HomeMy WebLinkAboutOrd. 1571-2019 (19-189)City of South San Francisco P.O. Box 711 (City Hall,
400 Grand Avenue)
South San Francisco, CA
City Council
Ordinance: ORD 1671-2019
File Numbeir- 19-189 Enactment Number: ORD 1571-2019
ORDINANCE APPROVING THE THIRD AMENDMENT TO
"FRE DEVELOPMENT AGREEMENT FOR 201-219 GRAND
AVENUE AND 41.8 LINDEN AVENUE PROPERrIES WITH
ROEMDEVELOPMENT CORPORATION.
WHEREAS, the City of South SanFrancisco ("City") is the owner of certain real property located in the
City of South Sara Francisco, California, with the address of 418 LindenAve nue, known as County
Assessor's Parcel Numbers ("APN") 012-314-010 ("418 Linden"); and
WITER EAS, the City is also the owner of forinerRedevOopment Agency property located in the City of
South San. Francisco, California, with the address of 201-219 Grand Avenue, known as A.PNs
012-316-100,012-316410, 012-316-080 and 012-316-090 (collectively, "201 Grand Avenue"); and
WHEREAS, inn .Decernber 201.5 the City approved entitlements for a residential project at 418 L,inden
Avenue and a mixed. -use project at 201 Grand Avenue ("Project"); and,
WHEREAS, in December 201.6, following a competitive process, the City and Agency selected a
developer, ROEM Development Corporation ("Developer"), to develop the 418 Linden.Avenue and 2011.
Grand Ave nuePrefects; and,
WHEREAS, the City Council certified an Environmental Impact Report ("EIR") on January 28, 2015
(',34ate Clearinghouse number 2013.1.02001) in accordance with the provisions of CPC A and CEQA
Guidelines, which analyzed. the potential environmental inipacts of the development of the Downtown
Station Area Specific Ptan; and,
WHEREAS, the 418 Linden Avenue and 201 Grand Avenue Projects are both within the Downtown.
Station Area Specific Plan ("DSASP") area and were found to be within the parameters analyzed within
the DSASP EIR; and,
WHEREAS, the Project will not result in any new significant environmental eflects or a substantial
increase in the severity ofany previously identified effects beyond those disclosed and analyzed in the
DSASP MR, and wound. not constitute a change in circumstances that would require additional
environmental review; and.,
WHEREAS, the Planning Commission held a properly noticed public bearing on July 6, 2017 to solicit
public comment and consider the proposed entitlements, take public testimony, and make a
recommendation to the City Council on the Project; and
City of South San Francisco Page 9
File Number: 1g-1 g Enactment Number., ORL) 1571 2019
WHEREAS, on September 6, 2017, the City Council ("Council") approved two Purchase and Sale
Agreements, two Aff-ordable HousingAgreements ("AllAs"), and an Developy.nent.Agreetnent between
the City and the Developer for the properties at 201 Gran ndAvenue aand 4l.8 LindenAvenue, and
WHEREAS, pursuant to Section 7.2 of the Development Agreement, any amendment to the
Development Agreernent which the City deteriffines is minor and does not substantially affect the term
and schedule of perforrnance is considered an administrative agreement amendment; and
II PEAS, in January 2018,Developer requested more time to develop an demolition strategy and
demolition drawings and requested a 120 day extension to the performance Schedule in the Purchase and
Sale Agreements and DevOoPmentAgreement without adjusting the overall pr(Ject completion date; and
WHEREAS, on March. 28, 201.8.Developer and City entered into the First Administrative Amendments
to the Purchase and Sale Agreements andDevelopment Agreement ("First Amendment") to modesfly
extend the deadlines within the Perfori-nance Schedule in. order to provide sufficient time to undertake
the complex demolition presented at 201-219 Grand Avenue; and
WHEREAS, in July 2018, Developer received Housing Authority of die County of San Mateo
("FI.A.CSM") vouchers for twelve of the Below Market Rate units ("13MRs"), which will provide
approximately $1.5 million to finance the ,project; and
WIIEREAS, in July 2018, Developer entered into the Second Amendment to the Development
Agreerneirt extending the deadlines by a further 90 days; and
WHEREAS, on November 1.4, 20 18., the City Council authorized City staff to prepare the documentation
approving the one-year time extension, ain adjustment in the Affordable Housing Agreenient's.AMI from
20 percent to 100 percent, and demolition prior to conveyance; and
WHEREAS, the one-year extension and the adjustment in tine AMC do not impact the City's General
Fund -, and
WHEREAS, the performance Schedule in the Development Agreement now needs to be further
anierided in order to acconnin.odate the one-year extension, as set ffirth in Exhibit A; and
WHEREAS. the Developer has not requested a change in entitlements, and the Project as currently
entitled is located within the DSASP area and remains within the para rarnetersanalyzed within the DSASP
EIR; and,
WHIa;_REAS, the proposed 'rhird Amendment to the Development Agreement will not result in any new
significant environmental effi)cts or a substantial increase in the severity of any previously identified
effects beyond those disclosed and analyzed in the DSASP EIR, and wound not constitute a change if]
circumstances that would require additional environmental review; and,
WI-JEREAS, pursuant to Section 19.60.100 of the South San Francisco Municipal Code, the proposed
Third Amendment to the Development Agreement is consistent with the objective, polices., general land
City of South San Francisco Page 2
File Number 19-189 E'nactrnent Nuinber� OnD 1571-2019
uses and programs specified in. this General Plan and theDowntown. Station Area Specific Plan District
to provide high density residential housing; is compatible with the uses authorized in, and the regulations
prescribed for the Downtown. Transit Core and Grand Avenue Core sub -districts; is in conformity with
public convenience, general welfare and good land use practice because the project will provide 13MR
units for City residents; will not be detrimental to the health, safety and general welfare; and will not
adversely affect the orderly development of property or the preservation. of property valued.
