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HomeMy WebLinkAbout2017.12.04 Special meeting TranscriptDecember 4, 2017 South San Francisco City Council meeting Item 2 PUBLIC HEARING 2. Report regarding a Community Facilities District Public Hearing, Resolution of Formation of Community Facilities District and Resolution Calling Special Landowner Election for Community Facilities District. (Richard Lee, Director of Finance and Steve Mattas, Assistant City Attorney) 2a. Resolution No. 150-2017 of formation of Community Facilities District, City of South San Francisco Community Facilities District No. 2017-01 (Public Services and Facilities). 2b. Resolution No. 151-2017 calling special landowner election for Community Facilities District, City of South San Francisco Community Facilities District No. 2017-01 (Public Services and Facilities). PARTICIPANTS: COUNCIL Mayor Pradeep Gupta Vice Mayor Liza Normandy Councilmember Mark Addiego Councilmember Rich Garbarino Councilmember Karyl Matsumoto STAFF City Manager Mike Futrell Assistant City Attorney Steve Mattis City Clerk Krista Martinelli PUBLIC David Cincotta, Attorney representing Kashiwa Scott Ynis, Kashiwa’s Leasing Broker for Oyster Point Plaza Jill Vivanko, General Manager of Kashiwa’s property John Ullom GUPTA I would like to remind everybody that this is a continuation of the public hearings opened on November 20, 2017, and continued to this date and time. The City Council’s consideration of Community Facilities District No. 2017-01, public services and facilities. The hearings are to inquire into the formation of the district and levy of special taxes in the district for public services and facilities in the district. The City Council acknowledges that Kashiwa Fudisan America filed a protest with the City Clerk on Friday, November 17 and subsequent letter on November 27th. The hearing is now open. December 4, 2017 City Council Item 2 Page 2 of 16 And we’ll have first the presentation by staff about the district. After that we’ll receive comments and questions and any oral protests from any interested persons. When all comments have been received, the hearing will be closed. So please go ahead. MATTIS Thank you Mr. Mayor, members of the Council. I’m Steve Mattis, Assistant City Attorney, here to present the staff report to the Council this evening. The Council, as indicated by the Mayor, you previously held a public hearing. You took public testimony on this. Subsequent to that meeting, as the Council’s aware and as you’ve seen in your materials, representatives from Kashiwa Fudisan have submitted an additional letter into the record as well as the staff report that you have before you this evening includes a supplemental report from Seifel and Associates. And the Council has also been provided with a memo from Jones Hall, the special CFD counsel. Just for the record, I would note that I did just provide a copy of the that memo to counsel for Kashiwa, given that the Council has waived the privilege on that and allowed us to release that. With that, I’ll commence the presentation. As the Council will recall, the issue before you this evening is the formation of a Mello Roos community facilities district. A Mello Roos district authorizes the City to levy annual special taxes on properties within a CFD boundary based on a two-thirds property owner vote. The Council on October 11th, approved the resolution of intention to establish the process. The items before you this evening are a resolution of formation and a resolution calling an election if you chose to proceed in that manner. The purpose of a CFD is to impose a special tax on the lands. And those special tax proceeds are used to finance public services and public infrastructure. As the Council is aware, Oyster Point Development, the developer of the property that is also included within the CFD boundaries and the successor agency are present, committed to providing $70 million worth of public improvements within the CFD boundary areas and on the OPD property. The public improvements and services that would be authorized under this CFD include the maintenance of the new public infrastructure. As the Council’s aware, there’s going to be new parklands, new parkways, improvements to the Bay Trail, streets, storm drains and open space improvements. And it also allows for additional services for police services. The authorized facilities that are included in the CFD include the replacement and the renovation of the fuel dock and the fueling system. As the Council will recall, there is an existing fueling system out at Oyster Point Marina. It is antiquated and needs to be updated. And this CFD would provide funds for that. The projected public service cost are the O and M side, the operation and maintenance