.960.0% 3Q16 YTD82.9%-3.6%$192.155.1%$159.331.3% 3Q17 YTD82.0%-1.1%$185.06-3.7%$151.82-4.7% Source: STR, Q3 2017 Source: STR, Q3 2017 UPPER-PRICED LOWER-PRICED UNCLASSIFIED/INDEPENDENT P. 13 / CBRE HOTELS' AMERICAS RESEARCH Submarket Rank*Submarket Penetration* 5107% Out of 5 *SubmarketRevPARpenetrationexpressedasapercentage ofthemarketRevPARfortheprevious4quarters. Directionofarrowindicatesifpenetrationisincreasingor decreasing relative to one year ago's performance. *Based on RevPAR change over the last 4 quarters. The San Francisco Nob Hill / Wharf submarket consists of the hotels located along Fisherman’s Wharf, atop Nob Hill, in the Marina district, and into the western sectors to the Pacific Ocean. 95 105 115 20122013201420152016 95 105 115 125 20122013201420152016 Upper-Priced Penetration vs. Market Total Lower-Priced Penetration vs. Market Total DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEOHOTEL HORIZONS® Market ADROcc RevPAR Submarket Profile - San Mateo / Redwood City Total Room Supply:5,297 San Mateo / Redwood City Submarket Inventory UPPER-PRICED PROPERTIESROOMS%SUBMKTLOWER-PRICED PROPERTIESROOMS%SUBMKT Inventory 173,03857.4%Inventory 342,25942.6% UPPER-PRICED BRANDS BY SHAREPROPERTIESROOMS%SUBMKTLOWER-PRICED BRANDS BY SHAREPROPERTIESROOMS%SUBMKT Marriott 14759.0%Extended Stay America 33616.8% Pullman 14217.9%Motel 6 12665.0% Crowne Plaza 13536.7%TownePlace Suites 22164.1% San Mateo / Redwood City Construction Pipeline Source: STR, Q3 2017 PHASE PROPERTIESROOMS%SUBMKTPROPERTIESROOMS%SUBMKTPROPERTIESROOMS%SUBMKT Unconfirmed 000.0%000.0%000.0% Planning 000.0%22765.2%000.0% Final Planning 34598.7%22484.7%000.0% In Construction 354910.4%1651.2%000.0% TOTAL 61,00819.0%558911.1%000.0% Source: STR, CBRE Hotels' Americas Research, Q3 2017 San Mateo / Redwood City Performance - All Hotels All Hotels Penetration vs. Market Total YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR YEAROCCADRREVPAR 201277.5%-$143.18-$111.03-201296.6%83.4%80.6% 201379.7%2.8%$153.687.3%$122.4510.3%201396.3%82.0%79.0% 201481.2%1.9%$166.978.6%$135.5110.7%201496.6%80.2%77.5% 201582.0%1.1%$188.3012.8%$154.4914.0%201597.2%84.8%82.4% 201679.9%-2.6%$200.446.4%$160.173.7%201694.8%86.8%82.4% 3Q16 YTD81.6%-3.0%$201.797.9%$164.694.6%3Q16 YTD95.4%86.0%82.0% 3Q17 YTD80.0%-2.0%$206.792.5%$165.390.4%3Q17 YTD94.7%90.1%85.4% San Mateo / Redwood City Performance - Upper-Priced Hotels Source: STR, Q3 2017 YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR 201278.8%-$183.32-$144.49- 201379.0%0.2%$199.568.9%$157.599.1% 201480.2%1.5%$214.417.4%$171.939.1% 201581.4%1.5%$239.9011.9%$195.1713.5% 201679.1%-2.8%$254.736.2%$201.383.2% 3Q16 YTD80.5%-3.3%$256.887.6%$206.754.0% 3Q17 YTD80.0%-0.7%$258.640.7%$206.810.0% San Mateo / Redwood City Performance - Lower-Priced Hotels YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR 201276.0%-$93.44-$71.04- 201380.5%5.9%$100.007.0%$80.5213.4% 201482.3%2.2%$111.8211.8%$92.0414.3% 201582.9%0.7%$125.6012.3%$104.1313.1% 201681.0%-2.3%$133.596.4%$108.193.9% 3Q16 YTD83.0%-2.7%$134.447.5%$111.644.7% 3Q17 YTD80.0%-3.7%$138.483.0%$110.78-0.8% Source: STR, Q3 2017 Source: STR, Q3 2017 UPPER-PRICED LOWER-PRICED UNCLASSIFIED/INDEPENDENT P. 14 / CBRE HOTELS' AMERICAS RESEARCH Submarket Rank*Submarket Penetration* 185% Out of 5 *SubmarketRevPARpenetrationexpressedasapercentage ofthemarketRevPARfortheprevious4quarters. Directionofarrowindicatesifpenetrationisincreasingor decreasing relative to one year ago's performance. *Based on RevPAR change over the last 4 quarters. The San Mateo / Redwood City submarket is located south of the San Francisco International airport area along the San Francisco Bay. It extends from San Mateo in the north to Palo Alto in the south. Hotels in this area border the northern edge of Silicon Valley. 80 90 100 110 20122013201420152016 65 85 105 20122013201420152016 Upper-Priced Penetration vs. Market Total Lower-Priced Penetration vs. Market Total DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEOHOTEL HORIZONS® Market ADROcc RevPAR Submarket Profile - Extended Area Total Room Supply:4,221 Extended Area Submarket Inventory UPPER-PRICED PROPERTIESROOMS%SUBMKTLOWER-PRICED PROPERTIESROOMS%SUBMKT Inventory 242,28454.1%Inventory 441,93745.9% UPPER-PRICED BRANDS BY SHAREPROPERTIESROOMS%SUBMKTLOWER-PRICED BRANDS BY SHAREPROPERTIESROOMS%SUBMKT Courtyard 22826.7%Best Western Plus 22054.9% Ritz-Carlton 12616.2%Americas Best Value Inn 51523.6% Embassy Suites 12365.6%Best Western 21413.3% Extended Area Construction Pipeline Source: STR, Q3 2017 PHASE PROPERTIESROOMS%SUBMKTPROPERTIESROOMS%SUBMKTPROPERTIESROOMS%SUBMKT Unconfirmed 000.0%11182.8%000.0% Planning 22105.0%000.0%000.0% Final Planning 11042.5%11002.4%000.0% In Construction 000.0%1461.1%000.0% TOTAL 33147.4%32646.3%000.0% Source: STR, CBRE Hotels' Americas Research, Q3 2017 Extended Area Performance - All Hotels All Hotels Penetration vs. Market Total YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR YEAROCCADRREVPAR 201272.4%-$149.42-$108.13-201290.2%87.1%78.5% 201375.7%4.7%$160.587.5%$121.6112.5%201391.5%85.7%78.5% 201478.7%3.9%$177.2010.3%$139.3714.6%201493.6%85.2%79.7% 201580.6%2.5%$188.786.5%$152.239.2%201595.5%85.0%81.2% 201680.4%-0.2%$198.185.0%$159.424.7%201695.5%85.9%82.0% 3Q16 YTD81.8%0.1%$199.236.0%$162.996.1%3Q16 YTD95.6%84.9%81.1% 3Q17 YTD81.3%-0.6%$201.271.0%$163.600.4%3Q17 YTD96.3%87.7%84.4% Extended Area Performance - Upper-Priced Hotels Source: STR, Q3 2017 YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR 201272.4%-$183.13-$132.54- 201375.6%4.5%$196.667.4%$148.7512.2% 201478.5%3.8%$217.7410.7%$170.9915.0% 201579.5%1.2%$236.738.7%$188.0910.0% 201679.7%0.3%$247.094.4%$197.014.7% 3Q16 YTD81.0%1.1%$248.205.3%$201.156.5% 3Q17 YTD80.2%-1.0%$250.230.8%$200.74-0.2% Extended Area Performance - Lower-Priced Hotels YEAROCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR 201272.3%-$109.57-$79.27- 201375.8%4.8%$118.067.7%$89.5413.0% 201478.8%3.9%$129.619.8%$102.1214.1% 201582.0%4.1%$134.053.4%$109.967.7% 201681.3%-0.9%$141.645.7%$115.124.7% 3Q16 YTD82.7%-1.0%$142.686.4%$118.015.3% 3Q17 YTD82.5%-0.2%$145.171.7%$119.831.5% Source: STR, Q3 2017 Source: STR, Q3 2017 UPPER-PRICED LOWER-PRICED UNCLASSIFIED/INDEPENDENT P. 15 / CBRE HOTELS' AMERICAS RESEARCH Submarket Rank*Submarket Penetration* 384% Out of 5 *SubmarketRevPARpenetrationexpressedasapercentage ofthemarketRevPARfortheprevious4quarters. Directionofarrowindicatesifpenetrationisincreasingor decreasing relative to one year ago's performance. *Based on RevPAR change over the last 4 quarters. The San Francisco Extended submarket covers a wide variety of suburban areas. It includes Marin County to the north and the Pacific Coastal cities of Pacifica and Half Moon Bay to the south. 70 90 20122013201420152016 75 85 95 105 20122013201420152016 Upper-Priced Penetration vs. Market Total Lower-Priced Penetration vs. Market Total DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEOHOTEL HORIZONS® Market ADROcc RevPAR Fairmont Embassy Suites Courtyard by Marriott Best Western PlusBest Western Days Inn Four Seasons Hilton Crowne Plaza Comfort Inn Red Lion Econo Lodge Loews Hyatt Hyatt Place Hampton Inn La Quinta Extended Stay America Ritz Carlton Marriott Radisson Holiday Inn Mainstay Suites Red Roof W Hotels Westin Residence Inn TownePlace SuitesQuality Inn Value Place Exhibit 1 Exhibits 2 - 5 Exhibit 6 Exhibits 7 - 9 Exhibits 10 - 12 Exhibit 13 Upper-Priced Lower-Priced P. 16 / CBRE HOTELS' AMERICAS RESEARCH The financial benchmarks come from the 2017 edition (2016 data) of Trends ® in the Hotel Industry , CBRE Hotels’ Americas Research’s annual analysis of hotel financial statements from thousands of properties located across the nation. To benchmark the performance of hotels in the local market, we relied on national operating data from hotels of a similar profile to the average hotel in the subject market. The average room count, occupancy, and ADR of upper-priced hotels were used to analyze the performance of full-service hotels. The average room count, occupancy, and ADR of lower-priced hotels were used to analyze the performance of limited-service hotels. For a more in-depth report with a custom comparable set designed for your individual property or the subject market, see our CBRE Hotels’ Benchmarker SM service. (pip.cbrehotels.com) Econometric forecasting represents one of the most sophisticated approaches to gaining insight into future economic activity. Unlike some forecasting methods used in business practice, the models that underlie econometric forecasts contain variables based in economic theory. The forecasts come from historical relationships, similar to statistical correlations, among hotel market measures and economic variables. The measures for the variables come from actual market transactions involving individuals and firms interacting in the economy. Positive Features of Econometric Models: • The variables included in the models follow from economic theory. • The relationships between variables are estimated with advanced statistical methods. • The forecasts developed with econometric models are objectively determined, unlike forecasts based only on judgmental approaches. Occupancy levels, ADR change and RevPAR change are plotted on a fixed "grade" scale. Measured as current value minus the mean, divided by the series' standard deviation. Grades: A: Very strong, greater than one standard deviation above long run average. B: Strong, within one standard deviation above long run average C: Somewhat weak, within one standard deviation below long run average. D: Weak, below one standard deviation of the long run average. Year over year change in Income, Employment, RevPAR and Demand, displayed as annual (Exhibits 2 and 3) and quarterly (Exhibits 4 and 5). Average annual Employment, Consumer Price Index, Gross Domestic Product, and Real Personal Income change for the MSA. Index based change charts with base year 2012 = 100, illustrating the magnitude of change. Compound average annual RevPAR, Demand and Supply change for Upper Priced, Lower Priced, and combined (All) hotels within the MSA. Real RevPAR change (inflation adjusted, CPI) of the current period minus the historical mean of Real RevPAR change, divided by the historical standard deviation of Real RevPAR change. CBRE Hotels' Americas Research prepares hotel market forecasts based on accepted econometric procedures and sound judgment. The two-stage process for producing the forecasts firstly involves econometric estimation of future hotel market activity and financial performance based on historical relationships between economic and hotel market variables, and secondly, a judgmental review of modeled outputs by experienced hotel market analysts. CBRE Hotels and others believe that errors in forecasting are minimized by relying on both data analytics and judgment. EXHIBIT DEFINITIONS FINANCIAL BENCHMARKS HOW WE FORECAST ECONOMETRIC MODELS MARKET SEGMENTS -REPRESENTATIVE BRANDS DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEOHOTEL HORIZONS® Economic Data from October 2017 Hotel Data from September 2017 P. 17 / CBRE HOTELS' AMERICAS RESEARCH Gaining insight into the futures of complicated economic environments requires the introduction of multi-level forecasting models. Several equations often need to be identified and estimated to model complex economic conditions such as the national economy. Multi-equation models have considerable appeal for economic forecasting because they explicitly recognize the interdependence of relationships commonly encountered in markets. Perhaps the best example of this type of model is one that involves both the demand side and the supply side of markets, in which prices of goods are set by the interaction of buyers and sellers. Thus, price appears as a variable in both the demand and supply equations. A committee of hotel experts from CBRE Hotels' Americas Research performs a thorough review of each model prediction. These assessments are made by locally-based hotel experts working in the various offices around the U.S. The quarterly forecasts for the current and forecast period years are subject to review. The committee modifies the model’s market prediction when there is compelling evidence that factors have come into play that the model could not possibly foresee. A Super Bowl-type event, as an extreme example, would cause the committee’s forecast to differ noticeably from the model's prediction—not only in the city in which the event will occur, but also competing cities within the region. In most instances, however, the committee either defers to the model prediction or makes modest adjustments. The Hotel Horizons ® econometric forecasting models fall into the category of multi-equation, demand and supply models. These models have the structure defined below, but vary in their construction for particular market applications (e.g., different cities and hotel market segments). The three estimated equations are: 1. Demand for hotel rooms is primarily driven by the general level of economic activity in the nation or city, as measured by income and employment. The equation recognizes the fundamental relationship between room purchasing behavior and either growth or decline in the relevant economy. Both economic theory and historical data relationships strongly support the inclusion of ADR in the demand equation because lower ADRs motivate increases in travel and leisure spending, while higher ADRs motivate decreases. 