WHEREAS. the Planning Com mission held a properly noticed public hearing on January 24, 201.9 to
solicit public cominent. and consider the proposed Third Amendment to the Development Agreement,
take public testimony, and made a recommendation to the City Council. to adopt an ordinance approving
the Third Amendment to the Development Agreement for the Project; and
WFLEREAS, the City Council held a properly noticed public hearing on February 27, 2019 to solicit
public comment and consider an ordinance adopting the proposed ThirdAmendment to the Development
Agreement, and take public testimony on the Project; and
WHERE,AS, the City Council, by a 5-0 vote,, introduced the ordinance �,md waived further reading; and,
NOW, THE111,1011E, based oil the entirety of the record before it, which includes without fitnit�ation, the
California Environmental Quality Act, Public Resources Code §21000, et seq. and. the CEQA
Guidelines, 14 California Code of Regulations § 15000, et seq.; the South San Francisco General Plan,
and General Plan EIR.; the Downtown. Station Area. Specific Plan and the Downtown Station Area
Specific Plan EIR; the South San Francisco Municipal Code; the Project applications; a.11 site, plans, and
all reports, minutes, and public testimony submitted as part of the Planning Commission's duly noticed
meetings
ings on July 6, 2017 and January 24, 2019 and the City Council's duly noticed meetings on
September 6, 201.7 and February 27, 20.11.9; Planning Commission and City Council. deliberations; and
any other evidence (within the meaning of Public Resources Code §21080(e) and §21082.2), the City
Council of the City of South Sari. Francisco hereby finds as follows:
NOW, T1EREFOIU-, BE IT ORDAINED that based on the entirely of the Record before it, as described
below, the City Council of the City of South Sari I-,rancisco does hereby ORDAIN as follows:
SECTION 1, FINDINGS,
A. General Findings,
1. The foregoing recitals are true and correct and made a part of this Ordinance.
2. The Development Agreement (Exhibit A) and its attachments, is incorporated by reference and made
a part of this Ordinance, as if they were each set forth fully herein.
3. The documents and other material constituting the record for these proceedings are located at the
Planning Division for the City of South San Francisco, 315 Maple Avenue, South San Francisco, CA
94080, and in the custody of the Chief Planner, Sailesh Mehra.
City of South San Frandsco Page 3
File Number 19-189 Enactment Number ORD 1571-2019
4,, The 418 Linden Avenue and 201 Gru.id Avenue Projects are consistent with tile General Plan by
creating as mixed-use environtnent that. emphasizes pedestrian -,activity with buildings built up to the
property line on Linden.Avenue and Grand Avenue, resp ectively, provide well-articu lated and visually
engaging development that implements the goals of the Downtown Station Area Specific Plan, are
consistent with the ('.'ity's Design. Guidelines as they relate to building design, form and articulation aiiid,
in the case of the 201 Gr,-md Avenue project, provide comirnercial uses along both. Grand and Cypress
Avenues.
B. Development Agreement
I . 71e Developer and City have negotiated as Development Agreement pursuant to Government Code
section 65864 et seq. The Development Agreement, attac.hed hereto as Exhibit A, sets for the duration,
property, project criteria, and other required infonnation. identified in Governrnent Code section 65865.2.
Based on the findings in support of the Project, the City Council finds that the Developmerit Agreement
is consistent with tile objectives, policies,general land uses and programs specified in. the South San
Francisco General Plan and any applicable zoning regulations.
2. 'The DevelopmentAgreeinent is compatible with. the uses authorized in, and the regulations
prescribed 1k.)r the land use district in which the ireaal. property is located -The subjed. site is suitable fi:)r
the type and intensity of th.e.1and use being proposed. The General Plan specifically contemplates the
proposed type of pr(Ject and the suitability of the site tbr developinent was analyzed thorouO!ly ire the
environmental document prepared.for the Project,
3. The Devek:)fnnentAgreernent is in confonnity with public convenience, general welfare and good
land use practice.
4. The DevelopnwntAgreernent will not be detrimental to the health., safety and general welfitre.
5. The DevelopmentAgreernent will not adversely aMct the orderly development of property orthe
preservation of property values.
SECTION 11. D.EV'EI.C)IIMEN,rA,.G.'Rl.',EMFNI
The City Council of the City of South. San Francisco herchy:
Approves the Third aimendment to the Development Agreement between IROEM Development
Corporation and the City of South San Francisco for the development of the properlies located at 418
Linden Avenueand 201-2.19 Grand Avenue, attacti[ed hereto as Exhibi.t A, and. incorporated herein,
Authorizes the City Manager to enter hit.(,) and execute the Development.Agreeiri.ent on. behalf of the City
("'ouncil in substantially the same fbnn as attached hereto as Etidbit - to inake mvy revisions,
City of South an Francisco Page 4
File Number 19-189 Enactment Number ORID 1571-2,019
antendinents, or, modifications, subject to the approvall of the� City Attorney, deenied necessary to carry
out the inten.t ofthis Ordinance and which do not materially alter or increase the City's obligations
thereunder.
SEC,ri(,')N iii. SEVERABILITY.
.If army, provision of this Ordinance or the application thereof to any person. or circunistance is held. invalid
or unconstitutional, the remainder of this Ordinance, including the apphoation of such part or provision.
to other persons or circumstances shall not be al.fected thereby arid shall continue in.full force and efTect.
To this end, provisions of this Ordinance are severable. The City Council of the City of South San
Francisco hereby declares that it would have passed each section, subsection, subdivision, paragraph,
sentence, clause, or phrase hereof irrespective of the fact that any one or more sections,, subsections,
subdivisions, Iparagraplas, sentences, clauses, or phrases be held unconstitutional, invalid, or
unenforceable.
