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HomeMy WebLinkAbout2017.10.11 Regular meeting transciptOctober 11, 2017 South San Francisco City Council meeting Items 9 and 10 9. Report regarding resolution approving Local Goals and Policies for Community Facilities Districts. (Marian Lee, Assistant City Manager and Steve Mattas, Assistant City Attorney) 9a. Resolution No. 129-2017 approving Local Goals and Policies for Community Facility Districts. 10. Report regarding a resolution of intent to establish a City of South San Francisco Community Facilities District No. 2017-01 (Public Services and Facilities). (Marian Lee, Assistant City Manager and Steve Mattas, Assistant City Attorney) 10a. Resolution No. 130-2017 of intent to establish a City of South San Francisco Community Facilities District No. 2017-01 (Public Services and Facilities). PARTICIP ANTS: COUNCIL Mayor Pradeep Gupta Vice Mayor Liza Normandy Councilmember Mark Addiego Councilmember Rich Garbarino Councilmember Karyl Matsumoto STAFF City Manager Mike Futrell City Attorney Jason Rosenberg City Clerk Krista Martinelli Assistant City Manager Marion Lee PUBLIC David Cincotta, Attorney representing Kashiwa MARTINELLI Administrative Business - Report regarding resolution approving Local Goals and Policies for Community Facilities Districts. 9a. is the resolution. FUTRELL Alright, thank you. Mr. Mayor, Vice Mayor and Councilmembers. Mike Futrell, your City Manager. I’ll be presenting the next two items. They do go together. Item 9 is administrative. If any city in California is to consider forming a community facilities district at any time, with any boundaries, it must have a statement on file as to its goals and affirming that the city will comply with the Mello Roos Community Facilities Act of 1982. So, Item 9 simply does that and our statement of goals simply matches and mirrors what is in State law. This is a foundational document that the City can use at any time in the future, could use it five years from now, but we are required as a city by State law to November 11, 2017 City Council Item 9 and 10 Page 2 of 20 have this statement on file before we can move to the next item which is the actual consideration of possibly forming a community facilities district. So, I’m happy to answer any questions on Item 9. GUPTA Any items for discussion? MATSUMOTO Yes. When I spoke with the City Manager and he explained this to me in our weekly meeting, I told him I didn’t have any concerns. But after reading both Items 9 and 10 I have concerns and I don’t know if I’m on board, not that, I’m one person. But, please explain to me, in the case of what we are currently looking at, the boot. FUTRELL Yes. MATSUMOTO Right. There are three entities. FUTRELL Correct. MATSUMOTO A private Oyster Point or whatever they’re called now. FUTRELL OPD. MATSUMOTO Yeah. And that Japanese firm and the City. FUTRELL Correct. MATSUMOTO Okay, so you have three. Now, what happens, and I believe in the purpose of infrastructure, I always have, I think people need to be supportive of what happens, yadda yadda yadda. But in other districts I’m assuming that at some point in time we’ll start looking at, because it’s old out there, we need to do, and I’m big on infrastructure. Okay? So, another, excuse me, right now there’s only three entities involved so one person can get, not shafted, one person, can get out voted. Thank you. And then if it’s a larger group, say there’s 20 people in this area that we’re looking for, then it takes 11 out of the 20 to vote it through? FUTRELL It depends. In general… MATSUMOTO I’m looking for equity. That’s what I’m having a hard time with. FUTRELL Sure. Now we can speak certainly to Item 10 which talks about the boot CFD in particular. Item 9 again is just a foundational administrative step… November 11, 2017 City Council Item 9 and 10 Page 3 of 20 MATSUMOTO Exactly. FUTRELL to get us to Item 10. MATSUMOTO I need to get that clarified before I get to Item 10. FUTRELL Absolutely. In this particular measure, you are correct that two of the three parties have consented. Kashiwa Fudosan America, which is the third party, has told us they do not consent. Based upon the geographic proportionality they would, in that scenario, theoretically be outvoted and would be part of the community facilities district. Now that is not unlike any other tax which might go to the voters which would require 51 percent. The other 49, even though they voted no, are still brought along with the majority. In this case, however, we looked at who will benefit from this particular community facilities district. If you look at the purpose, the purpose is police protection, fire protection, maintaining the landscaping, maintaining the roads and the infrastructure. That will clearly benefit Kashiwa which is on the tail end of that development. And