side costs. And those are roughly, including soft costs, approximately $1.2 million per year. And those are all services that are not presently provided by the City in that area. And that is accounted for two issues. The first one is that a number of the improvements that would December 4, 2017 City Council Item 2 Page 3 of 16 be constructed with the $70 million of improvements are improvements that don’t actually exist out there right now or that are going to be enhanced. Presently the City spends a modest amount of money at the Oyster Point Marina for the improvements and, of this amount, close to $1,180,000 would reflect actual new expenses for additional services funded by the City. The public services in the CFD include, as I said, about $998,000. That’s the hard cost side of it for the maintenance of the new public infrastructure, the parks, parkways, streets, etcetera. And this slide also shows the current services out there. And really the two that are most relevant are the occasional park maintenance and the pump station maintenance because those are the types of costs that would be included in the CFD. The amount that we show you for methane monitoring is what the City is paying out there every year right now for the methane monitoring over the former landfill. But the methane monitoring costs are not actually part of the CFD. But we’re just giving you a scope so you understand the scope of the type of expenses that are out there. The proposed cost of the CFD is 39 cents a square foot. That would be 32 cents a square foot levied in perpetuity for the services, the operation and maintenance if you will. And then seven cents per square foot of the floor area, capped at a total collection amount of $2,750,000. And with a sunset on the tax of approximately June 30, 2031. This slide is intended to show the Council the properties that area affected and those that have consented to the CFD previously. So, you’ll see in the kind of the lighter green shading those are the Oyster Point Development properties. The blue are the City properties at which you’ll have leased facilities in the future. And the red properties are the Kashiwa Fudisan properties. Both the City and OPD have consented to the formation of the CFD. And as the Council’s aware, through their letters, Kashiwa has not consented. This slide is intended to show the Council the parcels and the intended uses that will exist on those properties that we just showed you that were shaded in. So, you can see on the City properties you’d have open space, recreation, commercial, retail, a hotel, that could go onto those properties, all of which would be, all of the lease hold interests of that, would be subject to the CFD as well too. Oyster Point Development is a proposed office R and D project. And as the Council’s aware, and you have on your agenda later this evening, there’s also the potential of a residential, although that’s not approved yet. The approved development at Oyster Point is 2.25 million square feet of office R and D already. ADDIEGO Mr. Mattas, you’ve got assessor parcel numbers that repeat for Kashiwa Fudisan. So, I think we’ve got a typo. MATTAS That would be a typo. They actually have two separate APNS. Thank you. December 4, 2017 City Council Item 2 Page 4 of 16 ADDIEGO Thank you. MATTAS You look at a slide many times and you don’t catch that. So, I apologize. They do have two separate parcels out there. The recommended actions from the Council this evening are that you conduct a public hearing, that you adopt the resolution of formation of the CFD and that you adopt the resolution calling the special landowner election for the CFD. I guess finally what I would recommend to the Council is that, in the letters from Kashiwa they have raised a number of issues regarding the applicability of the CFD to their property, regarding the analysis that was conducted in the Seifel Report. The Seifel Report is responsive to that. The memo that the Council’s received previously and that was distributed publically tonight responds to the legal issues that are associated with that. It is staff’s position and your special counsel’s position that the Council can proceed with the formation of the CFD tonight and that the proper procedures have been followed to do that. We would recommend that the Council take any additional public testimony this evening and then following that take the actions that are shown on the screen if that’s your desire. Staff is prepared to answer questions and Ms. Seifel who is here as well as Mr. Ferguson, the special counsel for CFDs, is also here and we’re happy to answer any questions that the Council may have. GUPTA Thank you very much. Now I’m going to be going into the public comment part of this public hearing. And I’ll