2. Supply change - In historical lodging data, a strong relationship exists between growth in the supply of new hotel rooms and prior- period lodging market conditions. In the equation, new hotel room growth in modeled as a function of past levels of new room growth, past ADR, and past occupancy levels. 3. ADR movements are correlated with room scarcity in the market. The equation which estimates ADR defines ADR as a function of past room rates and contemporaneous occupancy levels. The parameters (i.e., coefficients on each variable) then are used to forecast demand, supply change, and RADR by multiplying the parameters by CBRE Econometric Advisors and Moody’s Analytics forecasts of the economic variables and relevant previously estimated values (lagged variables). Three additional calculations are made with these results, as follows: 1. Supply change is added to the previous-period number of available rooms to produce an available rooms level in future periods. 2. Number of rooms sold is divided by number of available rooms to obtain occupancy percent in each future period. 3. Expected inflation is added to real ADR to convert to nominal ADR. JUDGMENTAL INTERVENTION THE EQUATIONS DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEOHOTEL HORIZONS® What Has Changed Since The Last Report? 2017 20182019 1st Qtr2nd Qtr3rd Qtr4th Qtr FYear EndYear EndYear End This Report-0.5%-0.4%0.9%2.7%0.7%3.2%4.6% Last Report1.3%2.6%4.2%4.8%3.2%3.7%4.6% This Report2.8%2.2%1.7%1.6%2.0%1.0%0.3% Last Report2.8%2.2%1.7%1.5%2.0%0.8%0.0% This Report-0.5%-0.1%0.6%0.8%0.2%2.8%1.7% Last Report-0.5%-0.1%0.9%2.1%0.6%3.1%2.1% This Report-2.2%-2.1%0.1%0.2%-1.0%2.1%2.4% Last Report-2.2%-2.1%0.2%-0.3%-1.1%1.1%2.7% This Report-1.7%-2.0%-0.5%-0.6%-1.2%-0.7%0.7% Last Report-1.7%-2.0%-0.7%-2.4%-1.7%-2.0%0.5% This Report-0.2%-6.3%-0.2%-0.4%-1.8%1.7%2.9% Last Report-0.2%-6.3%-7.5%-3.5%-4.5%1.1%2.3% This Report-1.9%-8.2%-0.7%-1.1%-3.0%1.1%3.6% Last Report-1.9%-8.2%-8.1%-5.8%-6.1%-0.9%2.9% * Economic data (history and forecast) are from CBRE EA, Q3 2017 ** Hotel performance data: History supplied by STR; Forecast developed by CBRE Hotels' Americas Research, Q3 2017 Source: CBRE Hotels' Americas Research, Q3 2017 P. 18 / CBRE HOTELS' AMERICAS RESEARCH 2017 and 2018 Year End Forecast Change in RevPAR At the beginning of each year, STR, our source for historical lodging data, repositions the chain-scale classifications for branded properties, and chain-class categories for independent hotels. The reclassifications are based on the ADR achieved the prior year. Because of these reclassifications, the historical data presented in this report may differ from the historical data presented in prior Hotel Horizons ® reports. Further, the reclassifications may have influenced our forecasts of future performance. Forecasts are valuable tools for developing expectations of key variables. Changes to forecasts occur for two primary reasons. The first is adjustments to historical series made by the data provider, causing future periods to vary due to changes in their base. The second is that economic expectations tend to shift as more information becomes available, thus moving the hotel variables according to their underlying relationships. We are constantly re-evaluating the performance of our forecasts, and presented below is a view on how the world has changed since the September - November 2017 issue, presented in same period, prior year change format. All data under "This Report" are actual through 3rd Quarter 2017. Data marked as "Last Report" are actual through 2nd Quarter 2017, with 3rd Quarter 2017 being the first forecast period for that report. As noted on earlier pages, all of the hotel variables below are modeled using data from Moody's Analytics. It is important to note that all historical data are subject to revision. -3.0% 1.1% -6.1% -0.9% 2017 2018 This Report Last Report 2018 2019 CHANGE IN REAL PERSONAL INCOME* CHANGE IN TOTAL PAYROLL EMPLOYMENT* CHANGE IN SUPPLY** CHANGE IN DEMAND** CHANGE IN OCCUPANCY** CHANGE IN ADR** CHANGE IN REVPAR** DECEMBER 2017 -FEBRUARY 2018 EDITION SAN FRANCISCO / SAN MATEOHOTEL HORIZONS® 2017 2017 ADR Occupancy RevPAR Supply Demand LRA Penetration Standard Deviation CBRE HOTELSCBRE HOTELS DallasNew York LEADERSHIPCONSULTING Jeff Binford Mark VanStekelenburg [email protected] [email protected] Kevin Mallory National Practice Leader CBRE Hotels' Global Head Tom Huffsmith Houston Philadelphia [email protected] Senior Managing Director Randy McCaslin Tony Biddle [email protected] [email protected]@cbre.com CBRE HOTELS Daniel C. Hanrahan II AMERICAS RESEARCH AtlantaIndianapolis [email protected] Scott Smith Mark Eble Mark Woodworth [email protected] [email protected] San Francisco Senior Managing Director Jill BidwellChris Kraus [email protected]@cbre.com Jacksonville [email protected] Hank Staley Jack Corgel Bozeman [email protected] Seattle Managing Director Chris KrausChris Kraus [email protected] [email protected] Los Angeles [email protected] Bruce Baltin Jamie Lane Chicago [email protected] Washington, D.C. Senior Economist Mark EbleJeff LugosiKannan Sankaran [email protected] [email protected] [email protected] [email protected] For more reports visit our store at https://pip.cbrehotels.com/ GLOSSARY OF TERMS DECEMBER 2017 -FEBRUARY 2018 EDITIONSAN FRANCISCO / SAN MATEOHOTEL HORIZONS® For more information about this market please contact: Chris Kraus at [email protected] Average Daily Rate -rooms revenue divided by paid rooms occupied. Revenue per Available Room -rooms revenue divided by available rooms. (AccommodatedDemand)Averagedailyroomnightsoccupiedperquarter,representedasachangeover previousyear,samequarterexceptwherenotedannually. LongRunAverage-Annualaveragefrom1988tolastcompleteyearend. Average daily room nights available per quarter, represented as a change over previous year, same quarter except where noted annually. Marketarea(orsub-marketarea)measurementasapercentofnational(ormarketarea)measurement. Theplottingofanormaldataseriesandhowfareachindividualdatapointliesfromthemean:68.2% oftheserieswillfallwithin1standarddeviation,95.4%ofalldatapointswillfallwithin2standard deviations,and99.7%fallingwithin3standarddeviationsofthemean. Paid rooms occupied divided by available rooms. Hotel Horizons® is compiled and produced by CBRE Hotels | Americas Research. Readers are advised that CBRE Hotels’ Americas Research do not represent the data herein to be definitive, neither should the contents be construed as a recommendation on policies or actions. Quotation, reproduction or transmittal (in any form or by any means, whether electronic, photocopying, recording or otherwise) is not permitted without consent from CBRE Hotels’ Americas Research. Please address inquiries to Hotel Horizons®, 3280 Peachtree Road NE, Suite 1400, Atlanta, GA 30305. Phone: (855) 223-1200. Copyright © 2017 CBRE Hotels’ Americas Research. All rights reserved. 1 | Page REQUEST FOR PROPOSALS For the Development of a High-Quality, Waterfront Hotel at Oyster Point Located in South San Francisco, California Issued July 28, 2017 Deadline to submit responses: Wednesday, October 25, 2017 by 5:00pm PST CONTACT: Ernesto Lucero, Economic Development Coordinator (650) 829-6620 or [email protected] 2 | Page Table of Contents 1.0 Background and City Goals Page 3 2.0 Submittal Requirements Page 11 3.0 Phase II RFP – Evaluation and Selection Process Page 15 4.0 Term Sheet Negotiations Page 17 5.0 Other Important Information Page 18 6.0 Appendices Page 19 3 | Page The City of South San Francisco (“City”) is pleased to issue a Request for Proposals (“RFP”) to the approved Developer Short List. This 90-day solicitation will conclude on October 25, 2017. Any additional information on the hotel site or surrounding development that becomes available during this RFP period will be provided directly to the Developer Short List. 1.0 Background and City Goals 1.1 Oyster Point Development Oyster Point Development 4 | Page The vision of the redevelopment of Oyster Point is to transform 81 acres of underutilized and under developed bay front land in South San Francisco into a sustainable mixed-use development that will include a state-of-the-art life science campus, a park and recreation destination, a vibrant marina environment, and a site that can accommodate commercial and hotel land uses. This vision will be achieved by implementing innovative sustainable design approaches, superior architecture, and urban design. The existing Development Agreement (DA) and Disposition and Development Agreement (DDA), between the City and Developer, Oyster Point Development, consists of the redevelopment of a multi-phased project that will include over 2.25 million square feet of office/research and development (R&D) space, the proposed hotel development, retail, and public open space. In 2011, the Oyster Point Specific Plan (OPSP) and related entitlements were approved to allow for the development of the 2.25 million square feet of office/R&D uses across an approximately 41.4 acre developer-owned site to be built out in four Phases (ID, IID, IIID, IVD). In addition, two phases of infrastructure and open -space improvements were approved throughout the site and across the adjacent 40-acre site owned by the City (Phases IC and IIC). The hotel site is located at the eastern edge of the Phase IC improvement area. Phase ID is proposed to include approximately 508,000 SF of Office/R&D buildings on a site of approximately 10 acres and Phase IC is proposed to include infrastructure and open space improvements across approximately 25 acres. The Phase I Precise Plan, which outlined the detailed design of Phase ID and Phase IC, was approved concurrently with the Oyster Point Specific Plan in 2011. 5 | Page Phases IID through IVD were entitled for approximately 1,750,000 SF of Office/R&D buildings. This would also include new infrastructure and open space improvements consisting of the continuation of the streets, sidewalks and utilities from Phase IC, a new sewer pum p station, bicycle facilities, shuttle bus stops, and new open spaces including courtyards, plazas, parks, recreation facilities and Bay Trail improvements along the Oyster Cove Marina shoreline (subject to BCDC guidelines and approval). Phase IIC at the eastern portion of the Oyster Point Specific Plan was conceptually developed in 2011 to include minor landscape, parking and landfill cap improvements. Detailed designs of these improvements have not yet been finalized. The City is in the process of beginning a Master Planning effort that will include the public areas within Phase IIC and the open space parcel within Phase 1C. In January 2017, Oyster Point Development proposed modifications to Phases IIID and IVD of the Oyster Point Specific Plan (Chapter 20.230 of the South San Francisco Zoning Ordinance) and related entitlements to include residential and commercial uses. The new proposed residential component of the project could add up t o 1,191 new housing units to the project. The illustration on page 6 shows the potential residential component to the project.  DDA and DA (2011)  Oyster Point Specific Plan (2011)  City Land Use Online Tool  Business Journal Article – Newly Proposed Residential at Oyster Point 6 | Page 1.2 Infrastructure and Construction Sequence Project Infrastructure The Project will require the construction of infrastructure to serve the proposed uses. This infrastructure includes the following:  A new street configuration with updated traffic signalization to provide a more rational circulation system throughout the project.  A new sanitary sewer system connecting into the existing sewer system. This system would include the replacement of one existing pump station and provisions for an additional pump station in the future.  A new stormwater drainage system to collect, filter/treat and discharge into the Bay.  A new domestic water distribution system and fire truck access.  A new join utility trench system including electrical power and telecommunication services. 