SECTION W. PUBLICNHON AND EFFEC171VE DXIE',
Within fifteen (15) days after the adoption of this Orditrance, the City Clerk shall publish dre Ordinance
at least once, with (he names of those city council.ff.rembers voting forand against the ordinance, in a
newspaper of general circulation published and circulated in. the City This Ordinance shall become
et-Tective thirty, (30) days from and after its adoption.
At a nreefing of the City COUTICH OD 3/13/2019, a motion was made by Richard Garbarino, seconded by
Buenaflor Nicolas, that tins Ordinance be adopted, 'Iffie motion 1passed.
Yes: 5 Mayor Matsumoto, Vice Mayor Garbarino, CouncilmemberAddie go,
Councilmeniber Na ales, and Councilmember Nicolas
Attest by
.osa Govea Acosta
........... ...
Karyt"MaRf, 11 oto
City of South Son FrancLwo Page 5
Recording Requested by
and when Recorded, return to:
City of South San Francisco
400 Grand Ave
South San Francisco, CA 94080
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103,27383
THIRD AMENDMENT
TO DEVELOPMENT AGREEMENT
Thig lldrd Atnendry.i.ent to E)ciTel.oprncrit:.AreetT.ii(,,-,nt C"I I hird Atriendmen t") is enteredintc)
by and between. R..(..,)EM Devdol.)mcnt Corporatiori, a Cafifornia corporation ("Devetoper") and the
CJTY OFS01.7111. SAN FRANCISCO, a tnunicipall. corporation ("City") on. this . ...................................... day of
� 2019„
RECITALS
A. PUrsuant to C ityr Couracil Ordirian.ce No. 1541 20117 ("DA. Ordinance"), the City entered
intoa Dcveloprnent Agreement between (.Aiq and Developer (T evelopment Ag
reetriciat") for the
development of a residential f)roject at 41.8 Linden Avern-te and a fflixed-use project at 201-219
Grand.Avcnue (together, the "Pr(..�ject").
B, Pursuant to Section '72(a) of the Dveloprrient Agreement, ariy amenchrient to the
Development Agrcerrient whic-l'i the City detertnines is ininor and on: not st:iibstandally aff(..-.ct the
tenn and sc:he&-de of per fc)rrnance is (.-�considered an administrativc agreement arrnenchnent.
C I
. On March 28, 2018, Developer and City entered into that certain.
Amen.chnent to Development Agrecrnent wh.ereby the parties agrccd to
rnodestly adjust the deactlincs within the Performance Sc hcdule contained vvithin the Development
Agreement in order to provide st-Ifficient time to undertake the corriptex dernolition presented at
201-219 (3rand.Avenue. On Aug.ist 23, 2018, Developer and City entered into a Secoll(J.
Amendment to the ].�(zvclopment -Agreement ("Sccond Amendment") to fUrther adjust the deadlines
Wit.hin the Schedule of Perft.mnance contained in tlie, First Amendment to dic. Development
Agreement and Firstt Arnendraern to the.purchase, an(] Sale Agreernents for thc, Project.
a On November 9, 2018, Developer subt.nitted aletter to City detailing its desire, and
reques(: U.) nrrnoclify the n.ufnbet of bcb..)w market rate unfts v7ithin th.c.project and outlining the
cor.r.c.,sponding need for a 1.2--mo.r .th. extension of firne to secure the necessary affordable housing
fundingy sourc.es.
E. The City has determined that additional affordable housing is desirable to the City, and it is
willing to extend the Schedule of Performance for an additional 12 -month period so Developer may
secure such financing, provided that Developer engages in certain pre -construction activities,
specifically causing improvements and structures located on the Grand Property to be demolished.
F. The additional time requested adjusts the overall Project completion date by twelve-
months. Pursuant to Section 7.2(b) of the Development Agreement, the City has determined that
this Third Amendment requires notice and public hearing, and shall be approved by ordinance.
NOW, THEREFORE, in consideration of the mutual covenants and promises of the
parties herein contained, the City and Developer agree as follows:
AMENDMENT TO AGREEMENT
1. Recitals. The foregoing recitals are true and correct and hereby incorporated herein.
2. Defined Terms. All capitalized terms not defined herein shall have the meanings ascribed
to them in the Development Agreement.
3. Amendment to Recital E. As set forth in the recitals to this Third Amendment, the City
approves Developer's proposal to revise the Project so that all units within the Project not
used as a "manager unit" are below market rate (affordable) housing. Recital E of the
Development Agreement shall be stricken in its entirety and replaced with the following:
E. As set forth herein, upon Developer's acquisition of the Properties,
Developer shall re -develop the Grand Project Site into a high-density, mixed-use project,
where all residential units not used as a "manager unit" will be below market rate ("BMR")
units, and ground floor retail (the "Grand Project"); and, Developer shall re -develop
the Linden Project Site into a high-density, residential use only project, with some
flexibility for live/work spaces, where all residential units not used as a "manager unit"
will be BMR units (the "Linden Project"). City and Developer acknowledge and agree
that the BMR units developed as part of the Projects will be subject to those restrictions
provided for in the respective AHAs. The Grand Project and the Linden Project are
collectively referred to herein as the "Project" or the "Projects".
4. Amendment to Section 3.6. Section 3.6 to the Development Agreement is revised to read
as follows, with additions in double underline and deletions in
3.6 Affordable Housing. Developer acknowledges that upon Developer's acquisition
of the Properties, the Properties will be subject to recorded covenants that will restrict
use of the Properties for a term of not less than fifty-five (55) years, commencing upon
the issuance of a final certificate of occupancy for the Project, as further set forth in the
Linden Affordable Housing Agreement ('Linden MIX') and the Grand Affordable
Housing Agreement ("Grand AHA"), each substantially in the forms attached hereto as
Exhibits C and D (the "AHAs"), each of which shall be recorded in the Official
Records on the date that Developer acquires the Project Site. The AHAs shall provide
that ost les@ an tweo_,, one hundred percent (9 �iffl%) of the residential units in the
Project not used as a "manger unit" shall be rented at an affordable cost (as
defined in the respective AHA).