be asking for comments, questions, or comments from the audience. And I have gotten four written requests for making comments. But in addition to these four that I have on this item, if there is anyone else who would like to also have their comments made, I’d appreciate if you fill one of those blue cards and give it to our City Clerk so that we can take you but even if you don’t fill the card I’ll still call upon for you to make your oral argument at the end of these four requests that I have. And I’m going to take them just randomly but if you have a group who wants to make comments one after the other and you want to rearrange the order, please let me know. First one is Jill Vivanko. ADDIEGO I think they’re going to rearrange. CINCOTTA Hello, I’m not Jill Vivanko. My name is David Cincotta and I’m here on behalf of Kashiwa. GUPTA David? CINCOTTA Cincotta. December 4, 2017 City Council Item 2 Page 5 of 16 GUPTA Okay. CINCOTTA I’m here on behalf of Kashiwa Fudisan America. And I want to thank you for taking the extra time and extending this time to have the additional hearing and to review additional materials. I also want to start, before I begin, I want to say that I have the highest regard for Ms. Seifel and Seifel and Associates. I’ve worked with them in other jurisdictions. And so, my criticism of her work is more along the lines that I think that further analysis is necessary to make the conclusions that you’d like to make. Because we’ve reviewed her materials and there’s no new material in what she submitted to us. And the report does reference ___ and studies that in the abstract that say when you make these kinds of improvements, rents can go up. But we have on our side our experts to say further analysis is necessary to be able to determine that. You haven’t been able to make definitive statements as to how that can happen. And we also have 23 years of experience of owning this building in these circumstances. So, we know what we think we can do with this building. We would like it to be true that the rent could increase. But that’s not really where we are. So, if it was true was would be very happy. But the facts that we do know are that the additional cost of 39 cents a square foot will cost us another $180,000 a year. That’s a fact. We also know that that impacts and the Seifel Report agrees that the way we determine the cap that that was correct. That would be a loss of $3 million. One of the things that was not asked to be studied was the, what the impacts are on other properties. In the Seifel report there are listed three things that will be to the benefit of Kashiwa. It will create a new gateway entrance. It will create, reconfigure and improve existing roads. It will improve open space and rail systems. New recreational facilities. All of that is supposed to be able to increase our rents. But if those issues are true, everybody on Oyster Point Boulevard would be able to enjoy that as well. Why weren’t they included in the district? If we’re all going to enjoy the benefits that are being identified, we should be treated the same. I urge you to not include Kashiwa and if you were to include Kashiwa that you add other neighbors in this district. Thank you. GUPTA Thank you very much. Among the other three comments that I have, is there a sequence? Please come forward. YNIS Thank you Honorable Mayor and Honorable Councilmembers for another opportunity to speak to you tonight. I’ll reiterate some of David’s points that I put in my letter. My name is Scott Ynis. I’m with Christian Wakefield. I’m the leasing broker for Oyster Point Marina Plaza. The number that we came up that would be an impairment to value for this $182,000 of district special assessment would be about $3 million to $3.3 million of December 4, 2017 City Council Item 2 Page 6 of 16 impairment to value. Whether you sell it today or whether you sell it 20 years it’s going to be an impairment to our value. Which is a lot. It’s 3% of what the property’s worth today. The second point is, the enhancement, let’s see what did I say here, there was nothing in the Seifel Report which was well written and lengthy and interesting. There was nothing that quantified how these improvements would enhance our value. Or they were general statements quoting the various organizations that open space and parks were good and that, you know, generally it probably raise rents but we already have lots of open space at Oyster Point and greenery and places for our tenants to walk so to have it place next door is not, in my opinion, is not an enhancement to value that will increase rents. Or value. It also doesn’t compress CAP rates which is a concept that’s only really kind of a finance concept. I don’t see it as creating open space and parks, just compressing