7 | Page  An updated landfill closure system with an improved impermeable clay layer, methane mitigation and monitoring systems. Phase I Infrastructure Construction The initial phase of the Project’s construction will include the installation of necessary infrastructure to support the office/R&D development, the public amenities at Oyster Point Marina and the future hotel and commercial uses. Vehicular access to the existing Oyster Point Boulevard will remain intact throughout this phase. Temporary access to the remainder of the Oyster Point Marina will also be maintained throughout this phase. The possible sequence of construction is as follows:  Demolition of the Oyster Point Inn, adjacent office building, entry kiosk and marine services building.  Construction of the reconfigured Oyster Point and Marina Boulevard intersection.  Installation of the proposed utilities in Oyster Point and Marina Boulevard.  Relocation of sewer pump station #1 adjacent to 377 Oyster Point Boulevard.  Site work, landfill cover modifications, and grading for Phase ID of the office/R&D development, open space and future hotel site. Phase I of the Office/R&D Development and Open Space Once the new road configuration and site work is complete, construction can begin on Phase I D of the office/R&D development. Work to be completed during this phase will include:  Construction of 508,000 to 600,000 square feet of office/R&D space and podium garage structure on the 10-acre site to the south of Oyster Point Boulevard.  Completion of the open space on the 3.8-acre site to the west of the hotel site.  Completion of the open space and associated parking area to the north of the new Marina Boulevard. Phases IID-IVD of Office/R&D These phases will include:  Phased demolition of the buildings at 375 to 389 Oyster Point Boulevard.  Grading and site preparation.  Completion of the northern extent of the new roadway and utilities.  Construction of additional office/R&D buildings and supporting parking structures. Each phase will include approximately 500,000 to 600,000 square feet of space.  Construction of the associated outdoor plazas, courtyards and open space.  Improvement in the Bay Trail on the northern and western portions of Oyster Point. 8 | Page Future Phases at Oyster Point Marina This work will include:  Construction of the proposed hotel.  Additional landfill cover modifications at the eastern portions of Oyster Point Marina as required.  Landscaping and Bay Trail improvements at all areas east of the open space. Infrastructure Financing – Community Facilities District The infrastructure improvements necessary for development of the Specific Plan District are proposed to be financed through a Community Facilities District (CFD). The formation process is currently underway. 1.3 Hotel Development Site APN 015-010-600 Owner City of South San Francisco. City will retain ownership of site, and enter into a ground lease agreement at FMV with the selected developer. Area The total developable site is approximately 4.7 acres. Hotel Exhibit Parcel Map Zoning Oyster Point Specific Plan Municipal Code: Chapter 20.230 Parking Municipal Code: Chapter 20.330 Entitlements CEQA clearance has been approved for up to 350 rooms. Current Site Conditions Since this area sits on top of a closed landfill, work will be performed to grade the area and recap the existing landfill. This work is projected to be completed in Q3 2018. San Francisco Bay Conservation and Development Commission (BCDC) BCDC will not have jurisdiction over the specific hotel site. However, the City has a desire for a north-south connectivity bay trail access point within the hotel site, and would encourage the design to include this connectivity to trails. 9 | Page 1.4 Existing Site Conditions In preparation for a proposed hotel, the City -owned hotel site will undergo significant site preparation in 2017/18. The existing structures and uses will be demolished, and the closed landfill that sits below the majority of the Oyster Point peninsula will be opened , relocated on site, and covered with a new clay cap for purposes of grading the area for new development. This work is planned to be completed in Q3/Q4 of 2018. When the selected developer receives site control in late 2018, the hotel site will be leveled and graded. Please view the following reports and information as it relates to the existing site conditions and work that will take place prior to site control:  Preliminary Geotechnical Report (2017) o Oyster Point City Parcel Refuse Relocation and Future Hotel Site. This report was prepared by Langan Engineering and Environmental Services for Oyster Point Development in February 2017.  Reliance Letter – Preliminary Geotechnical Report (2017)  Draft Final Closure Plan (2017) o Former Oyster Point Landfill Draft Final Closure Plan for Oyster Point Development Phases I and II, prepared by Langan Engineering and Environmental Services, Inc.  Draft Grading Plan (2017) o Document 1 o Document 2 o This draft plan is prepared by Wilsey Ham (San Mateo) for the grading of the Phase 1D site, hotel site, open space parcel and adjacent sites.  Hotel Parcel Exhibit o The hotel parcel map represents 4.7 acres. The document was prepared by Wilsey Ham. 1.5 Opportunity The hotel site boasts an excellent opportunity to develop a high -quality, waterfront hotel in keeping with South San Francisco’s pristine new vision of Oyster Point. With partial entitlement already programmed for a hotel(s) of up to 350 rooms through the Oyster Point Specific Plan, the 4.7-acre site sits in a prime location with unobstructed waterfront views of San Francisco, Oakland, San Francisco International Airport, and the San Bruno Mounta ins. The hotel site is 10 | Page situated only steps from surrounding new developments, a world -premiere bio-tech cluster, and easy access to San Francisco and the East Bay via ferry service. The proposed hotel(s) is anticipated to represent an upper upscale or up scale hotel, offering the appropriate compliment of facilities an d amenities to cater to the larger concentration of transient commercial and leisure as well as corporate group demand in the local market area. 1.6 Design The City is interested in iconic high-quality architecture for this prominently located hotel development. As part of the Oyster Point Development waterfront, significant open space landscaping is planned for the area, and design of public spaces will be important. The overall design will be a key consideration of the RFP evaluation. The hotel design should align with the vision and design guidelines in the Oyster Point Specific Plan, as well as design elements of an upper or upscale hotel brand. 1.7 Phase II RFP Schedule The proposed schedule of Phase II of the RFP solicitation process is as follows, and is subject to modification: Milestone Anticipated Date PHASE 2 City invites Short List of Developer(s) to respond to an RFP (90 days) July 28, 2017 Last day to submit questions October 13, 2017 RFP proposals due October 25, 2017 Housing Subcommittee to interview developer teams that submitted a proposal, and make a recommendation of a selected developer, with an alternate. (Open Session for developer interviews & Closed Session for Price & Terms.) Special Mtg TBD in December 2017 11 | Page City Council meeting to approve the Housing Subcommittee recommendations and finalize developer selection January 2018 City Council meeting to approve a long-term land lease agreement with the selected developer Q1 2018 2.0 Submittal Requirements Responses to this RFP must be packaged as a submittal with:  Twelve (12) hard copies presented in collated binders, and  One (1) unbound, (8.5” x 11”)  One digital file, either sent electronically or on a thumb drive Responses must include, at a minimum: 2.1 Table of Contents Outline in sequential order the major sections as listed here, including enclosures that should also be identified. All pages must be consecutively numbered and correspond to the table of contents. 2.2 Executive Summary Summarize your proposal in no more than three(3) pages, outlining why your team is best qualified to meet the objectives of the City as set forth in the RFQ/RFP. 2.3 Development Team 2.3.1 Developer A. Company Information 12 | Page Provide background information on the company such as area of specialty, years in business, and number of employees. Outline the organization of your team, any additional companies involved, key personnel in each company, summarize respective roles and responsibilities, and include any other information that will offer the City a good understanding Proposer’s capabilities. Also, provide the contact information for the primary individual(s) who will be leading the development work and the person(s) who is authorized to bind the Proposer with respect to the RFQ/RFP. B. Development Team Members List key individuals of the development team, their roles in the proposed project, including resumes. C. Relevant Experience Summarize developments that Proposer has completed, and/or is currently entitling, of similar size and scope to those described in the RFQ/RFP. 1. Project name, location, year completed, # of hotel rooms, development cost 2. Key personnel who worked on the development and in what capacity 3. Summary of financing 4. Any public/private partnership 2.3.2 Design Consultants The Development Team must include a Lead Architect, Landscape Architect and Civil Engineer. A. Company Information Provide background information on each of the design companies such as area of specialty, years in business, number of employees, and any other information that will communicate capabilities. B. Relevant Experience Summarize developments that Design Consultant has performed services similar in scope to those described in the RFQ/RFP. 1. Project name, location, year completed, project cost 2. Design personnel who worked on the development 3. Description of services provided 4. Images 13 | Page 2.3.3 Hotel Brands Hotel brands are welcomed to be included as part of the Development Team if they are submitting as a Co-Developer or Investor. 2.4 Approach to Proposed Development Plan Prepare a summary of how the Proposer will approach the development plan implementation; include how Proposer will work with the City and the OPD community, approach to site planning, waterfront and open space design. 2.5 Development Program Include all uses with proposed specific use types and square footages for each type of use, including open space. Also provide number of parking spaces.  Detailed project description to list major milestones in a timeline format, assuming site control in Q4 2018  Market study and analysis of the proposed hotel at Oyster Point  Operational relationship of the hotel and approach 2.6 Schematic Plans / Drawings Include schematic diagrams and 3D renderings that communicate the vision for the site , showing gross building area and parking by use and by phase, conceptual plan and elevations . 2.7 Project Schedule/Phasing Plan Describe the general proposed development schedule and any phasing plan. 2.8 Financial Capability and Financing Plan (Confidential) Financial Capability Provide a description of the general financial capability of the Proposer. Financing Plan 14 | Page Summarize the Proposer’s broad approach to financing the proposed development. Include the Proposer’s role in the capitalization of the project, and relationships with capital resources. Include Proposer’s commitment to all or a portion of the financing , or commitment of financing sources for this project. 2.9 City Benefits Describe what economic and community benefits the City will receive as a result of the proposed development project. Proposer shall estimate all projected economic impacts of their proposal, including one-time fees such as building permit fees and impact fees, and ongoing payments such as estimated property taxes, hotel taxes, food & beverage taxes, and land lease payments. Describe any other community benefits to the City. 2.10 Financial Analysis (Confidential) Include a detailed analysis of project development costs, and projected revenue and operating expenses over a five-year period that support the economic impacts described in the City Benefits section above. Project cost to include direct construction costs and sources, other costs with sources and assumptions, and all costs in current dollars (date of response) (Financial analysis should be packaged as a separate submittal and will remain confidential. This information will be discussed in closed session at any committees and governing bodies) 2.11 References Provide references that the City or its authorized representatives can contact. Please include public entities if possible. 2.12 Other Information Provide any other relevant information to demonstrate capabilities and experience. 