5. Further Amendment to Exhibit E. Exhibit E to the Development Agreement is revised
to read as follows, with additions in double underline and deletions in
Developer's Project Schedule of Performance
Milestone
Deadline
1
----------- . . . . ............. . . . .... . ....
50% Construction Drawings (CDs) and
......... . ......
May 15, 2018
Proforma
(Completed)
--"-Y----100'/.—
CDs -subn—iitted--for building —permits
—Jul' -y --l4-,-2018
and Updated Proforma
(Completed)
3
Construction Financing Securedand
November 30 2019
Construction Contract Executed
4
If building permit application and 100%
Aagm* 49, 294-8-
December 11 2019
CDs were completed in #2, building permit
ready for issuance
Deeeff tb
Sep
5
Close of Escrow and Property Conveyance
DX=December ZL2Q1-9
Within Ten (10) Days from Satisfaction
of All Contingencies
6
Grand Avenue Demolition Start
of Allrces
9@Ptembev 4 01
. . . . . . . ..........
... . .. - --------
7 Construction Start
A
April 5, 2049
Pe@eMl- -- - -, --I-
Within One Hundred and Five (105) days
after Close of Escrow
8 Construction Completion Au"st 31, 2021
Aupst 13, 20-20
Mftr 3 828
6, Pre-ClosinLy Activities. Pursuant to that certain . Pre--Con.struction ActiiTity Access
Agreenient. dated ,ched. hereto and incorporated herein as Ex:hil)it.A,
g and atto
Developer or Developer's affiliated general. contractor will de t.n.olish the structures
located on. the Property prior to the anticipated. Closingr. As such., upon the ("losingy, the
Property will be delivered in a ""bare -land."" condition, as set f0r.thin the: 'Pre --
Cons truction Activity.Access Agreement.
Effcct of ThirdAmendment. Flxcept as exI)ressly modified by this Tgird .A.mendment,
the leaevelopment Agreement shall continue in ffill fx)rce and effect according 'o � '
its terms,
and Deveb,�)per arid. Cait-y hereby ratifyand affirin alltheir respective rights and obh�p, tions
under fli.e I.Development -Agreement, including but not limited to Developer's
indeinnification. obligations as set. R)rth in Section 13 of the Developtnent -Agreetnent, In
the event of any conflict between the 'MirdArnendr.nent or the
the provisions of this Third.Ar nen(finent shall g(wern.
8,Bin n Arreement, This Third Arnendmerit s1lia.111 be binding(' n
up )n a d inure to the
benefit of the heirs, adininistrators, execuitors, sticcessors in interest, and assigns of each of
the pardes hereto. -Any reference in to specifically narned party,
shall E.)e deerned to al:)ply to any suxcessor, administrator, executor, or assign of such party
who has acquired an interest in. compliance with the terins of this'lli.ird Amendment (.,),r
law.
Recordation. Tlae City stiall record a copy of together with
recordation of the Developinent.Agrccnieni,,
10. Counterparts. ThisT, hird Aniendr.ricrit may be executed in rnultit,�)Ie counterparts, each of
which shall be deeined an original, bait all. of Which, when talken together, shall constioate
the sanac, document.
11. California Law. This Third Amendment shall be governed by and interpreted in
accordance with the laws of the State of California. Any action to enforce or interpret this
Agreement shall be filed and heard in the Superior Court of San Mateo County,
California.
12. Invalidity. Any provision of this Third Amendment that is determined by a court of
competent jurisdiction to be invalid or unenforceable shall be deemed severed from this
Third Amendment, and the remaining provisions shall remain in full force and effect as if
the invalid or unenforceable provision had not been a part hereof
13. Headings. The headings used in this Third Amendment are for convenience only and
shall be disregarded in interpreting the substantive provisions of this Third Amendment.
IN WITNESS WHEREOF, this Third Amendment has been entered into by and between
Developer and City as of the date and year first above written.
[SIGNATURES ON THE FOLLOWING PAGE]
ROEM Development Corporation,
a California Corporation
By: ROEM Development Corporation,
a California Corporation, President
By: —
Name:
Tide:
Date:
CTIY OFSOUTHSAN FRANCISCO
In
Name: Charles Michael Futrell
Tide: City Manager
Date:
APPROVED AS TO FORM:
By:
Jason Rosenberg,
City Attorney
ATTEST:
By:
Rosa Govea Acosta
City Clerk
Exhibit A
PRE -CONSTRUCTION ACTIVITY RIGHT OF ACCESS AGREEMENT
201-219 Grand Avenue, South San Francisco
This PRE -CONSTRUCTION ACTIVITY RIGHTOF ACCESS AGREEMENT
("Agreement") is made as of - -------- 2019 ("Effective :hate"), by and
between ROEM Development Corporation, a California Corporation ("Developer") and
CITY OF SOUTI-I SAN FRANCISCO, a California municipal corporation ("City").
A. The City and Developer entered into that certain Purchase and Sale Agreement dated
November 14, 2017 (the "Purchase Agreement") with respect to that certain real
property located at 201-219 Grand Avenue, South San Francisco (the "Grand
Property") and that certain Development Agreement dated 2017 for the
development of a mixed-use project thereon (the "Development Agreement").
& The Purchase Agreement was amended by that certain First Amendment to Purchase
Agreement dated March 28, 2018, that certain Second Amendment to Purchase
Agreement dated August 22, 2018, and that certain Third Amendment to Purchase
Agreement dated _, 2019 (together, as amended, the "Purchase Agreement").