CAP rates. The other thing is that the Seifel report also talked about our values being somewhere around $4-500 a square foot which is a mischaracterization of the value. I put comps in my letter that showed that Class B office buildings sell for $220 to $240 a square foot in the north peninsula. So maybe half the value that they put in their proforma and now you’ve lumped a Class B office building in with a new biotech buildings that can sell for $800-1000. And we’re paying the same square footage rent or assessment that they do. So, the impairment to value to us is three to six times more than the impairment to the biotech buildings. Anyway, thank you for your time. GUPTA Thank you very much. I’ve got two more. Jill Vivanko? VIVANKO Yes. Good evening Mayor Gupta and City Councilmembers. My name is Jill Vivanko. I’m the general manager of the Oyster Point Marina Plaza at 395 and 400 Oyster Point Boulevard, better known as the Kashiwa Property. I’m here just to reiterate what I had outlined in my protest letter with my concerns and questions. I have managed the property for about a year and half. I have staff on property who have been there for over 13 years. We maintain our property well, including public sidewalks, the public Bay Trail, as well as landscaping associated with that. These additional services that are being recommended by the CFD will have absolutely no direct benefit to us since we already are doing those services. In addition, with police and fire service, I can tell you, count on one hand the times that police and/or fire have every even been dispatched to our property. We are very low key, very low service oriented and being that I am the boots to the ground, hand on person there, I know first-hand, you know, what our property needs and what it takes. My final comment and question and to reiterate what Mr. Cincotta and Mr. Ynis have already mentioned is I, my question is, is why has our property been targeted for the CFD alone. There’s many properties that boarder Oyster December 4, 2017 City Council Item 2 Page 7 of 16 Point Boulevard, in close proximity and again I’m just questioning as to why only the Oyster Point Marina Plaza has been identified to participate in the CFD. Thank you very much. GUPTA Thank you. Thank you very much. Next I have John Ullom. John. ULLOM Thanks for having me up here. So, can I remind you of something? Benajim Franklin has a great quote about democracy. It’s basically democracy is two wolves and a lamb voting for what to have for lunch. You’re the lamb and they want part of your lunch. And the other part of that is though is that liberty is a well-armed lamb contesting the vote and in this case, information is probably what you guys are going to need to contest this vote because they are going to ram it through. Here’s what I know about OPD and what’s going on out at Oyster Point and the fuel dock and the facilities district. Back in the winter of 2016, it was determined that the fuel docks hadn’t been maintained, were dangerous. Weren’t being operated correctly. Indeed you, the City hired a company called Anchor Associates. They did a consultant report of all the conditions out there. You’ll want to get that. They determined that it needed a lot of work. That everything was worn out and that there were immediate hazards that needed to be dealt with involving the risk of electrocution. It took them six months to fix that. You might want to know if you’re going to be responsible for anything that goes wrong out at the fuel dock when this is done. And if you read this Item 2A you’ll see that the fuel dock is the main reason what this whole thing is about is the fuel dock. And so, they knew they had a problem in May of 2016. The Harbor District which nominally runs things out there sent two very strident letters to OPD saying you’ve got to do something about your fuel docks. They’re not being maintained properly. They’re not keeping proper records. There’s safety issues out there. You’ve got to do something about it. And if you read the second letter you’ve see it’s a pretty strident letter. Mr. McGrath meant what he was saying. They were going to take actions against him. By July 31st, it all switched. They decided the Harbor District was going to operate the fuel dock and they were, this was in an email that I found in a PRA request between SKS and Greenland Property Management. So, by July 31st, less than eight weeks after being told they had to fix the fuel dock because it was in their lease, it was their job, SKS and Greenland had been told that the Harbor District was going to take it over. And then, what’s really strange about that is there is absolutely no record, no agenda item, no conversations, no discussion ever about the Harbor District taking on the fuel