everyone who goes to that facility will travel through that infrastructure, will enjoy that police protection. We will also present at the November 20th public meeting, a result of the consultant will say because of that infrastructure improvement, the property values for Kashiwa will go up and Kashiwa will be able to charge higher rents to its tenants because of the hundreds of millions of dollars of infrastructure improvements happening all around it. So, from staff’s recommendation is in fact, is very, very fair that Kashiwa contribute to the ongoing maintenance and protection of the area particularly since they will benefit so greatly from it. So, it was not done capriciously but in fact was done and said who will benefit from this and who therefore should, in all fairness, contribute towards its ongoing maintenance. MATSUMOTO But that rate that is established as we will see in Item No. 10… FUTRELL Yes. MATSUMOTO That’s in perpetuity? FUTRELL It is. MATSUMOTO Does that change, is it good for a certain period or is that in perpetuity and it goes with the property? FUTRELL It does go with the property. The rate that’s proposed, there are two rates. There’s 32 November 11, 2017 City Council Item 9 and 10 Page 4 of 20 cent rate and a seven cent rate. MATSUMOTO Right. FUTRELL The seven cent rate is temporary and will fall off once construction is completed on that particular item. The 32 cents will run in perpetuity with the land. Those funds will come into the City in a special district. This Council every year will have the opportunity to appropriate those funds for the benefit of that district. But it does give this Council, frankly the financial ability to maintain to a high quality all of those improvements which Oyster Point Development will be building over the next two years. Because once they’ve finished, they will turn those improvements over to the City and then it will be our mandate, our responsibility to maintain them at that level of quality. And this will give the Council the resources to do that. MATSUMOTO I’m still not there. So, I’ll just defer. ADDIEGO I’d like to hear the answer to your question. If there are more players and it’s a closer vote… FUTRELL On the voting, if there are in fact registered voters in an area, then the registered voters will vote as in any other tax election. In this case, there are not. There are no residents that live in these three parcels. In that case, the votes are apportioned by geographic size of the land. How many acres do you have? MATSUMOTO See, so once again, Councilmember, what if Grellan gets it housing and all of a sudden you have 1200 units, yeah, hello. I mean I just… FUTRELL That would not play here because theoretically if 2.000 residents moved in two years from now, the CFD should be long formed. You don’t retroactively go back. It’s voting as of the time the CFD is formed. If no one lives there at the time it’s formed, those are the rules you play by. If there are in fact residents there at the time it’s formed then you have to play by those rules. And currently there are no residents there. MATSUMOTO So, is it our plan to right now establish all these CFDs? FUTRELL CFDs, also known as Mello Roos districts, are a very, very common way for cities in California to finance infrastructure and to finance these particular types of projects. The benefits that we’re discussing really, while they will theoretically benefit people who live in Sunshine Gardens and Bury Bury, they will benefit most, those people who work and November 11, 2017 City Council Item 9 and 10 Page 5 of 20 perhaps live right there at the Harbor. So, in that sense, it is fair that they would pay for their improvements. But again, it is a very, very common way of doing this and we have some in the City already. We have the Common Greens was an example of a Mello Roos District that this City used in the past. MATSUMOTO It’s, I think it’s a little different. ADDIEGO Common Greens is a little different because their tax rate is the same as anyone else. There’s just dollars that are attributed to the Greens. There’s not an additional tax. FUTRELL There was at one time. There was at one time and it ended. MATSUMOTO So what happens to Genentech? Let’s look at Genentech. ADDIEGO I wanted to if I could, because he started down the path of, or you mentioned all the new resident. So, if I own a condo at OPD, am I going to see that on my tax bill at some point? FUTRELL It will be built into the purchase price or the rental price of a residence there just like a biotech who would rent space in their new biotech building. The 32 cents would be built into whatever their per square foot allocation would be? ADDIEGO With the property or with the tax bill? FUTRELL It is billed on the taxes. They would see it on their property tax bill once a year. But