15 | Page 3.0 Phase II RFP – Evaluation and Selection Process 3.1 Phase I RFQ Selection Process for Shortlisting Developers for Phase II RFP A Request for Qualifications (“RFQ”) was issued to the public on February 24, 2017, seeking a statement of qualifications and a preliminary project concept from qualified development teams to build a high-quality, hotel or hotels, located at Oyster Point. The deadline of the RFQ was March 31, 2017. Request for Qualifications (2017) Eight submittals were received and were reviewed and scored by a Review Panel. Firms that submitted included:  AJ Capital Partners (Chicago, IL)  OTO Development (Spartanburg, SC)  M-Rad Architecture & Oliver Companies (Los Angeles, CA)  Shashi Group, LLC (Cupertino, CA)  Glacier House Hotels, LLC (Scottsdale, AZ)  Ensemble Real Estate Investments (Long Beach, CA)  Bayview Development Group (San Jose, CA)  JMA Ventures (San Francisco, CA) After the review of paper submittals received, and interview presentations, the Review Panel made the recommendation of a Developer Short List to include: 1. Ensemble Real Estate Investments (Long Beach, CA) 2. JMA Ventures (San Francisco, CA) 3. OTO Development (Spartanburg, SC) 4. Shashi Group (Cupertino, CA) The RFQ that was issued gave the City the opportunity to hear from the hotel development community about relevant experience on similar projects, determine the most qualified developers for a hotel at Oyster Point, as well as understand a very preliminary concept of the proposed hotel development and initial understanding of how the hotel would be programmed. With the recommended Short List, the City is now issuing an RFP to the selected developers to provide more specific information about the program and financial structure of the hotel, and a 16 | Page site and schematic plan. The developers will be given sufficient time to perform due diligence on the site. The RFP also includes a current disclosure package to the Short List of current reports and plans related to the entire development of Oyster Point. 3.2 Pre-submittal Informational Meeting An informational meeting will be scheduled and details about the meeting will be sent via email. Separately, any questions pertaining to this RFP can be emailed directly ([email protected]) up until October 13, 2017. 3.3 Housing Subcommittee Phase 2 of the selection process will proceed with the following milestones, with the goal of selecting a developer and entering into a lease agreement, no later than the 1st Quarter of 2018. This will include:  Housing Subcommittee – two City Council members and three Planning Commissioners o 1 meeting: In-person interviews of RFP submittals, to make the recommendation of one developer and one alternate 3.4 Evaluation Criteria Criteria that will be used by the Housing Subcommittee to evaluate the proposals of the developers that respond to this RFP will include:  Appropriateness and quality of project concept  Community and economic benefits to Oyster Point and the City  Financial capability to consummate the proposed deal  High-quality iconic design  Completeness, creativity, and clarity of proposal  Results of developer interviews at the Housing Subcommittee Note that the approval and selection of a development team as outlined in this RFP will be at the discretion of the City Council. 3.5 City Council Approval and Selection  City Council – comprised of the Mayor, Vice-Mayor and three City Council Members o 1 meeting: Approval of the Housing Subcommittee’s recommendations, and o 1 meeting: Approval to execute a lease agreement with the selected developer 17 | Page 4.0 Term Sheet Negotiations Following the approval of the developer selection by the City Council, the City and the selected Developer will enter into negotiations of a Term Sheet that will form the basis of a Long-Term Land Lease and Development Agreement. The Term Sheet will address: 4.1 Schematic Plans/Drawings Diagrams and Renderings that communicate the vision of the site 4.2 Development Program Development Program that includes square footages for each component of the development 4.3 Project Schedule/Phasing Plan Development Schedule and any Phasing Plan 4.4 Development Cash Flow Analysis Development Cash Flow Analysis (revenues, expenses, capital etc.) for each component (hotel, food & beverage, meeting space etc.) with a summary of significant assumptions, demonstrating project financial feasibility 4.5 Terms for Leasing City Land Terms for Leasing City Land for private development 4.6 Development Capitalization Plan for Raising Capital and Financing for the proposed development 4.7 Summary of City Revenues Summary of projected City Revenues generated by the proposed development over time, including property taxes, hotel taxes, food & beverage taxes, and estimated one-time fees such as building permit and impact fees 4.8 Economic Impact and Support Documentation 18 | Page Analysis of the economic impact of the proposed development plan with documentation supporting the projected economic impacts 4.9 Oyster Point Community Engagement Plan to involve the City and the OPD community in the refinement of the development vision 5.0 Other Important Information 5.1 Prevailing Wage Development on the Site will be subject to prevailing wage requirements. 5.2 Disclaimers/Additional Requirements The City reserves the right to:  Extend the due date of the RFP, or cancel, in whole or in part of this solicitation.  Interview none, any or all developers that submit responses to the RFP.  Request additional information.  Reject, in whole or in part, any or all proposals, and to waive minor irregularities in the submittal.  Award in whole or in part, by item or group of items, when such action serves the best interests of the City.  Seek and obtain additional information beyond the due date if the proposals received are unsatisfactory.  All RFP submittals will become the property of the City. The City may use any and all ideas and materials included in any submittal, whether or not the respondent is selected as the developer.  No reimbursement will be made by the City for any cost incurred by developers in preparation or submittals of a response to this RFP.  The RFP is not a contract or a commitment of any kind by the City and does not commit the City to award exclusive negotiating and/or development rights. The issuance of this RFP does not constitute an agreement by the City that the City Council will actually enter into any contract.  Issue Addenda to clarify or modify elements of this RFP 19 | Page  Require Proposers to accept the City’s standard insurance and indemnification requirements.  By responding to this RFP, the Proposer represents that it and its subsidiaries do not and will not discriminate against any employee or applicant for employment on the basis of race, religion, sex, color, national origin, sexual orientation, ancestry, marital status, physical condition, pregnancy or pregnancy-related conditions, political affiliations or opinion, age, or medical condition.  Respondent's Duty to Investigate: 1. It will be the sole responsibility of the selected respondent to investigate and determine conditions of the Site, including existing and planned utility connections, and the suitability of the conditions for any proposed improvements . 2. The information presented in this RFP and in any report or other information provided by the City is provided solely for the convenience of the interested parties. It is the responsibility of interested parties to assure themselves that the information contained in this RFP or other documents is accurate and complete. The City and its advisors provide no representations, assurances or warranties pertaining to the accuracy of the information.  Proposals and all other information and documents submitted in response to this RF P are subject to the California Public Records Act, California Government Code §§ 6250 through 6276.48) (CPRA), which generally mandates the disclosure of documents in the possession of the City upon the request of any person, unless the content of the document falls within a specific exemption category.  Non-Liability: By participating in the RFP process, each respondent agrees to hold the City and its and their officers, employees, agents, representatives, and consultants harmless from all claims, liabilities, and costs related to all aspects of this RFP. 6.0 Appendices 1. DDA and DA (2011) 2. Oyster Point Specific Plan (2011) 3. Land Use Online Tool 4. Business Journal Article – Newly Proposed Residential at Oyster Point 5. Preliminary Geotechnical Report (2017) 6. Reliance Letter – Preliminary Geotechnical Report (2017) 7. Draft Final Closure Plan (2017) 8. Draft Grading Plan (2017) a. Document 1 b. Document 2 9. Hotel Parcel Exhibit November 1, 2017 OYSTER POINT DESTINATION HOTEL Contact Jack Highwart, AIA Principal 310 895 2200 [email protected] SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 2 Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Design Concept Narrative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 SITE ANALYSIS 5 Existing Site Photos. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Site Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Impacts of Airport Proximity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Site Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Site Arrival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 RESPONSE 11 Design Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Design Concept Inspiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Exterior Design Inspiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 Rendered View from Drive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Ground Floor Site Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 Public Spaces Precedents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Second Level Floor Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 Bar, Meeting Room, + Event Area Precedents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 Third through Sixth Level Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 Seventh Level Floor Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 Spa + Guest Room Precedents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Site & Building Cross Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24 Aerial View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 Landscape Reference Site Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 Landscape References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Parking Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42 Project Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Table of Contents SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 3 Design Concept Narrative Introduction On a site with enviable views both to the Marina on the north side and San Francisco Bay on the south, Oyster Point Hotel is in a pivotal location, both physically and imaginatively. Established as the Biotech center of Northern California, in much the same way as Silicon Valley is the center of the high- tech industry, Oyster Point will attract an affluent but mostly youthful population that values sustainability and a casual lifestyle. Abstract concepts of “life on the seashore” such as contemplation, reflection, a healthy connection to the outdoors, and casual human interaction, are integrated in the design of Oyster Point Hotel with sophisticated building systems and the latest advances in sustainability. Subtle references to sea forms- coral, shells, waves, and the reflection of sunlight on water- are used throughout the project, informing everything from the xeriscape outdoor areas to the flowing interior surfaces. This balanced and low-key design is intended to appeal to the youthful scientific and information systems workers that will populate the biotech area. Design Concept Here are some key concepts in the site plan and overall massing of Oyster Point Hotel. • Optimal East-West orientation to reduce heat gain and optimize energy performance. • Subtle gradations from public to private space create a seamless transition from the exterior walking and activity areas into the open plan lobby and food and beverage uses. • Long view corridors welcome the guest and merge indoor and outdoor environments. • North / West side shields the project from wind and noise, south side opens to the sun and dramatic bay views. The massing of the hotel block is an abstract reference to an open seashell: the outer, northern “shell” is the protective surface, with an integration of iridescent solid surfaces with glass. The southern surface is the living essence, encased in a shimmering skin of metal and glass, with balconies that offer expansive views to the Bay beyond. Artfully-curved landforms at the Plaza level blend the adjacent parking structure and partially subterranean spa into a continuous landscape of native plant materials and walkways imbedded with seashells. Offsetting the Public Functions in a one-story building connected to the hotel block and locating the parking in another low-rise structure to the west increases the economic viability of the project. The poolside area is located along a visual axis that also allows casual visitors to experience the