docks until August 16, 2017. So I’m wondering how it is that SKS and Greenland are under the impression that something has happened that has never been discussed publically and hasn’t been voted on yet. You’ll December 4, 2017 City Council Item 2 Page 8 of 16 want to look at the liaison committee meeting that they had where they decided the Harbor District and the City were going to form the community facilities district. Ms. Corally was a bit concerned because she understood your point of view and she understood that this thing could get messed up if people voted against it. GUPTA Mr. Ullom, the time is running out. Could you quickly summarize? ULLOM Sure. I’ll be glad to talk to you about it but see you won’t hear about this if you look in the reports of the Harbor District. If you look in your staff report. They’ll never really tell you what was going on out there. They’ll never point out that there was major $2.5 million in electric, repairs that need to be done. They’ll never tell you there were any electrical hazards or any hazards whatsoever that you would probably be taking some liability for under this district. You’ll want to be sure that you’re not. Last thing, if you’ll look at the reports, they do suggest that they’re going to maybe replace the fuel system, all the fuel system will be gone by 2025. They have to pull fuel tanks out. They know this. It might be sooner than that. But everything is gone, not just the docks. Thank you. GUPTA Thank you very much. Alright, that finishes my list of comment card requests. Are there any other comments, besides those, the ones we have gone through? If not, I’m going to close the public hearing part and I’d like to have, we may now consider and adopt the resolutions of formation of community facilities district which will establish the district and the resolution calling for special land owner election for community facilities district which will call for the property owner to vote to approve a special tax and the appropriation limits to the district. So, I’ll invite the Councilmembers to discuss those potential actions that we can take and I’d like to ask the Assistant City Attorney and City Manager to help us out through that discussion. Thank you very much. So, who would like to open the discussion from the dais? ADDIEGO Mr. Mayor I’ll gladly begin. I’ve been careful in my review of the information that’s been sent to us by staff and by those protesting and I’m most certain that when it comes to the 32 cent component, what the CFD can bring to that portion of Oyster Point, the point itself, will be, although the benefits may be indirect to the assessor parcel numbers for the Kashiwa buildings, I think that there are substantial benefits as you move out to that property. In other words, it truly is, I think creating a new gateway entrance to Oyster Point is how the staff characterizes it, and very definitely some of the decisions that are being made are going to open up the entire Oyster Point and the Bay as you approach. And that’s going to be a quite spectacular change for the properties that are at the point including the Kashiwa property. I think there was a question by Ms. Vivanko about why December 4, 2017 City Council Item 2 Page 9 of 16 our property is targeted. Really the Kashiwa property is surrounded by the improvements that others are making. And this is merely the help to keep those maintained to the fullest. I think Mr. Cincotta or maybe Mr. Ynis mentioned that there’s lots of open space there. You have enough open space. More might not raise your rents but the level of maintenance, when you look at the parkland, the actual parkland, the beach area, it’s not of a standard of maintenance that invites people to partake in it. And I think that, I think while it’s indirect, there’s going to be some great advantages to having the CFD in place and participate in it. Now, at the same time, I’ve thought about this carefully and I’m going to read the statement from JMDM of November the 17th on page 3 when we talk about the fuel systems. As to the proposed fuel system facilities there is absolutely no nexus or rational relationship between those facilities and the Kashiwa property. And so, I’ve gone through everything more than once. And I have to agree that I don’t see the relationship between the improvements at the fuel dock and the fuel system. And so, I’m wondering if there’s a way to address that as we set up the CFD. MATTAS So, the Council could, if you chose to, exclude the applicability of the CFD fuel facility to the Kashiwa properties, if that was the Council’s choice. You could, in the documents that you would consider tonight and potentially take action on, you could adopt a set of documents that would separate the fuel facilities from the