when they negotiate the rental price with theoretically a biotech that would be part of the discussion. ADDIEGO Okay, so they would pay the, once we get past the seven cents, they would pay 32 cents a square foot for their 1200 square foot home? FUTRELL Correct. ADDIEGO You know why it’s far, I think why it is fair is because in so many cases I remember the Terra Bay discussions and that project wasn’t going to work as far as the revenue it brought in and the service it needed until the final phase that was supposed to include a hotel down where there will a hotel but it’s so many years later. With everything that’s happening I don’t think the existing residents need to be burdened, and have less services available. So, the CFD is really a way to shift that burden of the new and so it’s not just the regular general fund. That’s the beauty of it. November 11, 2017 City Council Item 9 and 10 Page 6 of 20 MATSUMOTO So, we’re going to identify, each CFD will have special needs. Are we just going to say police, roads? How are we doing this? FUTRELL You can specify. In this particular CFD we are proposing to leave it wide open for Council discretion. To Councilmember Addiego’s point, if hypothetically we did not form the CFD, then the burden would fall to the general fund to pay for all of the improvements that are being built to pay to maintain the new landscaping… MATSUMOTO What happened to community benefits? I’m sorry. FUTRELL Well, community benefits are wonderful but they are one time money. The money mentioned earlier for the fire department, that’s one time money and we cannot use that to pay police salaries or fire salaries. We cannot use one time to pay the salaries for park maintenance workers. So, under a community facilities district, we can use the money to pay the salaries for park maintenance workers who would go to Oyster Point and maintain the recreational areas, maintain the Bay Trail and the like. Again, absent the CFD, we still have the responsibility to do that, we would just pay for it out of the general fund. MATSUMOTO See, now, I understand the park and rec but let’s talk about police. Then are we going to increase because it’s going to require more policing than are we going to say, okay, this area because of population? Let’s just take OPD, let’s take City, let’s take whatever that Japanese company’s name is, sorry. FUTRELL Kashiwa. MATSUMOTO Kashiwa. Police services. What are they going to get more than what they’re not getting now? FUTRELL I would say that’s yet to be determined. And this Council will make that determination. If, hypothetically residential comes, if hypothetically this area grows into the vibrant seven day a week destination that some hope, then yes, it will require additional police protection and these funds could provide for that. If residential does not come and it becomes a biotech area, which is open five days a week, 8 am to 5 pm, then less police protection, frankly, will be required. But we can forecast and do know that the park maintenance and the other infrastructure work will fall to the city and this will at least provide the resources for that. MATSUMOTO I understand it but right now, remember, because there’s relatively little development November 11, 2017 City Council Item 9 and 10 Page 7 of 20 west of 101, ergo, before, we used to park in lieu fees that we no longer have, so now we’re having with new development so we can have recreational east of 101 in our neighborhoods because the demand is growing. So, we have a new, we no longer have districts 1, 2, 3, 4, 5 or whatever it is. We now have people who are building. And it makes sense. So, we already have that in the system. But that’s a one-time fee. FUTRELL It’s a one-time fee. Correct. So, we can use that to build a park but not to maintain it. ADDIEGO And that’s the challenge for any municipal government. You can always find the dollars to create something but the maintenance is where we all find .. GARBARINO fall down. ADDIEGO ..ourselves frustrated. MATSUMOTO If you take these businesses and, the City pays the same thing. We’re going to be contributing the same tax, we’re paying into to as our other two partners? FUTRELL Only to the extent that commercial buildings would be built on City land such as a hotel. The City contemplated hotel would in fact pay this. If we had any other commercial enterprise on City land, we would pay this. But public agencies are exempt from this. The City’s not going to pay itself essentially. MATSUMOTO So, let me now go back to Genentech who owns most of the real estate. Let’s take ACP with all, whether it was Slauw, ACP, and let’s take ARE, you know, who has built different things. How do they pass that on because they pass it on to the people that rent? GARBARINO Through their leases. MATSUMOTO The leases, through the