amenities of the hotel’s facilities like the spa and outdoor bar. Landscaped terraces surrounding the shell-shaped SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 4 pool, drenched in light, oer expansive views out to the bay beyond. The Spa, nestled into a sunken “hill” with a grass roof, continues the bio-organic theme with its calming interior of neutral colors, multiple soaking tubs, and restorative health treatments. The main lobby is a long, tall space, whose glass walls and bright slightly reective surfaces continue to blur the distinction between indoors and outdoors. Screen walls of slightly metallic nish are reminiscent of coral formations, and the abstract wavelike sound baes that wind through this multi-functional space continue the ocean theme. The soothing lobby interiors, with their restrained palette of neutral colors and use of natural materials like stone and wood, are continued into the individual guest rooms. Far from being restricted to use by hotel guests, the various public dining and drinking spaces of the hotel will be in constant use by the local population for anything from a quick brunch, to a gettogether with friends, to a romantic dinner overlooking the sea. The focus of this activity is the second-oor bar with its open views down into the lobby below and outdoor terraces that merge with the surrounding landscape. This is really the “living room” for the entire community to gather for a drink or some light refreshment with friends and family. Our approach to sustainability has always been to use all those tools at a building’s disposal to make the place more comfortable, the building more suited to its task and the project simply more beautiful. With the correct orientation, energy use is already cut and solar glare almost eliminated. The use of native plant materials and hardy oceanside friendly specimens creates a landscape that is always attractive and requires lower maintenance and watering. On top of low-ow xtures, water is saved throughout the project using collection systems for re-use. In addition to these physical systems, sustainability is extended to the user in terms of smart devices, hot-spots on the property and an integrated approach to information ow. A guest will be able to book a table in the restaurant, check out movies, get weather updates, or hail an Uber, all using the hotel’s app: a convenient and energy-saving strategy that brings the internet, technology, and sustainability together. SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 5 SITE ANALYSIS SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 6 Site Location Existing Site Photos SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 7 Site Information U.S. ROUTE 101 SITE SITE SPECIFICATIONS Proximity Trail Vehicle Route Bike Route Site Size: 4.7 acres [Approx.] Height: Subject to FAR Part 77 height restrictions FAR: 1.6 Base FAR SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 8 3 mile Project Location SFO Airport Excerpt from CEE 4674 - Airport Planning and Design Obstructions to Navigation An object constitutes an abstruction to navigation if: • If 200 ft. above ground level or 200 ft. above the airport elevation (whichever is greater) up to 3 miles (for runway lengths > 3200 ft.) from the airport. • Increase 100 ft. every mile up to 500 ft. at 6 miles from the ARP (airport refrence point) • Is 500 ft. or more above ground level at the object site • If penetrates an imaginary surface (a function of the precision of the runway) • If penetrates the terminal obstacle clearance area (includes initial approach segment) Impacts of Airport Proximity N *Site SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 9 Legend Road Winds Winter Solstice Summer Solstice Site Factors N *Site SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 10 VIEW Per the intent of the Oyster Point Specic Plan, the positioning of the site responds to the realignment of Marina Boulevard as an opportunity to strengthen the experience of place on this site. The new road alignment creates a repetition of the sequence: Approach, View, and Proceed to the right. Initially, the new road alignment leads guests approaching from the West to a framed view of the Marina, enhanced by the roads new alignment and proximity to the Marina. Then, a right turn shifts their gaze toward the eye-catching tower of the new hotel at the end of the peninsula. Upon approach of the hotel site entry, guests will again follow the familiar sequence - Approach, View, and Turn Right - as they turn into the Hotel entry court and covered porte cochere, with a framed view of the Bay, on- site gardens, and bike path, located south of the site. TRAVELING FROMOOOMMM V I E W TRAVELING FROM Site Arrival RESPONSE SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 11 SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 12 Views to Marina Sun Building Orientation to Maximize Daylighting Pr e s e r v e A c c e s s O n Si t e F o r B i k e P a t h Pr e s e r v e A c c e s s O n S i t e Fo r S e r v i c e V e h i c l e s B u i l d i n g O r i e n t a t i o n t o M a x i m i z e V i e w N S W E Views to Bay N e w R o a d A l i g n m e n t Arrival Sequence 1. Optimize Building Orientation for Natural Daylighting + Views. • Peninsula orients to optimal East-West placement, reducing heat gain + optimizing building energy performance • Site accessed from Marina Blvd. • Respond to Site Inuences 2. Sculpt Building + Landscaping on Site to Create a Porous + Inviting Experience. • Allow the North + South Outdoors to penetrate the Site. • Create a dramatic Entry Portal that connects the guest arrival with views of the Marina + the Bay. • Create open, exible vehicular court to accomodate Multi-model transportation uses. • Site porosity increases the visual + physical access, and allows the Public + Private uses to blend 3. A Tower Shelters + Shields Outdoor Activities from Prevailing Winds and Creates a Rened Guest Environment. • Featured areas of gathering, reection, or engagement are surrounded with glass and open air to connect interior + exterior space. • The public levels and outdoor spaces are connected with the Public realms of the site. • Access to Light + Air activates guests. • Guest Room tower takes advantage of spectacular views around all site orientations.. • Tower lifts + shapes to dene iconic formal character. Design Approach SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 13 Design Concept Inspiration SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 14 Prominent Evidence Textural Variety Iconic Destination Rooted in Site + Context Exterior Design Inspiration SO U T H S A N F R A N C I S C O , C A L I F O R N I A OY S T E R P O I N T D E S T I N A T I O N H O T E L 15 Rendered View from Drive Ground Floor Site Plan SO U T H S A N F R A N C I S C O , C A L I F O R N I A OY S T E R P O I N T D E S T I N A T I O N H O T E L 16 KITCHEN (3,000 SF) P-1 (SURFACE) PARKING MARINA PARKING SPA / FUNCTION (14.5 EL) 3,000 SF SOUTH BAY BAY TRAIL GRAND BALL ROOM (6,000 SF) RESTAURANT (3,500 SF) LOBBY (+16.5 EL) (2,500 SF) ARRIVAL PORTE COCHERE P-1 PARKING P-2 PARKING DECK RAMP WEST OPEN SPACE 10’ BAY TRAIL CONNECTION 10’ BAY TRAIL CONNECTION DN UP (SEE PARKING PLAN) MARINA B O U L E V A R D PDRB A BA SERV ELEV ELEV F.D. F.O. (1,000 SF) O.FITNESS SERV.SERV. SERVICE ROAD FUTURE DEVELOPMENT FIRE ACCESS TURN AROUND BALL SIDE MEETING (2,500 SF)POOL COURTYARD HK/LAUNDRY L/D M M EMW W BOH/SERV. SUPPORT/ EMPLOY (3,000 SF) BOH/ MECH-ELEC BANQ PF #2 PF #1 SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 17 Public Spaces Precedents Positively Thought-Provoking Naturally Beautiful Framed + Focused Curated Engagement SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 18 Public Spaces Precedents Relaxed Elegance Playfully Inventive Supporting Collaborative Exchange SO U T H S A N F R A N C I S C O , C A L I F O R N I A OY S T E R P O I N T D E S T I N A T I O N H O T E L 19 SUITE HK BAR (2,500 SF) BAR OPEN MEETING 1 (1,500 SF) MEETING 2 (1,000 SF) BAY VIEW EVENT TERRACE (2,800 SF) BOARD (600 SF) WALK BAR/LOUNGE POOL TERRACE BAR MARINA TERRACE EVENT VIEW TERRACE EL GUEST ROOMS (18) EX OFFICE (1,000 SF) ROOF (+18’ EL) MECH Second Level Floor Plan SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 20 Uplifting Tones Inspired Gathering Punctuations of Nature + Daylight Bar, Meeting Room, + Event Area Precedents SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 21 Bar, Meeting Room, + Event Area Precedents Fostering Innovation + Communication Limitless Flexibility Kinetically Energizing SO U T H S A N F R A N C I S C O , C A L I F O R N I A OY S T E R P O I N T D E S T I N A T I O N H O T E L 22 L-2 DECK L-2 ROOF 46 ROOMS/FLR TYPICAL 41 ROOMS/FLR TYPICAL NORTHERN VIEWS TO SAN FRANCISCO + MARINA SOUTHERN VIEWS TO THE BAY SUITE SUITE PRES. SUITE SUITE SUITE HK HK SUITE SUITE SUITE SUITE SUITE SUITE SUITE Level 3 Through 6 Floor Plan Seventh Level Floor Plan (Penthouse Level) SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 23 Welcome + Unwind Refreshed Relaxed + Recharged Spa + Guest Room Precedents SO U T H S A N F R A N C I S C O , C A L I F O R N I A OY S T E R P O I N T D E S T I N A T I O N H O T E L 24 TYPICAL GUEST ROOMS TYPICAL GUEST ROOMS PENTHOUSE ROOMS PENTHOUSE ROOMS BAR BAR PATIO PATIO TERRACE LOUNGE POOL TERRACE BAY SIDE EVENT OPEN SPACE BAY VIEW EVENT TERRACE BAY VIEW EVENT TERRACE LOBBY/RESTAURANT LOBBY/RESTAURANT GRAND BALL ROOM ROOF PREFUNCTION BAY SIDE MEETING 2,500 SF6,000 SF BAY SIDE PATIO ARRIVAL/PARKING ARRIVAL/PARKING 12’ 12’ + 85’ MAX + 85’ MAX 10’ 10’ 10’ 10’ 10’ 10’ 10’ 10’ 13’ 13’ 18’ 18’ Building & Site Sections A - A B -B SO U T H S A N F R A N C I S C O , C A L I F O R N I A OY S T E R P O I N T D E S T I N A T I O N H O T E L 25 Rendered Aerial View SOUTH SAN FRANCISCO | CALIFORNIA 2 OYSTER POINT DESTINATION HOTEL RFP SUBMISSION THE VISION scale 1”=60’-0’ SO U T H S A N F R A N C I S C O , C A L I F O R N I A OY S T E R P O I N T D E S T I N A T I O N H O T E L 26 Landscape Site Plan SOUTH SAN FRANCISCO | CALIFORNIA OYSTER POINT DESTINATION HOTEL 2 VISION STATEMENT VISION MOOD VISION DESCRIPTION Oyster point oers an unequal opportunity to enjoy 360 degree vistas, shoreline access and through sustainable and quality design create exceptional places for people to travel, explore and gather. The vision of a building with clean organic forms nestled in the landscape helps to blur the transitions of building and landscape/ indoor and outdoor spaces. A network of circulation paths oer a network of natural and crafted for pedestrians and encourage alternative transportations methods including bikes, ferries and shuttles. The trails and open spaces will oer numerous convergence points where people can sit, meet and enjoy the opportunities. These usable public and private spaces will serve multiple functions and needs and be carefully integrated into the design program. Landscape materials will be environmentally sustainable, reect and tie into the surrounding spaces and oer a high quality of design to make the project viable and enjoyable for visitors and guests. Brisk winds blow o the water and travels over low dunes and soft plantings creating ripples across the grass meadows. Trees shaped by the wind buer the gusts as leaves wobble in the branches. The building appears to be pulled from the landscape as it rises into the skyline while fragments of planting cling to the modern façade. Breaks in the dense tree line oer glimpses into the entry portal and oer an invitation to enter. Cars ght for sunlight in a park like setting where urban needs and natural system blend seamlessly together. A scenic overlook perched uniquely on a rooftop serves as the outdoor “porch” where public and private spaces converge to share and exchange ideas, culture and time. Protected within the shell of the building the pool area acts as a tranquil pond nestled in the landscape and is the hub of activity. Natural trails demand exploration and invite travel beyond the limits of the site and oer users multiple spaces to reect view and be engulfed by the surroundings. · Convergence of travel · Thoughtful environmental design · Integrated environment · Culmination of spaces · Eco-conscious continuous trail network SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 27 Landscape References SOUTH SAN FRANCISCO | CALIFORNIA OYSTER POINT DESTINATION HOTEL 3 scale 1”=60’-0’ LEVEL 2 PLAN Keymap Green Wall Water & Fire Pit Green Wall w/ Cabana Niche Edge Planters Fire Table at Edge Bar Fire Pit 1 2 3 4 5 6 7 1 6 5 3 4 4 7 4 2 SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 28 SOUTH SAN FRANCISCO | CALIFORNIA OYSTER POINT DESTINATION HOTEL 4 THE GROVE Entry Signage Specialty Paving Themed Bollards Tree Grove Valet Station Mounded Mix of Turf & Sand Dunes Parking Structure Access Way Porte Cochere Structure Pedestrian Crossing Specialty Paving Display Parking 