charges imposed by Kashiwa which would then move their per square foot from 39 down to 32 cents. ADDDIEGO How does that impact the other members of the CFD? MATTAS The other members of the CFD which would include the hotel and the OPD properties and any commercial that’s on parcel 5, would continue to pay that. ADDIEGO I wanted to challenge some statements that were made at the previous meeting that we had. Someone, I think it was, it is Kidder, Mathews was represented at that last meeting? MATTAS Kushman and Wakefield? ADDIEGO Well, someone made a statement that there was no benefit for those buildings with the biotech industry. And think what they meant was they can’t convert to lab space. But in fact there is a benefit to having this vibrant industry directly adjacent to those 200 plus companies that require a lot of services beyond, you know, what they do in house but in fact, when I looked at Mr. Ynis’ resume, he indicated that he had participated in a major lease transaction with Oncology Therapeutics which is now owned by McKessin for 75,000 square feet. Is that at the Kashiwa Fudisan properties? So it sounds like you do December 4, 2017 City Council Item 2 Page 10 of 16 benefit from the biotech industries. That’s good. Everyone should. This our first time dealing with a community facilities district. Mello Roos is an outgrowth of Prop 13 and the inability, you know, in the 70s and further back, City Councils would meet once a year and they would set the tax rate. We can’t do that anymore. But this is a mechanism to be certain that some of these improvements that good money is going to be put in both City and other developers, is going to be maintained in perpetuity. And that’s important because it doesn’t become a drain on the general fund, the fund that we have left to pay for everything else. So, it’s a new day. CFD is something new. And I’m going to embrace it and I’m just asking my colleagues if there’s any support to maybe cull out the fuel dock and that system from Kashiwa’s involvement. GUPTA Thank you, Councilmember Addiego. GARBARINO Thank you Mr. Mayor. Just a comment that I heard earlier, the statement was that there are existing amenities out there that enhance the property already and that’s what I think one of you two said. So, if there were further improvements or amenities, wouldn’t that further enhance your property? Not necessarily raise the value, but wouldn’t that enhance your property? I don’t see why that wouldn’t be a benefit to you, the property owners out there. MATTAS Councilmember if I may on that issue. If Council would like to hear directly from Ms. Seifel on any of these issues, she’s here and there were some specific issues raised with regards to her report. So if the council would like to hear from Ms. Seifel, she is available. GARBARINO Okay, well, I perhaps Ms. Seifel can comment on my comment. SEIFEL Thank you very much. And I appreciate having the opportunity to be able to say something about this and I also appreciate the comments of the existing property owner’s team as well. I think the point is raised in the report that we produces which is that there is $70 million worth of proposed public improvements, which is what I think both of you are alluding to that are going to come in that will improve the gateway entrance. They will reconfigure the roads. Very importantly, they will make Oyster Point much more multi-modal. So there will be better pedestrian access, better bike access, better transit access, which is all something that is very important to attracting tenants. Transit was something that was definitely spoken about by Mr. Ynis as being very important. In addition to that, the improvements to the Crescent Park and the Shorline. The idea is to really activate that park and recreation area in a way that has not been activated before. December 4, 2017 City Council Item 2 Page 11 of 16 And then last but certainly not least is the idea of building a new mixed use community out there which will have complimentary uses and as you indicated, you both really have indicated, having more development and more synergies out there can benefit the existing buildings as well. So, specifically, I think that all of these benefits given that the existing property owner’s not being asked to contribute anything towards the capital improvements, about $70 million, if you divide that just on a per square foot basis, you get about $8 million worth of benefit that these improvements of $70 million could potentially provide. Now even if you divide that or make that a smaller number, there’s still the potential to more than offset a $3 million hit on their values. And furthermore, if you were to reduce from 39 cents to 32 cents, you know, that’s going to reduce, you know, about a quarter