leases, rather? FUTRELL If hypothetically, there was a community facilities district that covered those entities, Genentech being its own landlord would just pay the bill and it would be added to its property tax. Others would also pay the bill and I presume as a landlord they would pass that on to their tenants hypothetically. ADDIEGO Is there a separate board for the CFD? FUTRELL This Council would sit as the board. November 11, 2017 City Council Item 9 and 10 Page 8 of 20 MATSUMOTO Another function. FUTRELL Just as you do for other special districts. Right. So again, Item 9 is kind of just the foundational, even if no CFD is formed at Oyster Point, Item 9 is wise to just have that on file if in the future Council were to consider a CFD. And again, it just memorializes that we will in fact follow State law as it relates to Mello Roos Districts. GUPTA Alright. Any other comments, questions on Item 9? MATSUMOTO But we’re voting to approve local goals and policies. I didn’t see any. Oh, it’s here. FUTRELL Item 9 merely references State law. MATSUMOTO Yeah, I mean, but under the recommendation - it is recommended the City Council adopt a resolution approving local goals and policies for community facilities district. It doesn’t say what we’re approving. ADDIEGO The eligible public facilities include but are not limited to those listed in the act. MATSUMOTO It’s very generic. FUTRELL That’s the intent, is to give, because again, Item 9 does not create a CFD. It does not contemplate a CFD. It simply certifies… MATSUMOTO I can just see it. Well, Matsumoto you voted for it. I’m just more… FUTRELL It just certifies that we will in fact follow State law. And then that gets us to Item 10 which in fact does have a delineation of a specific CFD and what the money might be spent for and how much. MATSUMOTO This doesn’t require a two-thirds vote or a whosy-whatsy does it. ROSENBERG No, this, so Item 9 is the adoption of the policies. It’s just a majority vote. It’s three councilmembers voting in the affirmative. ADDIEGO I’m not sure I can support this if it’s not unanimous (laughter). ROSENBERG Mr. Mayor, I just want to clarify something. GUPTA Yes. November 11, 2017 City Council Item 9 and 10 Page 9 of 20 ROSENBERG This action, the resolutions, Item 9a, Councilmember Matsumoto, there is a statement of the local goals and policies. And that is general in nature, excuse me, applicable across all potential CFDs within the City. And if you thumb through that attachment, it talks about what the eligible facilities are, what the priorities are, how the bond financing would be structured, disclosures, how the tax would be apportioned and this is all the City’s policies and it is consistent with the Government Code which requires you to have a policy that has all these categories. So, it’s almost kind of like your general plan for CFDs. And then specific CFDs are formed with the specific process which Item 10 will speak to that as like the first step in potentially forming CFD 2017-01. ADDIEGO Mr. Futrell, are we anticipating a bond? FUTRELL Not necessarily. But again, we provide the entire pallet of things which State law may allow you to do in the future as opposed to limiting Council’s hands in any way. ADDIEGO Right. MATSUMOTO And this is for infrastructure past or also present because I am making the assumption that we will be working very diligently to create means to mitigate the traffic impacts like we did with the Fly Over, etcetera. And that’s going to, some of the traffic mitigation measures will be new things, ergo, ergo, the produce avenue ramps or whatever. FUTRELL This could be a vehicle for that type of construction, yes. MATSUMOTO And after coming out of my TA meeting, a lot of the funding mechanism is not only because we’re trying to leverage monies because under Measure A there isn’t enough to meet current demand for traffic impacts, etcetera. So, part of it will be, beside the City’s contribution, we can use other grant monies, yadda, yadda, yadda. Ergo, this could be calculated into that formula. FUTRELL This, a vehicle of a community facilities district, could be used to raise gap funding for large transportation projects like you suggest. MATSUMOTO You got me. GUPTA I knew there was some angle. Alright. GARBARINO I get it. GUPTA So do we go ahead? November 11, 2017 City Council Item 9 and 10 Page 10 of 20 NORMANDY I’m in support of this. I think it’s looking into the future. I mean, I take back, knowing that I belong to a condo and my landlord has to pay HOA dues. And sometimes there’s people against it and for it. But being able to maintain it for the future, the amount of money and investment on all sides is extremely important. I still don’t understand how this, how police protection services would work in such a proximity, and maybe that’s more probably a later discussion