Ca The Development Agreement was amended by that certain First Administrative
Amendrnent to Development Agreement dated March 28, 2018, that certain Second
Amendment to Development Agreement dated August 23, 2018, and that certain 'Third
Amendment to Develop ment.Agreement dated _, 2019 (together, the "Development
Agreement").
D. Within the Third Amendment to Development Agreement, the parties agreed that
Developer would cause certain pre -construction activities on the Grand. Property to be
performed, specifically, the demolition of certain improvements and structures thereon,
prior to the close of escrow.
E. The parties now desire to enter into this Agreement to establish the terins and conditions
on which Developer may enter onto the Grand Property to perform those Pre -
Construction Activities, as the terns is defined below,
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises of the
parties herein contained, the City and Developer agree as follows:
Definitions. The following terms, as used herein, shall be defined as follows:
(a) "Access Area" shall mean the entirety of the Grand Property, as described
in the legal description attached hereto as Exhibit A.
(b) "Developer's Agents" shall mean Developer's employees, agents,
contractors, and authorized representatives, and Developer's Affiliated General Contractor.
(c) "Pre -Construction Activities" shall mean the demolition of existing
structures located in the Access Area/Grand Property and the rehabilitation of the surface parking
lot to a usable condition as further described in the Pre -Construction Activities Scope of Work
attached as Exhibit B (the "Scope of Work").
(d) "Developer's Affiliated General Contractor" shall mean ROEM Builders
Incorporated, a California corporation.
All other defined terms used in this Agreement shall be defined where first appearing in this
Agreement.
2. Developer's Obligation to perform Pre -Construction Activities. Developer shall
cause all Pre -Construction Activities listed in the Scope of Work to be performed in accordance
with the Schedule of Performance outlined in Exhibit C (the "Schedule"). All Pre -Construction
Activities must be completed in a good, safe, and professional manner in compliance with all
applicable laws, ordinances, and regulations, and in accordance with industry standards and best
practices. Developer shall be responsible, at its sole cost and expense, for causing the performance
of all tasks necessary to complete the Pre -Construction Activities, including, but not limited to,
demolition of existing structures, obtaining all permits required under applicable law, the proper
disposal of all hazardous and non -hazardous debris resulting from said demolition, and the
rehabilitation of the surface parking lot on the Grand Property as set forth in the Scope of Work.
3. Grant of Right of Access. City hereby grants to Developer and Developer's Agents
the right to access/enter onto the Grand Property to perform all Pre -Construction Activities
contemplated by this Agreement. The right of access granted hereunder shall be subject to the
terms and conditions set forth herein. Pursuant to the right of access granted hereunder, Developer
and Developer's Agents may enter onto the Grand Property with tools and equipment as may be
reasonably necessary to perform the Pre -Construction Activities. During the performance of the
Pre -Construction Activities, the City will endeavor to provide Developer with at least twenty-four
hours' notice to Developer, prior to accessing active construction areas of the Grand Property.
When accessing the Grand Property during the term of this Agreement, the City will endeavor to
follow all reasonable safety requirements, including accompanying a safety escort, and utilizing
all safety equipment and attire requested by Developer.
4. Hazardous Materials. Developer shall ensure that any hazardous materials that are
encountered, generated, or uncovered by Developer or Developer's Agents during the Pre -
Construction Activities are properly contained, handled, and disposed of in accordance with all
environmental laws, all laws governing the handling and disposal of hazardous materials, and any
regulations promulgated pursuant to such laws. In connection with the disposal of any hazardous
waste encountered or generated as part of the Pre -Construction Activities, City shall be listed as
the generator of any such hazardous waste on all transportation manifests and any other required
instruments. City shall execute all manifests for the transportation and disposal of any such
hazardous waste associated with the Pre -Construction Activities.
5. Ownershir)of Property/Lip n u its.. The Developer is required to completePre-
Construction Activities pursuant to its obligations under this Agreement and the Development
Agreement. If for any reason the parties fail to close Escrow pursuant to the Purchase and Sale
Agreement, Developer has no legal or equitable claim to ownership of the Grand. Property or the
improvements resulting from the Pre -Construction Activities. Further, in the event of such failure
to close, the Developer and Developer's Agents waive, fore o, and disclaim any claim to
reimbursement for any and all costs associated with such Pre -Construction Activities.
6. Pre -Construction Activities Secuurityw Remedies.
(a) Prior to the commencement of the Pre -Construction Activities, Developer
shall fUrnish: (1) a surety bond in an amount equal to at least one hundred percent (100%) of the
estimated cost of the construction and completion of the works and improvements of the Pre -
Construction Activities as security for the faithful perfimnance of this Agreement; and (2) a
separate surety bond in an amount equal to at least one hundred percent (100%) of the estimated
cost of the construction and completion of the work and improvements of the Pre -Construction
Activities as security for the payment of all persons performing labor and providing materials in
connection with this Agreement. Developer shall require all subcontractors to file a labor and
materials corporate surety bond as security for payment of all persons furnishing labor and
materials in connection with this Agreement. In lieu of a surety bond(s), Developer may fulfill the
requirements of subsection (a) of this section by providing a Standby Irrevocable Letter of Credit
in favor of the City, a cash deposit, or another pledge of security in a form approved by the City.
(b) If Developer fails to cause the Pre -Construction Activities to be completed
in accordance with the Schedule, City, in its sole discretion, may call upon the security provided
pursuant to subsection (a). Additionally, City may, but has no obligation to, assume control over
the activities in order to ensure completion and avoid any potential threats to health and safety. If
the City assumes such control over the Pre -Construction Activities, City may charge Developer
for any and all costs and expenses that the City incurs as a result of assuming control over the
completion of said Pre -Construction Activities. Nothing in this subsection shall be construed as
requiring the City to assume control and complete the Pre -Construction Activities if Developer
fails to cause the to be completed.