of the impact on them. So, it’s going to significantly reduce it. So, I really do stand by the opinion that it is, and I want to emphasize something else that you both eluded to which is the economic competitiveness of office and R and D space right now is, it’s paramount. Having a kind of campus, great feel, a place that people really like to be, where they really enjoy the outdoors, where they can access the trails, where they can access transit, they can do all those things is really important to being economically competitive. From the challenges that I’ve heard from Mr. Ynis’s statements and the property manager’s is, it has been challenging for them in recent years. They’ve had better success maybe in the past than they’ve had recently and I really do sincerely believe that this will have a positive impact for them. I do understand that nobody knows precisely how much of an impact that’s going to be. We could argue for a long time about how much that impact is. But I honestly do believe that there will be a positive impact from that much cement that’s going to go on and I do agree very much that you need to maintain it. And you need to maintain it at a higher standard in order to have, to realize those benefits for everyone out there. And I do think adjacency makes a difference. So them being adjacent to the major improvements that area the gateway improvements, the Crescent Park improvements, the Bay Trail improvements, they’re immediately adjacent to their property. That is not the case of the other properties in that area, other than OPDs. GARBARINO Thank you for that. I appreciate that very much. And again I have to say, I don’t see how any of these improvements wouldn’t serve, enhance their property, particularly the roads. So, thank you for that. I also want to thank my colleague, I think you’ve made a reasonable suggestion with the reducing their from 39 to 32 cents. That’s a seven cent reduction. That seems reasonable to me. So, I would, I think I would support that. ADDIEGO Thank you. December 4, 2017 City Council Item 2 Page 12 of 16 GUPTA Thank you Councilmember Garbarino. GARBARINO You’re welcome. NORMANDY Just to piggy back on Councilmember Garbarino and Addiego, I too agree to the removal of the field dock as mentioned, I don’t believe that is a direct benefit but everything else is. I’m in agreeance with that. I support it. And I think you already made plenty of comments and viewpoints that I don’t have to further go on. Thank you very much. GUPTA Thank you. Councilmember Matsumoto? MATSUMOTO I think that’s a good idea. GUPTA I just would like to make my brief statement without repeating the comments that were made earlier by other councilmembers here on the dais. I have noted the points which have been raised by Kashiwa in their oral arguments as well as two protest letters of November 17 and November 27. I’ve also read the responses to those points provided to me by our city attorney and the staff and the reports of the consultants. And I can just say that I am convinced in my own mind that the proposed CFD is procedurally and legally valid. And I’m not persuaded to the extent by Kashiwa’s argument that it is not. I’m also convinced that the services to be maintained by CFD are increased services for the new improvements. And are not related to the City’s general service obligations which may have been kind of confusing. But it is not. They’re only for maintaining those which have been made earlier or will be made by other participates. I’m also convinced that Kashiwa because of their immediate proximity to the improvements on the beach and the Crescent Park will benefit from those improvements as opposed to other potential buildings or the owners on Oyster Point Boulevard. I also believe that I tend to support Councilmember Addiego’s suggestion because I also was finding it little difficult to make the connection between Kashiwa and their properties and the general improvement of the area with the specific fuel line improvement that’s a project that needs to be done. Needs to be done with or without the CFD. So, I will support taking out that component of the CFD from Kashiwa and reducing the burden on Kashiwa of CFD from 39 cents per square foot to 32 cents per square foot. But in that context I’d like to ask the City Attorney how would we make that change before we go further. MATTAS So if the Council were desiring to proceed and to remove the seven cents applicability to the Kashiwa properties, you could do that by, we have replacement Exhibits B and C to your resolution of formation that we could enter into the record and that would have the December 4, 2017 City Council Item 2 Page 13 of 16 CFD as it applies to Kashiwa only apply to the services side which the 32 cents per square