but I understand why it’s in there now. FUTRELL Right, to give the full flexibility to react in the future if it’s needed. NORMANDY Okay. That’s it. GUPTA Okay. MATSUMOTO Maybe we can have light rail. ADDIEGO Yes. I would like that. GARBARINO We talked about that some years ago. GUPTA Yes, how about monorail? GARBARINO Are you looking for a motion? GUPTA Yes, I’m looking for a motion. GARBARINO I’ll make the motion. GUPTA Alright. Thank you. ADDIEGO I’ll gladly second that. ROSENBERG This is just, to clarify, this is a motion to approve the local goals and policies for CFDs. Yes, thank you. MATSUMOTO As ambiguous as it is. GUPTA Item 9. Okay, the motion has been made and seconded. Could we have the vote? MARTINELLI Councilwoman Matsumoto? MATSUMOTO Great, thank you. Yes. November 11, 2017 City Council Item 9 and 10 Page 11 of 20 MARTINELLI Mayor Gupta? GUPTA Yes. MARTINELLI Vice Mayor Normandy? NORMANDY Aye. MARTINELLI Councilman Garbarino? GARBARINO Aye. MARTINELLI Councilman Addiego? ADDIEGO Yes. GUPTA Alright. Thank you. Now we go to Item No. 10. And I’ve got one public comment card. So, I will be calling you after the staff presentation. Go ahead. MARTINELLI 10. Report regarding a resolution of intent to establish a City of South San Francisco Community Facilities District No. 2017-01 (Public Services and Facilities). 10a. is the resolution. FUTRELL Thank you Mr. Mayor, Vice Mayor and Council. Mike Futrell, your City Manager. This is staff’s recommendation to signal the intent to form a community facilities district covering the three properties mentioned at Oyster Point. A map of those properties is attached as Exhibit A to the resolution. Note that forming a CFD is a three part process. Tonight, we are asking you to just a vote to accept the resolution of intent to form. We’re not actually asking you to form a CFD tonight. That would trigger a process with a public meeting, which we’re suggesting would be on November 20th and at that public meeting you would take public comment and if you found it agreeable, that is when you would actually vote to form the CFD. So, that vote it not tonight. Tonight is essentially introduction of the item in a public forum. Then we have so many days before we can consider it again so that the public can become aware of it and make comments. Then we’ll have a public comment on November 20th, public hearing. If you form the CFD on November 20th, that triggers the third step, which is an actual vote by, in this case, the three parties. We anticipate that would come to Council in March. Because again, there are statutory waiting periods of when we can bring the technical vote. So, tonight is consideration of forming the CFD and an examination of its terms and we would ask that November 11, 2017 City Council Item 9 and 10 Page 12 of 20 you vote yes on just the introduction of the item, the intent to form and then we’ll revisit this again at a public hearing on November 20th. And that is when you might actually form the CFD. So, this particular CFD, we’ve covered some of it already. And the Exhibit B, the authorized list of services gives you wide discretion, police protection services, maintenance and lighting of parks, pathways, streets, roads and open spaces, including without limitation, roadway maintenance, street light maintenance, traffic signal maintenance, parks, waterfront and bay trail maintenance, landscaping, parkway, median and open space maintenance, including erosion prevention, public surface parking maintenance, operation and maintenance of public restroom buildings and operation and maintenance of storm drain systems. So, we would ask again that the Council accept this item and vote to introduce it signaling the resolution of intent and that would give the public an opportunity to examine this for the next 30 days and then we’d follow up with a public hearing on November 20th. Happy to answer any further questions. GUPTA Before we get the Council involved in discussion of this item, I’d like to invite one public member who would like to say a few things. You have, Mr. David, I can’t read your last name, welcome to the Council and you have three minutes to make your point. CINCOTTA Okay, thank you. My name is David Cincotta. I’m here from Jeffers, Mangle, Butler and Mitchel and I’m here on behalf of Kashiwa Fudosan America. And we have been meeting with staff of the City and talking about this community facilities district. We cannot support it in its present form and in the present allocation. We hope to continue the communication with the City staff about it but just to respond to some of the questions and points that were already raised by Mr. Futrell – who will benefit? Who will benefit from this? And we do not see any particular benefits for Kashiwa Fudosan America. You can see the list of improvements here. There