7. Llencim, and U�qpiosures* �Secu�ritPrecaufions, Prior to commencing the Pre -
j_
Construction Activities, Developer shall cause Developer's Agents to erect fencing and/or other
barriers sufficient to obscure the activities taking place on the Grand Property and to Prevent the
unauthorized entry of persons onto the site. If the City determines, in its sole discretion, that the
erected fencing and/or barriers are insufficient to obscure the site and/or prevent unauthorized
entry onto the site, the City may require Developer to implement additional safety and security
precautions in order to obscure the site and/or prevent such entry. If Developer fails to implement
additional such safety and security precautions after notice from the City, then the City may cause
such additional safety and security precautions to be implemented and charge the Developer for
the costs of such additional precautions.
8. Notice of Completion.; A .__L_ cc of the Work. Upon completion of the Pre -
Construction Activities, Developer shall send written notice to the City stating that all required
Pre -Construction Activities have been completed. Upon receipt of such notice, City will inspect
the site to confirm whether all required Pre -Construction Activities have been satisfactorily
completed in accordance with the Scope of Work. In the event that the City determines, in its sole
discretion, that there are outstanding Pre -Construction Activities, then City will advise Developer
in writing what items remain outstanding and Developer will promptly cause any outstanding tasks
to be completed.. If" the outstanding tasks are not complete within sixty (60) days of such written
notice, City, in its sole discretion, may complete the outstanding tasks in accordance with Section
6 above.
9. LIndemnity. Developer shall indemnify, defend, and hold harmless City from any
and all claims, demands, losses, costs, damages, suits, judicial or administrative proceedings,
liability, judgments, penalties, fines, deficiencies, orders, and/or expenses, including consultants
and. attorneys' fees ("Losses"). Stich indemnity obligations shall include, but not be limited to,
losses associated with:
(a) the improper release, handling or disposal of hazardous materials or any
resulting contamination associated with the performance of Pre -Construction Activities;
(b) bodily injury or property damage related to or arising from the Pre -
Construction Activities or Developer's and Developer's Agents' presence on the Grand Property,
including any such injuries or damage caused by Developers employees, agents, or contractors or
failure to properly obscure or secure the site.
Developer shall not seek reimbursement or payment ftorn the City for any of the
costs associated with the indemnity obligations herein and hereby waives any right it may
otherwise have under applicable law to statutory or equitable contribution from the City for such
costs. Notwithstanding anything to the contrary, Developer's indemnity under this Section 9 shall
survive in perpetuity.
10. Defense of Claim. City shall give prompt written notice to Developer of any claim
giving rise to the indemnity obligations of Developer hereunder. Developer shall defend the claim
with counsel reasonably acceptable to City. Subject to ethical rules of conflict of interest,
Developer shall at all times have the right to lead and conduct the defense of the claim. Developer
shall not settle a claim without the prior written approval of City, which shall not be unreasonably
withheld.
I I.. Attorn
.o�rne s'�Fees. If either party brings an action or proceeding against the other to
enforce or interpret any term or condition hereof, the party prevailing in such action or proceeding
shall be entitled to receive from the party not prevailing its reasonable attorneys' fees, costs and
expenses of suit as determined by the court.
11 Consent to Jurisdiction. City and Developer consent to the exercise of'jurisdiction
by the federal or state courts of California, and consent to venue in the United States District Court
for the Northern District of California and the Superior Court of the State of California for the
County of San Mateo.
13. Notices. All notices, demands, requests and other communications required
hereunder (i) shall be in writing, (ii) shall be deemed to be duly given if mailed by United States
registered or certified mail, with return receipt requested, postage prepaid, or by United States
Express Mail, or if sent by an overnight delivery service providing evidence of receipt or if
personally served, and the same is sent to a party at its address set forth below:
If to Developer:
ROEM Development
1650 Lafayette Street
Santa Clara, CA 95050
Attn: Alex Sanchez
With a copy to: Situs Law, PC
17485 Monterey Road, Suite 201
Morgan Hill, CA 95037
Attn: Summer Ludwick, Esq.
To City: City of South San Francisco
400 Grand Avenue
South San Francisco, CA 94080
With a Copy to: Meyers Nave
555 12th Street
Suite 1500
Oakland, CA 94607
Notices will be effectively served upon personal delivery, or if mailed or sent by overnight
delivery service, upon receipt or refusal to accept delivery. Any party may designate a change of
address by written notice to the others given at least ten (10) days before such change of address
is to become effective.
14. Insurance. Before beginning any work under this Agreement, Developer shall
ensure that Developer or any of Developer's Agents performing work under this Agreement shall
maintain the applicable types and amounts of insurance listed below against claims for injuries to
persons or damages to property that may arise from or in connection with the performance of the
Pre -Construction Activities by the Developer and Developer's Agents. Consistent with the
following provisions, Developer's Affiliated General Contractor shall provide Certificates of
Insurance indicating that Developer's Affiliated General Contractor has obtained or currently
maintains insurance that meets the requirements of this section and under forms of insurance
satisfactory, in all respects, to the City. Developer and Developer's Agents shall maintain the
insurance policies required by this section throughout the term of this Agreement. Developer
shall not allow any subcontractor to commence work on any subcontract until Developer has
obtained all insurance required herein for the subcontractor(s).