1 2 3 4 5 6 7 8 9 10 2 2 scale 1”=30’-0’ Keymap 1 9 7 8 5 10 3 4 4 6 Inspired by the coastal groves and hillside forests, guests will nd a break in the tree massing oering an inviting view into the entry plaza. Natural forms, warm textures and generous planting will embrace the building as it pulls itself into the skyline. The entry experience will support and promote alternative modes of transportation through generous pathways, protected arrivals and multiuse shuttle opportunities. SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 29 SOUTH SAN FRANCISCO | CALIFORNIA OYSTER POINT DESTINATION HOTEL 5 THE GROVE SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 30 SOUTH SAN FRANCISCO | CALIFORNIA OYSTER POINT DESTINATION HOTEL 6 scale 1”=50’-0’ THE PARK Keymap Open Air Parking Structure Parking 10’ Wide Beach Access Path Themed Shade Structure Archways w/ Vines Access to Pedestrian Walk at Garage Structure Vertical Garden at Edge Forest Garden Garden Path to View Terrace 1 2 3 4 5 6 7 8 3 1 +14.5 +15.0 4 8 7 5 2 6 Integrated into the landscape, the parking area will be a unique opportunity to blur the lines between the urban needs of the site and the natural setting it is surrounded by. Selective screening, bermed planting and innovative management and sustainable design will help minimize the impacts and create a distinct park like space. SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 31 SOUTH SAN FRANCISCO | CALIFORNIA OYSTER POINT DESTINATION HOTEL 7 THE PARK SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 32 SOUTH SAN FRANCISCO | CALIFORNIA OYSTER POINT DESTINATION HOTEL 8 scale 1”=20’-0’ Keymap Garden Path Sloped Event Lawn View Terrace Roof Top Garden Over Spa Building Fitness Patio 1 2 3 4 5 1 4 5 4 3 2 +25.0 A unique integration of public and private spaces the garden overlook is intended to serve as a place to bring community together in intimate and comfortable settings. Meandering walkways up to a generous meadow and view deck with re pits and furniture clusters will allow local residents and hotel guests to exchange views and share cultures as they enjoy the panoramic views. THE PORCH SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 33 SOUTH SAN FRANCISCO | CALIFORNIA OYSTER POINT DESTINATION HOTEL 9 THE PORCH SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 34 SOUTH SAN FRANCISCO | CALIFORNIA OYSTER POINT DESTINATION HOTEL 10 scale 1”=40’-0’ THE POND Keymap Lobby Outdoor Seating Area Pool Access Way / Ramp Pool Access Way w/ Steps Ha-Ha Wall Pool Area Fence Pool Boy / Towel Kiosk Typical Cabana W/Green Roof Banquatte Seating w/Fire Tables Fire Pit W/ Water Feature Event Lawn (Small & Large) Beach Trail Fitness Center Patio Spa w/Water Feature & Fire Grand Steps View Alley Sand Dunes w/ Low Native Plantings Banquette Seating w/Eyebrow Shade Structure F & B Garden Patio 1 2 3 4 5 6 7 8 9 2 4 5 6 7 16 15 12 14 8 3 1 11 6 7 4 15 10 8 13 +16.5 +16.0 +15.0 +13.5 9 10 11 12 13 14 15 16 A sparkling gem centered in the protective shell of the building footprint, the pool area will be the social/active centerpiece of the site. Creating distinct outdoor spaces, maximizing the magnicent views and providing multi use year round spaces, guest and visitors will nd this a welcome retreat after a busy day. Natural soft forms and simple sustainable design will make this an environmentally friendly oasis. SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 35 SOUTH SAN FRANCISCO | CALIFORNIA OYSTER POINT DESTINATION HOTEL 11 THE POND SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 36 SOUTH SAN FRANCISCO | CALIFORNIA OYSTER POINT DESTINATION HOTEL 12 THE DUNES Keymap scale 1”=60’-0’ Large Event Lawn Event Lawn & Pool Area Sand Dunes w/Low Plantings & Seating Areas Beach Boardwalk Pathway Beach Access Path Spa Building w/Rooftop View Garden Deck Parking Structure Large Specimen Trees Pool Area 1 2 3 4 5 6 1 5 2 3 6 9 4 8 7 3 7 8 9 Movement and form are the main drivers for this area. The unication of a strong pedestrian network will weave through open meadows, undulating dunes and generous pathways all encouraging exploration and movement. The pathways will follow the natural landforms and mimic the shoreline edge. Places for viewing, reection and gathering will all be oered along the multiple trails surrounding the site. SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 37 SOUTH SAN FRANCISCO | CALIFORNIA OYSTER POINT DESTINATION HOTEL 13 THE DUNES SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 38 MATERIALS SOUTH SAN FRANCISCO | CALIFORNIA OYSTER POINT DESTINATION HOTEL 14SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 39 SOUTH SAN FRANCISCO | CALIFORNIA OYSTER POINT DESTINATION HOTEL 15 TREE IMAGES SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 40 SOUTH SAN FRANCISCO | CALIFORNIA OYSTER POINT DESTINATION HOTEL 16 SHRUB IMAGES SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 41 SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 42 Required Parking [Mun. Code 20.330.06] Guest Rooms (1 Stall per 30 Rooms) : 80 stalls Employee (1/2 stall per 20 Rooms) : 6 stalls Meeting (1 Stall per 50 S.F.) : 230 stalls Lobby (1 Stall per 200 S.F.) : 7 stalls Oce (1 Stall per 200 S.F.) : 7 stalls Total Demand : 330 Stalls* Provided Parking On-Site North P-1 Surface : 22 stalls West P-1 Surface : 118 stalls P-2 Parking Deck : 80 stalls B-1 Subterranean : 100 stalls Total : 320-330 Stalls * The project believes a 20% reduction (46 stalls) of code-required parking for Meeting Space is feasible, due to the following proposed conditions: • On-site Hotel Guests as Meeting Users; • Close Airport Access with Ride-share or Taxi; • Local Bio-Tech Oce Users with Shuttle; and • Alternative Transport Access. NORTH P-1 SURFACE PARKING (22 stalls) 6 6 6 8 8 7 1 3 8 3 0 T 2 4 T 7 8 1 3 3 0 T 1 2 7 8 1 3 3 0 T 12 14 12 12 P-1 DECK PARKING (+14.5’ EL.) (118 stalls) B-1 PARKING DECK (+4.5’ EL.) (100 stalls) P-2 PARKING DECK (+25.0’ EL.) (80 stalls) Parking Summary SOUTH SAN FRANCISCO, CALIFORNIA OYSTER POINT DESTINATION HOTEL 43 SITE AREA : 4.7 AC = 204,732 SF HEIGHT : 85-FT [7-STORIES] PROPOSED PARKING : 285-305 STALLS* SEE PARKING SUMMARY ON PREV. SHEET GROSS AREA LEVEL ONE : 48,000 SF[INCL SPA] LEVEL TWO : 19,000 SF LEVEL THREE THRU SEVEN : 115,000 SF@ 511 SF PER KEY [23,000 SF/FLR] 46 KEY PER TYP. LEVEL TOTAL : 182,000 SF PUBLIC GUEST ROOMS 13'-6" x 28'-0" TYP. BANQUET MEETING SPACE LEVEL TWO : 18 ROOMS LEVEL ONE : 8,400 SF LEVEL THREE THRU SIX : 184 ROOMS BALLROOM : 6,000 SF LEVEL SEVEN : 41 ROOMS BAY VIEW MEETING : 2,400 SF TOTAL : 243 ROOMS LEVEL TWO : 3,100 SF MEETING ROOM 1 : 1,500 SF ROOM BREAKDOWN MEETING ROOM 2 : 600 SF KING : 50% MEETING ROOM 3 : 1,000 SF DOUBLE QUEEN : 35% SUITE : 10-15% TOTAL : 11,500 SF SITE SUMMARY BLDG FOOTPRINT : 48,000 SF 23% PARKING DECK W SURFACE PARKING : 38,500 SF 19% SPA / FUNCTION SPACE W/ LAWN COVERED ROOF: 3,000 SF 1% POOL COURTYARD:: 17,100 SF 8% POOL : 2,700 SF SPA : 130 SF POOL AREA EVENT LAWN : 2,000 SF POOL CABANAS : 600 SF POOL WALKS, PLANTING, AND DECKS : 11,670 SF FRONT ENTRY DRIVE AND SURFACE PARKING : 19,000 SF 9% SERVICE DRIVE AND LOADING ZONE : 10,100 SF 5% OTHER LANDSCAPE FEATURES, INCLUDING PATHS, WALKS, LAWNS, AND PATIOS : 69,032 SF 34% TOTAL : 204,732 SF100.0% Project Summary City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-170 Agenda Date:4/11/2018 Version:1 Item #:2a. Resolution approving the Housing Standing Committee recommendation to select Ensemble Investments as the preferred developer for the Oyster Point hotel site and authorizing the City Manager to enter into an Exclusive Negotiating Rights Agreement with Ensemble Investments. WHEREAS,the City is the owner of certain real property (the “Property”)located in the City of South San Francisco,California,known as County Assessor’s Parcel Number (APN)015-010-600,and more particularly shown as Parcel 6 on Parcel Map 17-0002 attached as Exhibit A; and WHEREAS,on March 23,2011,the City Council approved the Oyster Point Specific Plan and certified the Phase 1 Project Environmental Impact Report which,among other things,planned for and analyzed the potential environmental impacts of developing a new,full-service hotel with up to 350 rooms and 40,000 square feet of retail uses on the Property; and WHEREAS,a Disposition and Development Agreement (DDA)was executed on March 23,2011,between Oyster Point Ventures,LLC,the South San Francisco Redevelopment Agency,and the City of South San Francisco for the master development of Oyster Point,including the potential development of a hotel on the Property; and WHEREAS,the DDA requires Oyster Point Development,LLC,to perform certain site work,grading,and installation of infrastructure to prepare for the Hotel Site for development; and WHEREAS,in 2017,the City solicited proposals from qualified hotel developers through a competitive process beginning with a Request for Qualifications (RFQ)and culminating with a Request for Proposals (RFP); and WHEREAS,submittals in response to the RFQ were reviewed and four developer teams were invited to respond to the RFP; three teams chose to respond; and WHEREAS,on December 11,2017,the City’s Housing Standing Committee interviewed all three responding developer teams and recommended that City Council approve Ensemble Investments to develop a new full- service hotel on the Property and that the City enter into an Exclusive Negotiating Rights Agreement (ENRA) with Ensemble Investments for the development of the Property; and WHEREAS,Ensemble Investments anticipates expending funds to prepare architectural and design drawings City of South San Francisco Printed on 4/16/2018Page 1 of 2 powered by Legistar™ File #:18-170 Agenda Date:4/11/2018 Version:1 Item #:2a. WHEREAS,Ensemble Investments anticipates expending funds to prepare architectural and design drawings and conduct certain studies that are needed to assess the feasibility of the development of the Property,and therefore requires a grant of exclusive negotiating rights in order to be willing to make such expenditures. NOW,THEREFORE,BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby: 1.Approves Ensemble Investments as the preferred developer for the Oyster Point hotel site; and 2.Authorizes the City Manager to enter into an ENRA with Ensemble Investments on behalf of the City in substantially in substantially the same form as attached hereto as Exhibit B;to make any revisions, amendments,corrections and modifications to the ENRA,subject to the approval of the City Attorney, deemed necessary to carry out the intent of this Resolution and which do not materially alter or increase the City’s obligations thereunder; and 3.Authorizes the City Manager to take any other related actions consistent with the intention of the resolution. ***** City of South San Francisco Printed on 4/16/2018Page 2 of 2 powered by Legistar™ T:\1016-OPD\1016-006 OPD Oyster Point SSF Final Map\Survey\Parcel Map\Final Draft\20170907 Sheets 1 & 3 Final Draft O P Final Parcel Map.dwg 9-08-17 12:03:11 PM rcameron Engineering, Surveying & Planning WILSEY HAM 3130 La Selva Street, Suite 100 San Mateo, CA 94403 650.349.2151 wilseyham.com 0 50 100 200 300 0 1 2 3 Engineering, Surveying & Planning WILSEY HAM 3130 La Selva Street, Suite 100 San Mateo, CA 94403 650.349.2151 wilseyham.com T:\1016-OPD\1016-006 OPD Oyster Point SSF Final Map\Survey\Parcel Map\Final Draft\20170907 Sheet 2 Final Draft OP Final Parcel Map.dwg 9-07-17 03:48:03 PM rcameron ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾ PARCEL 1 LINE TABLE LINE BEARING DISTANCE /6ƒ ( /6ƒ ( /6ƒ ( /6ƒ ( /6ƒ ( /6ƒ ( /6ƒ ( /6ƒ ( /6ƒ ( /6ƒ ( /6ƒ ( /6ƒ ( /6ƒ : /6ƒ : /1ƒ : PARCEL 1 CURVE TABLE CURVE RADIUS DELTA LENGTH & ƒ  PARCEL 2 LINE TABLE LINE BEARING DISTANCE /6ƒ : /6ƒ : /1ƒ : /6ƒ : /6ƒ : /1ƒ : /1ƒ ( /1ƒ ( /1ƒ : /1ƒ ( /6ƒ ( PARCEL 2 CURVE TABLE CURVE RADIUS DELTA LENGTH & ƒ  & ƒ  & ƒ  & ƒ    ƒ  5 PARCEL 3 LINE TABLE LINE BEARING DISTANCE /1ƒ : /6ƒ ( /1ƒ ( /6ƒ ( PARCEL 3 CURVE TABLE CURVE RADIUS DELTA LENGTH & ƒ   ƒ  5 & ƒ  T:\1016-OPD\1016-006 OPD Oyster Point SSF Final Map\Survey\Parcel Map\Final Draft\20170907 Sheets 1 & 3 Final Draft O P Final Parcel Map.dwg 9-07-17 03:41:33 PM rcameron Engineering, Surveying & Planning WILSEY HAM 3130 La Selva Street, Suite 100 San Mateo, CA 94403 650.349.2151 wilseyham.com ¾ ¾ ¾ ¾ PARCEL 4 LINE TABLE LINE BEARING DISTANCE L20 6ƒ :64.44' L26 1ƒ (27.24' PARCEL 4 CURVE TABLE CURVE RADIUS DELTA LENGTH C4 68.43'ƒ 21.72' T:\1016-OPD\1016-006 OPD Oyster Point SSF Final Map\Survey\Parcel Map\Final Draft\20170907 Sheet 4 Final Draft O P Final Parcel Map.dwg 9-07-17 03:49:15 PM rcameron Engineering, Surveying & Planning WILSEY HAM 3130 La Selva Street, Suite 100 San Mateo, CA 94403 650.349.2151 wilseyham.com ¾ ¾ ¾ ¾ ¾ ¾ T:\1016-OPD\1016-006 OPD Oyster Point SSF Final Map\Survey\Parcel Map\Final Draft\20170907 Sheet 5 Final Draft O P Final Parcel Map.dwg 9-07-17 03:50:14 PM rcameron