foot. So, if the Council would like to proceed that way we do have documents that would allow you to do that this evening. So, you would replace the current Exhibits B and C with the new ones that we have here which does remove the Kashiwa applicability for the fuel line. GUPTA Thank you very much for your guidance. Any other discussions from the dais? GARBARINO No. ADDIEGO Well, actually I would like to appeal. It’s unfortunate the no one from Kashiwa Fudisan is here this evening but they have plenty of well-paid representatives. The unfortunate thing, when you’re not talking directly to those that own property is, you know there’s a fairness that’s being exhibited here that I’m not sure is going to be translated in its full and proper way to our friends in Japan. You know, 23 years of ownership I think Mr. Cincotta mentioned, we years of ownership, so I hope they’re pleased with where they decided to invest their money because they do have an aging building. And in other venues I don’t think it would be doing as well. If you rolled the clock back some 20 or 25 years, it was a very different world out there and you might be mostly empty today if it wasn’t for the 215 biotech companies that have joined South San Francisco. So, you’re in a spectacular position and I know that there has been some hint that we might end up in court but I really hope that they might look at that a little bit differently. It’s just a little bit of movement, that seven cents but it does show the government here in California is exhibiting some understanding and fairness. And we really want Kashiwa to be a full partner with South San Francisco’s success. So, if someone could communicate that to your bosses, I would be appreciative. GUPTA Thank you very much for your comment. Do I hear any action to be taken? MATTAS Mr. Mayor just for the Council’s benefit I’ll pass out the revised exhibits. They are essentially the same as what you have in your packet except they do remove the applicability of the seven cents to the Kashiwa properties. (inaudible) And we have a copy for Mr. Cincotta as well too. So, with that, the staff’s recommendations are to adopt the resolution of the formation of the CFD, File No. 171124 with the revised exhibits which would remove the seven cent applicability to the Kashiwa properties and then to adopt the resolution calling the special election. That’s as it’s presented in your packet this evening. There are no changes to that. December 4, 2017 City Council Item 2 Page 14 of 16 ADDIEGO Well, I’ll go ahead and make the first motion that we adopt the resolution regarding formation of the CFD. GARBARINO I’ll second. GUPTA The motion has been made by Councilmember Mark Addiego, seconded by Councilmember Rich Garbarino. Can we have the roll call vote please? MARTINELLI Yes, Councilwoman Matsumoto? MATSUMOTO I wont be supporting this and I’d like it for the record. I believe in CFDs. Don’t get me wrong. I believe and I’ve always been a strong proponent of infrastructure but I am not comfortable. I cannot, I am not comfortable with the way this is structured. I’ve said it before. It has to, for me, equity, I would prefer a bigger sphere because just the way it’s set up, so for that reason I want the record to know why I will not be supporting it. But I do support CFDs. MARTINELLI Mayor Gupta? GUPTA Yes. MARTINELLI Councilman Addiego? ADDIEGO Yes. MARTINELLI Councilman Garbarino? GARBARINO Yes. MARTINELLI Councilwoman Normandy? NORMANDY Aye. GUPTA So we have the votes on the first resolution. MATTAS Now we would recommend that you, given that there’s a majority in support of it that we would recommend that you adopt the resolution calling the special landowner election for the CFD. That’s File No. 171125 as presented in your packet. GARBARINO I would so move. December 4, 2017 City Council Item 2 Page 15 of 16 ADDIEGO I’ll second that. GUPTA A motion has been made and seconded. Can we have the roll call vote please? MARTINELLI Mayor Gupta? GUPTA Yes. MARTINELLI Councilwoman Normandy? NORMANDY Aye. MARTINELLI Councilwoman Matsumoto? MATSUMOTO No. MARTINELLI Councilman Addiego? ADDIEGO Yes. MARTINELLI Councilman Garbarino? GARBARINO Yes. GUPTA Thank you. MATTAS That concludes this item Mr. Mayor. GUPTA Thank you very much for participating and providing your inputs into the Council discussion. December 4, 2017 City Council Item 2 Page 16 of 16 CERTIFICATION I, LISA POPE, Master Municipal Clerk/Transcriptionist, do hereby certify that the foregoing Pages 1 through 15 are a full, true and correct transcript of the proceedings of the South San Francisco City Council consideration of Item 2 at its meeting of December 4, 2017. Dated at Moorpark, California, this 14th day of May, 2018. _______________________________ LISA POPE, MMC