14.1 Workers' Compensation. Developer and Developer's Agents shall, at its sole cost
and expense, maintain Statutory Workers' Compensation Insurance and
Employer's Liability Insurance for any and all persons employed directly or
indirectly by Developer or Developer's Agents. The Statutory Workers'
Compensation Insurance and Employer's Liability Insurance shall be provided
with limits of not less than ONE MILLION DOLLARS ($1,000,000) per
accident. In the alternative, Developer's and Developer's Agents may rely on a
self-insurance program to meet those requirements, but only if the program of
self-insurance complies fully with the provisions of the California Labor Code.
Determination of whether a self-insurance program meets the standards of the
Labor Code shall be solely in the discretion of the City. The insurer, if insurance
is provided, or the Developer's Affiliated General Contractor, if a program of
self-insurance is provided, shall waive all rights of subrogation against the City
and its officers, officials, employees, and volunteers for loss arising from work
performed under this Agreement.
14.2 Commercial General and Automobile Liability Insurance.
14.2.1 General requirements. Developer and Developer's Agents, at its own cost
and expense, shall maintain commercial general and automobile liability
insurance for the term of this Agreement in an amount not less than ONE
MILLION DOLLARS ($1,000,000.00) per occurrence, combined single
limit coverage for risks associated with the work contemplated by this
Agreement. If a Commercial General Liability Insurance or an
Automobile Liability form or other form with a general aggregate limit is
used, either the general aggregate limit shall apply separately to the work
to be performed under this Agreement or the general aggregate limit shall
be at least twice the required occurrence limit. Such coverage shall
include but shall not be limited to, protection against claims arising from
bodily and personal injury, including death resulting there from, and
damage to property resulting from activities contemplated under this
Agreement, including the use of owned and non -owned automobiles.
14.2.2 Minimum scope of coverage. Commercial general coverage shall be at
least as broad as Insurance Services Office Commercial General Liability
occurrence form CG 0001 or GL 0002 (most recent editions) covering
comprehensive General Liability and Insurance Services Office form
number GL 0404 covering Broad Form Comprehensive General Liability.
Automobile coverage shall be at least as broad as Insurance Services
Office Automobile Liability form CA 0001 (ed. 12190) Code 8 and 9. No
endorsement shall be attached limiting the coverage.
14.2.3 Additional requirements. Each of the following shall be included in the
insurance coverage or added as a certified endorsement to the policy:
a. The insurance shall cover on an occurrence or an accident basis,
and not on a claims -made basis.
b. Any failure of Developer and Developer's Agents to comply with
reporting provisions of the policy shall not affect coverage
provided to City and its officers, employees, agents, and
volunteers.
14.3 Professional Liability Insurance.
14.3.1 General requirements. Developer and Developer's Agents, at its own cost
and expense, shall maintain for the period covered by this Agreement
professional liability insurance for licensed professionals performing work
pursuant to this Agreement in an amount not less than ONE MILLION
DOLLARS ($1,000,000) covering the licensed professionals' errors and
omissions. Any deductible or self-insured retention shall not exceed ONE
HUNDRED FIFTY THOUSAND DOLLARS $150,000 per claim.
14.3.2 Claims -made limitations. The following provisions shall apply if the
professional liability coverage is written on a claims -made form:
a. The retroactive date of the policy must be shown and must be
before the date of the Agreement.
b. Insurance must be maintained and evidence of insurance must be
provided for at least five (5) years after completion of the Pre -
Construction Activities, so long as commercially available at
reasonable rates.
C. If coverage is canceled or not renewed and it is not replaced with
another claims -made policy form with a retroactive date that
precedes the date of this Agreement, Developer must provide
extended reporting coverage for a minimum of five (5) years after
completion of the Agreement or the work. The City shall have the
right to exercise, at the Developer's sole cost and expense, any
extended reporting provisions of the policy, if the Developer
cancels or does not renew the coverage.
d. A copy of the claim reporting requirements must be submitted to
the City prior to the commencement of any work under this
Agreement.
14.4 All Policies Requirements.
14.4.1 Acceptability of insurers. All insurance required by this section is to be
placed with insurers with a Bests' rating of no less than A:VII.
14.4.2 Verification of coverage. Prior to beginning any work under this
Agreement, Developer shall furnish City with complete copies of all
policies delivered to Developer by the insurer, including complete copies
of all endorsements attached to those policies. All copies of policies and
certified endorsements shall show the signature of a person authorized by
that insurer to bind coverage on its behalf. If the City does not receive the
required insurance documents prior to the Developer's beginning work, it
shall not waive the Developer's obligation to provide them. The City
reserves the right to require complete copies of all required insurance
policies at any time.
14.4.3 Notice of Reduction in or Cancellation of Coverage. A certified
endorsement shall be attached to all insurance obtained pursuant to this
Agreement stating that coverage shall not be suspended, voided, canceled
by either party, or reduced in coverage or in limits, except after ten (10)
days' prior written notice by certified mail, return receipt requested, has
been given to the City. In the event that any coverage required by this
section is reduced, limited, cancelled, or materially affected in any other
manner, Developer shall provide written notice to City at Developer's
earliest possible opportunity and in no case later than ten (10) working
days after Developer is notified of the change in coverage.
14.4.4 Named insured; primary insurance. City and its officers, employees,
agents, and volunteers shall be covered as named insureds with respect to
each of the following: liability arising out of activities performed on
behalf of Developer; products and completed operations of Developer and
Developer's Agents, as applicable; premises owned, occupied, or used by
Developer and Developer's Agents; and automobiles owned, leased, or
used by the Developer and Developer's Agents in the course of providing
services pursuant to this Agreement. The coverage shall contain no
special limitations on the scope of protection afforded to City or its
officers, employees, agents, or volunteers.
A certified endorsement must be attached to all policies stating that
coverage is primary insurance with respect to the City and its officers,
officials, employees and volunteers, and that no insurance or self-
insurance maintained by the City shall be called upon to contribute to a
loss under the coverage.