PARCEL 5 LINE TABLE LINE BEARING DISTANCE /6ƒ : /1ƒ : /6ƒ : /6ƒ : /6ƒ : /6ƒ : /6ƒ : /1ƒ : /1ƒ : /6ƒ : /6ƒ : /6ƒ : Engineering, Surveying & Planning WILSEY HAM 3130 La Selva Street, Suite 100 San Mateo, CA 94403 650.349.2151 wilseyham.com PARCEL 6 LINE TABLE LINE BEARING DISTANCE /1ƒ : /6ƒ : /6ƒ : /1ƒ : DRAFT EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT ENSEMBLE INVESTMENTS -0- EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT by and between ENSEMBLE INVESTMENTS and CITY OF SOUTH SAN FRANCISCO EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT ENSEMBLE INVESTMENTS -1- THIS EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT (this “Agreement”) is entered into by and between the CITY OF SOUTH SAN FRANCISCO, a municipal corporation (“City”), and ENSEMBLE INVESTMENTS, LLC, a California Limited Liability Company (“Developer”), dated as of (the “Effective Date”). City and Developer are each referred to as (“Party”) or collectively referred to as the (“Parties”). WHEREAS, the City is the owner of certain real property (the “Property”) located in the City of South San Francisco, California, known as County Assessor’s Parcel Number (“APN”) 015-010-600, and more particularly shown as Parcel 6 on Parcel Map 17-0002 recorded on September 25, 2017, attached hereto as Exhibit A, and incorporated herein by this reference; and, WHEREAS, on March 23, 2011, the City Council approved the Oyster Point Specific Plan and certified the Oyster Point Specific Plan and Phase 1 Project Environmental Impact Report which, among other things, planned for and analyzed the potential environmental impacts of developing a new full-service hotel with up to 350 rooms and 40,000 square feet of retail uses on the Property; and WHEREAS, a Disposition and Development Agreement was executed on March 23, 2011, between Oyster Point Ventures, LLC, the South San Francisco Redevelopment Agency, and the City of South San Francisco (“DDA”) for the master development of Oyster Point through a multi- phased project, which included the potential development of a hotel on an approximately 4.7 acre portion of the Property known as the “Hotel Site,”; among other things, the DDA requires Oyster Point Development, LLC, to perform certain site work, grading, and installation of infrastr ucture to prepare for the Hotel Site for development; and, WHEREAS, in 2017, the City solicited proposals from qualified hotel developers through a RFQ/RFP process, and upon review of the responsive proposals, the City’s Joint Housing Standing Committee made a recommendation at its December 11, 2017, meeting that the City enter into an Exclusive Negotiating Rights Agreement (“ENRA”) with Developer for the development of a new full-service hotel on the Hotel Site; and, WHEREAS, the City is interested in ground leasing the Hotel Site to Developer in a manner consistent with the DDA and this ENRA, contingent upon Developer preparing all appropriate environmental review documents, applying for land use entitlements from the City, and, if such entitlements are granted, constructing a full-service hotel (“Project”) on the Hotel Site as more particularly described in Exhibit B attached hereto and incorporated herein by this reference as the Development Proposal (“Development Proposal”); and, WHEREAS, Developer anticipates expending funds to prepare architectural and design drawings and conduct certain studies that are needed to assess the feasibility of the Project and seek any additional land use entitlements, and therefore requires a grant of exclusive negotiat ing rights in order to be willing to make such expenditures; and, WHEREAS, at its meeting on ____________________, 2018 the City approved this Agreement and directed staff to commence negotiating the terms of a Lease Disposition and Development Agreement (“LDDA”), with a form of Ground Lease Agreement for the Hotel Site -2- attached as an exhibit to the LDDA, in order for the Developer to pursue land use entitlements for the Project. 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 agree, for the term of this Agreement, to negotiate diligently and in good faith the terms of a LDDA and Ground Lease Agreement for the Hotel Site. Furthermore, the Parties agree to diligently and in good faith pursue any third-party consent, authorization, approval, or exemption required in connection with the preparation and execution of a LDDA and Ground Lease Agreement for the future development of the Project on the Hotel Site. This Agreement does not, however, impose a binding obligation on City to convey any interest in the Hotel Site to Developer, nor does it obligate City to grant any approvals or authorizations required for the development of the Project on the Hotel Site. a. If City believes that Developer is not negotiating diligently and in good faith, City 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 City. If this Agreement is terminated by City pursuant to the above sentence, Developer acknowledges and agrees that City will suffer damages, including lost opportunities to pursue other development alternatives for the Hotel Site. Therefore, the Parties agree that if this Agreement is terminated as provided above, City will retain the full Payment and Deposit amounts (as defined in Section 5 of this Agreement, infra), plus any interest thereon, as fixed and liquidated damages and not as a penalty, and following such termination neither Party will have any further rights against or liability to the other under this Agreement, except as set forth in Section 15 of this Agreement. b. If Developer believes that City is not negotiating diligently and in good faith, Developer will give written notice thereof to City which will then have ten (10) business days to commence negotiating in good faith. Following the failure of City 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, City will return a prorated portion of the Deposit to Developer in accordance with the provisions of Section 5(c) of this Agreement and neither Party will have any further rights against or liability to the other under this Agreement, except as set forth in Section 15 of this Agreement. c. If the Parties proceed to negotiate diligently and in good faith, but are unable to reach agreement on the terms of a LDDA and Ground Lease Agreement, then City will return a prorated portion of the Deposit to Developer in accordance with the provisions of Section 5(c) of this Agreement and neither Party will have any further rights against or liability to the other under this Agreement, except as set forth in Section 15 of this Agreement. -3- 2. Developer’s Exclusive Right to Negotiate With City. City 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 Hotel Site or the development of the Hotel Site, and City 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 Hotel Site or any portion thereof. Furthermore, City 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 Hotel Site or any portion thereof. 3. Term. a. The term of this Agreement (“Term”) commences on the Effective Date, and will terminate six (6) months from the Effective Date, unless extended or earlier terminated as provided herein. b. During the Term, Developer will provide City with written reports every thirty (30) days that summarize Developer’s actions taken in furtherance of this Agreement, including but not limited to: due diligence review of the Hotel Site, commencement of any environmental requirements under the California Environmental Quality Act (“CEQA”), preparation of architecture and construction plans, attendance at City meetings, master developer meetings, adherence to a mutually agreed upon master schedule, and general progress towards future development of the Hotel Site. c. The Term of this Agreement may be extended for up to a maximum of two separate ninety (90) day periods upon the receipt of an additional non-refundable payment by Developer of twenty-five thousand dollars ($25,000) for each ninety day extension period (“ENRA Extension Payment”), and the consent of the City acting through and at the discretion of its City Manager, or his/her designee (“City Manager”). Developer understands that the City will only consider extension(s) of the Term of this Agreement where Developer has demonstrated, to the City’s satisfaction, substantial progress toward development of the Hotel Site, including, but not limited to, submittal of a development application, submittal of environmental review documents necessary to satisfy compliance with CEQA, submittal of architecture and construction plans, payment of any applicable processing and plan check fees, or pursuing land use entitlements for the Project. 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. Deposit and Payment to City. a. In consideration for the right to exclusively negotiate under this Agreement, Developer will, within five (5) days of the Effective Date, remit to City a deposit in the amount of One Hundred Thousand Dollars ($100,000), which if a LDDA is -4- executed that includes a final form of a Ground Lease Agreement, the deposit will be credited toward the rent payable under the final negotiated ground lease (“Deposit”). City will deposit the Deposit in an interest bearing account of the City and any interest, when received by City, will become part of the Deposit. During the term of this Agreement, Developer will reimburse City for all reasonable staff and City consultant time incurred in preparing the LDDA and Ground Lease Agreement, and any related documents for the disposition of Hotel Site to Developer. Developer will, within five (5) days of the Effective Date, remit to City a payment in the amount of Twenty-Five Thousand Dollars ($25,000) in immediately available funds (“Payment”). Any funds previously deposited by Developer pursuant to a completed preliminary application will be credited towards the Payment. City will deposit the Payment in an interest bearing account of City and any interest, when received by City, will become part of the Payment. The Payment may be drawn upon by City to reimburse staff, City Attorney, and City consultant costs for preparing the LDDA and any related documents, including but not limited to the form of Ground Lease Agreement, at their standard published hourly rates. Should the full amount of the Payment be exhausted during the Term of this Agreement, City may require the Developer to provide additional funds necessary to reimburse staff and consultant costs expended in connection with preparation of the LDDA and any related documents, including but not limited to the form of Ground Lease Agreement,. Documentation of City’s rate schedule for staff, staff time spent, and consultant costs will be retained by City and provided to Developer upon request. b. City agrees to account for the Deposit and Payment, interest earnings, and any expenditures made in furtherance of this Agreement. c. In the event that Developer terminates this Agreement before the expiration of the Term pursuant to Section 1(b) or Section 14(c), the City will return any prorated portion of the Deposit to the Developer. The prorated Deposit will be calculated by dividing the full $100,000 Depositby the number of months in the Agreement Term. This amount will be multiplied by the number of months remaining on the Term at the time of Developer’s termination. The resulting figure will be the prorated Deposit that the City will pay to the Developer. d. In the event the Agreement is terminated by either Party for any reason other than Developer’s breach of its obligations under this Agreement, the remaining balance of the Payment and any interest earned will be returned to Developer, minus amounts that the City retains attributable to the amount of costs and consulting fees actually and reasonably incurred and documented by City in implementing this Agreement, as set forth in subsection (a) of this Section 5. e. In addition to the payments to City 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 adopted Master Fee Resolution and any applicable cost recovery and indemnification agreements. -5- 6. Terms and Conditions of the LDDA and Ground Lease Agreement. The Parties agree to use diligent and good faith efforts to successfully negotiate a LDDA, including a final form of Ground Lease Agreement which would be attached to the LDDA, the conditions of closing and delivery of the final Ground Lease Agreement, and the scope of Developer’s obligations to design and construct improvements on the Hotel Site including, but not limited to, project design, access to recreational amenities, and programming of the hotel. The Parties agree that the terms of the LDDA and form of Ground Lease Agreement shall be based on those terms set forth herein and in Exhibit B, attached hereto and incorporated herein by reference. 