14.4.5 Deductibles and Self -Insured Retentions. Developer and Developer's
Agents shall disclose to and obtain the approval of City for the self-
insured retentions and deductibles before beginning any of the services or
work called for by any term of this Agreement. Further, if the Developer
and Developer's Agents insurance policy includes a self-insured retention
that must be paid by a named insured as a precondition of the insurer's
liability, or which has the effect of providing that payments of the self-
insured retention by others, including additional insureds or insurers do
not serve to satisfy the self-insured. retention, such provisions must be
modified by special endorsement so as to not apply to the additional
insured coverage required by this agreement so as to not prevent any of
the parties to this agreement from satisfying or paying the self-insured
retention required to be paid as a precondition to the insurer's liability,
Additionally, the certificates of insurance must note whether the policy
does or does not include any self-insured retention and also must disclose
the deductible.
During the period covered by this Agreement, only upon the prior express
written authorization of City, Developer and Developer's Agents may
increase such deductibles or self-insured retentions with respect to City, its
officers, employees, agents, and volunteers. The City may condition
approval of an increase in deductible or self-insured retention levels with a
requirement that Developer and Developer's Agents procure a bond,
guaranteeing payment of losses and related investigations, claim
administration, and defense expenses that is satisfactory in all respects to
each of them.
14.4.6 Subcontractors. Developer and Developer's Agents shall include all
subcontractors as insureds under its policies or shall furnish separate
certificates and certified endorsements for each subcontractor. All
coverages for subcontractors shall be subject to all of the requirements
stated herein.
14.4.7 Wasting Policy. No insurance policy required by Section 4 shall include a
"wasting" policy limit.
14.4.8 Variation. The City may approve a variation in the foregoing insurance
requirements, upon a determination that the coverage, scope, limits, and
forms of such insurance are either not commercially available, or that the
City's interests are otherwise fully protected,
14.5 Remedies. In addition to any other remedies City may have if Developer and
Developer"s Agents fail to provide or maintain any insurance policies or policy
endorsements to the extent and within the time herein required, City may, at its
sole option exercise any of the following remedies, which are alternatives to other
remedies City may have and are not the exclusive remedy for Developer's breach:
a. Obtain such insurance and deduct and retain the amount of the premiums for
such insurance from any sums due under the Agreement; and/or
b. Order Developer to stop work under this Agreement.
15., Termination. This Agreement shall commence on the Effective Date and terminate
upon the completion of the Pre. -Construction Activities, Developer's acquisition of the Grand
Property, as evidenced by the recording of a grant deed, upon City's written notice of an uncured
default, or upon sixty (60) days following the City's written notification of termination to the
Developer without cause. If the City terminates this Agreement for cause prior to the completion
of the Pre -Construction Activities, the City may elect to complete any outstanding activities and
charge the Developer the cost of such completion in accordance with Section 6 above. However,
if the City terminates without cause and Developer is in compliance with all of its obligations
under this Agreement and the DA, the City may elect to complete any outstanding activities but
will not charge the Developer the cost of such completion.
16. Severabilitv. If any clause or provision herein contained operates or would
prospectively operate to invalidate this Agreement in whole or in part, then such clause or
provision shall be held for naught as though not contained herein, and the remainder of this
Agreement shall remain operative and in full force and effect.
17. Modification. This Agreement may not be modified, amended or otherwise
changed in any manner, except by a written amendment executed by both City and Developer, or
their respective successors in interest.
18. Controllin Laws. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California.
19. Effect on Third Parties. The rights, benefits and obligations conferred hereunder
are for the benefit of the parties hereto and not for the benefit of any third party.
20. Entire Acreement. This Agreement along with the Development Agreement and
Purchase and Sale Agreement constitutes the entire agreement of the parties with respect to the
specific subject matter hereof, and all prior negotiations, agreements and understandings between
Developer and City with respect to the specific subject matter hereof are merged into this
Agreement.
21. Counterparts. This Agreement may be executed in counterparts, all of which
together constitute one and the same agreement.
22. Assi „gement. This Agreement may not be assigned without the express written
consent of the non -assigning Party, which consent shall not be unreasonably withheld.
23. Further Assurances. City and Developer each agree to perform such other acts, and
to execute, acknowledge and deliver such other instruments, documents and other materials as the
other may reasonably request and as shall be necessary in order to effect the consummation of the
transactions contemplated hereby.
[The remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, Developer and City have executed this Agreement as of the
date first above written.
ROEM Corporation, a California corporation
By:.
Name:
Title:
"CITY"
CITY OF South San Francisco,
A California municipal corporation
By:
Name:
Its:
Pre -Construction
At the Grand Property site, after utilities are shut off and capped, Developer will femce off the
first row of parking against 217-219 Grand, allowing the remainder of the parking lot to be used
while the building is brought down if possible.
Developer will demolish the existing buildings on the Grand Property. Developer will obtain a
demolition permit from the City's Building Divisiorn and the demolition will be in conformance
with the City's approved plans and in accordance with the Schedule. All structures will be
demolished, to grade, and all debris will be off -hauled.
If building permits have not been issued upon completion of the demolition, Developer will
fence off the site at 217-219 and reopen the parking until the pen -nits are pulled. If reopened, the
parking lot may be in a rough -grade, graveled condition, and not a smooth surface paved and
striped condition, The condition of the party -wall between 217219 and 223-225 Grand is
unknown. Further testing will need to be done once 217-219 has been demolished. The
condition of that wall could impact the proposed schedule.
Schedule of Performance
City Council approval of agreement
Agreement executed and becomes effective
Site fenced and demolition begins:
Demolition complete:
Surface parking lot reopened:
90 days following City Council approval
(May 14, 2019)
4 months following commencement of
demolition
(September 11, 2019)
If building permits have not been issued,
Developer will reopen the parking lot
within 30 days of demolition completion