7. Developer’s Studies; Right of Entry. a. During the Term of this Agreement, Developer will bear all costs and expenses associated with preparing 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. Developer will have rights of access to the Hotel Site to prepare Developer’s Studies. b. Developer hereby agrees to notify the City seventy-two (72) hours in advance of its intention to enter the Hotel Site. c. As construction commences on Phase 1 of adjacent developments by Oyster Point Development, LLC, Developer will, with City’s support, make diligent and good faith efforts to coordinate its development efforts with the master construction schedule for Phase 1 to ensure there is no disruption of access to the Hotel Site. d. Developer will provide the City with work plans, drawings, and descriptions of any intrusive sampling it intends to do. Developer must keep the Hotel Site 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. e. Without limiting any other indemnity provisions set forth in this Agreement, Developer shall indemnify, defend (with counsel approved by City) and hold the City, its officials, officers, employees, and volunteers 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. Developer’s indemnification obligations set forth in this Section 7 shall survive the termination of this Agreement. f. If upon expiration of the Term of this Agreement the Parties have not successfully negotiated a LDDA and Ground Lease Agreement, Developer will, upon City’s written request, provide City within fifteen (15) days following said date of expiration copies of any non-proprietary Developer’s Studies prepared by third parties completed by such date. Developer will also provide City with copies of any -6- non-proprietary Developer’s Studies prepared by third parties completed after the expiration of the Term within fifteen (15) days following completion of such studies, or if Developer intends not to complete any such Developer Studies, Developer will provide City with copies of such uncompleted studies. 8. City’s Reports and Studies. Within twenty (20) days following the Effective Date, City will make available or make arrangements to make available to Developer for review or copying at Developer’s expense all non-privileged studies, surveys, plans, specifications, reports, and other documents with respect to the Property that City has in its possession or control, which have not already been provided to Developer. Studies or documents prepared by City and its agents solely for the purpose of negotiating the terms of a LDDA and Ground Lease Agreement and related documents are not required to be provided by City to Developer and are excluded from this requirement. 9. Developer’s Pro Forma, Evidence of Financing and Project Schedule Related to Potential Approval of a Ground Lease. a. At least 45 days prior to City consideration of the Project entitlements, Developer will provide City with a pro forma for the Project that confirms the financial feasibility of Developer’s proposed development of the Hotel Site, estimated project budget, project schedule, and planned financing for the Project. The parties agree that the LDDA will contain language that provides that: (1) not later than forty-five (45) days prior to the execution and delivery of the final ground lease, Developer will provide evidence satisfactory to City that Developer has secured binding commitments, subject only to commercially reasonable conditions, for all funding necessary for the successful completion of the Project, and (2) issuance of a building permit for the Project shall be a condition of execution and delivery of the final Ground Lease Agreement. b. Prior to the end of the term of the ENRA, Developer will provide the City with the following deliverables: i. Complete schematic (35%) construction drawings; ii. Final agreed upon termsheet for the LDDA, and the form of Ground Lease Agreement; iii. Proof of initial outreach conducted with key stakeholder groups, in coordination with the City; and iv. A short list of hotel brands that have indicated conditional interest in the site. 10. Full Disclosure. Developer is required to make full disclosure to City of its principals; officers; major stockholders, partners or members; joint venturers; negotiators; development managers; consultants and directly involved managerial employees (collectively, “Developer Parties”). Any material change in the identity of the Developer Parties will be subject to the approval of City Manager and his or her designee, which will not be unreasonably withheld. Developer also agrees to disclose both the type of planned -7- financing and identity of any lenders or mortgagees in connection with the financing of the Project. 11. Periodic Reporting to Governing Bodies. City will report periodically to the City Council and other local and regional agencies, 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. 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. 13. No Binding Committments. City has no legal obligation to grant any approvals or authorizations for the ground lease of the Hotel Site or any development thereon until the LDDA and Ground Lease Agreement have been approved by the City Council. Such approvals, and any future approvals required as part of the entitlement process, are subject to completion of environmental review by City in accordance with CEQA, and City shall not take any discretionary actions committing it to a particular course of action in connection with the Project until City has completed, considered and certified/approved any additionally required CEQA environmental review documents. 14. Termination. a. This Agreement may be terminated by mutual consent. b. City 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 in accordance with the provisions set forth in Section 1 of this Agreement. c. Developer will have the right to terminate this Agreement upon its good faith determination that City is not proceeding diligently and in good faith to carry out its obligations pursuant to this Agreement in accordance with the provisions set forth in Section 1 of this Agreement. d. Developer will have the right to terminate this Agreement if the results of Developer’s investigation of the Hotel Site 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. If Developer terminates this Agreement pursuant to this Section 14(d), then City will return a prorated portion of the Deposit to Developer in accordance with the -8- provisions of Section 5(c) of this Agreement and the remaining balance of the Payment in accordance with the provisions of Section 5(d), and neither Party will have any further rights against or liability to the other under this Agreement, except as set forth in Section 15 of this Agreement. e. Neither Party will have the right to seek an award of damages if this Agreement is terminated pursuant to this Section. 15. 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 Ground Lease Agreement, this Agreement will terminate, 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 5 (Payment to City), Section 7(d) (Indemnification), Section 12 (Confidentiality; Dissemination of Information), Section 17 (Indemnification), and Section 21 (Brokers) will survive such termination. Provided further, that upon termination or expiration of this Agreement without the Parties having successfully negotiated a LDDA and Ground Lease Agreement, Developer will deliver to City any non-proprietary Developer’s Studies pursuant to the provisions of Section 7 of this Agreement. 16. 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 by: 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. Facsimile transmission, in which case notice will be deemed delivered upon transmittal, provided that i. A duplicate copy of the notice is promptly delivered by first -class or certified mail or by overnight delivery, or ii. A transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile will be considered to have been received on the next business day if it is received after 5:00 p.m. recipient’s time or on a nonbusiness day. City : City of South San Francisco Attn: City Manager -9- 400 Grand Avenue South San Francisco, CA 94080 Tel (650) 877-8501 Fax (650) 829-6609 [email protected] cc: [email protected] with a copy to: Meyers Nave Attn: Jason Rosenberg 555 12th Street, Suite 1500 Oakland, CA 94607 Tel (510) 808-200 Fax (510) 444-1108 [email protected] Developer: Ensemble Investments Attn: Brian Ehrlich 2603 Camino Ramon Suite 200 San Ramon, CA 94583 Tel (415) 652-9920 [email protected] with a copy to: Arent Fox LLP Attn: M.J. Pritchett 55 2nd Street, 21st Floor San Francisco, CA 94105 Tel (415) 757-5501 Fax (415) 757-5501 [email protected] 17. Indemnification. Developer hereby covenants, on behalf of itself and its permitted successors and assigns, to indemnify, hold harmless and defend City and its 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 any breach of this Agreement by Developer or arising out of or in connection with Developer’s access to and entry on the Property pursuant to Section 7 of this Agreement; provided however, Developer will have no indemnification obligation with respect to the gross negligence or willful misconduct of any Indemnitee. 18. 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 app lication of such terms and provisions to circumstances other than those as to which it is held invalid -10- or unenforceable unless an essential purpose of this Agreement would be defeated by loss of the invalid or unenforceable provision. 19. 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. 20. 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 is permitted to assign this Agreement without such written consent, provided that Developer assigns this Agreement to an entity that is controlled by Developer. 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. 21. Brokers. Each Party warrants and represents to the other that no brokers have been retained or consulted in connection with the selection of the Developer. 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. 22. Amendments. Unless otherwise provided in this Agreement, the City Manager will be authorized to enter into all written amendments, consents or waivers under this Agreement on behalf of the City without further authorization by the City Council. Nothing herein, however, will be deemed to prevent the City Manager from requesting formal approval by the City Council if the City Manager, in his or her sole discretion, determin es to seek such approval. 23. Captions. The captions of the sections and articles of this Agreement are for convenience only and are not intended to affect the interpretation or construction of the provisions hereof. 24. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California. ~ SIGNATURES ON FOLLOWING PAGE ~ -11- IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. CITY By: _______________________________ Mike Futrell City Manager ATTEST: By: _______________________________ City Clerk APPROVED AS TO FORM: By: _______________________________ Jason Rosenberg City Attorney DEVELOPER By: _______________________________ APPROVED AS TO FORM: By: _______________________________ Counsel for Ensemble Investments -12- Exhibit A PROPERTY -13- Exhibit B DEVELOPMENT PROPOSAL Criteria Type of land use agreement Lease Disposition and Development Agreement, with a Ground Lease Agreement as an exhibit Proposed Ground Lease Payment $500k Base + 0.5% of Gross Revenue (or financial equivalent) at project stabilization, subject to CPI increases every five years thereafter 50% TOT rebate for a ten year period Lease Term TBD Deposit $100,000 Deposit to be credited against future rent under the Ground Lease. Payment $25,000 for reimbursement of staff time, which if exhausted, Developer may be required to provide additional funds ENRA Extension Payment $25,000 additional non-refundable payment for each City approved extension of 90-days with a maximum of two separate 90-day extension periods Development Type Ground-up construction hotel Hotel Brand Full service, upper upscale or upscale hotel with: - Complimentary services for hotel guests and the public, which may include restaurants, cafes, day spas, and similar - Meeting and conference space - Nationally-recognized brand with competitive travel rewards program - Customizable design like Hilton Curio or Canopy Proposed Height of Hotel 7 floors Proposed Number of Rooms One full service hotel with 243 rooms Proposed Food and Beverage 4,000 SF Proposed Meeting Space 11,500 SF Proposed Project Amenities Common space and open space of up to 1.5 acres -14- Parking 330 stalls Performance Milestones for:  Negotiation of a Lease Disposition and Development Agreement and form of Ground Lease Agreement  Execution of Lease Disposition and Development Agreement  Developer will apply for a Precise Plan, pursuant to the Oyster Point Specific Plan and DDA  Project Entitlement  Building Permit Issuance  Execution of Ground Lease Agreement  Master Schedule