are police protection services, roadway maintenance, traffic signal maintenance, parks, waterfront, improvements to the marina. All of these will benefit the city and will benefit OPD, but they don’t directly, none of these improvements directly benefit Kashiwa Fudosan America. And if there is an argument that these benefits in the long run benefit the entire neighborhood, then we ask why isn’t other commercial enterprises along Oyster Point Boulevard included in the community facilities district which would reduce the amount of the assessment to everybody, because if they’re all going to enjoy the benefits of the marina, which is what we were told, if they’re all going to enjoy the benefits of better police protection, if they’re all going to enjoy better parks, better maintenance, why don’t they all be included in the community facilities district. So, we will be talking to you again. We will be November 11, 2017 City Council Item 9 and 10 Page 13 of 20 continuing in our communication with the staff, but at this point, at this point in time, we don’t feel we can support it and we will be talking further. I’m prepared to answer any questions you might have. GUPTA Thank you very much. CINCOTTA Thank you. MATSUMOTO May I ask a question? GUPTA You can ask a question but okay, go ahead. MATSUMOTO Is there anything in this that you could or your client could support when you see the list that is presented to us, or is it just a straight flat out no to the CFD? I mean, how long has Kashiwa been in South San Francisco at that location? CINCOTTA Oh, I can’t recall exactly when they purchased it, but it’s been definitely, I think over seven years. I forget exactly when they purchased the property. I wasn’t representing them at the time. MATSUMOTO But approximately seven years? CINCOTTA Well I think it could be longer, I just don’t know. I know it’s at least that long, but I don’t know how long. You know which properties they have. You all recognize which parcels they have, the north east corner of this map. MATSUMOTO And so they have enjoyed the improvements and things that we have done as a city to that area, number one. Number two, do they object to paying or setting fees aside for infrastructure knowing that, I mean, we hope they will be there for a while? Or do they acknowledge a responsibility? CINCOTTA Yes, they’re definitely aware of their participation. They pay their taxes. They pay a considerable amount of taxes, but this is asking for a fee, as you heard, of 39 cents a square foot, to this project. There is a report that they believe, that Mr. Futrell and his staff believe that will be allowed to increase our rents. If we thought we could increase our rents we would do that. But I don’t think we believe the reports thus far. GUPTA Thank you very much. That was the only public comment card that I had for this item. So, I’m going to give a chance to anyone else who might, if not, let’s continue the discussion with the Council Members involved here. So, I’d like to open the discussion. November 11, 2017 City Council Item 9 and 10 Page 14 of 20 Who will start? Yes. MATSUMOTO Logically speaking, I know that it’s the boot, but what if we expanded the district? So, there would be others to participate in this and it wouldn’t fall on three parties. FUTRELL I would say certainly theoretically, you could expand the boundaries. That would require further negotiation with other parties and getting their consent. In this particular case, we’ve negotiated with the other consenting party, Oyster Point Development, over the past eight months and know that these figures, the 32 cents and the seven cents were hard fought. And they do match what we believe is required for the City to complete the maintenance out there. So, structure has been built and consent has been given. But certainly, if it’s the Council’s will, we could go back and try to expand the district and engage other land owners but I do not know the outcome of that. MATSUMOTO See it, it’s, what’s saying to me is the City and Oyster Point Management have something to gain from this based on what they’re trying to accomplish and what we’re trying to accomplish. It will certainly enhance what they’re doing, whereas Kashiwa, other than, does not gain more. They recognize their contribution that they should contribute to infrastructure etcetera. So, I am, I am… FUTRELL Please know, none of this money will be spent on OBD’s property. None of this money will actually be spent on marina, as you stated. If you look at the map, the marina itself is not included in this drawing. The money will be spent on the public infrastructure, which everyone uses, the roads, the drainage, the street lights, and we went to the three property owners that were the most impacted, the most heavily impacted by those benefits, and said well in fairness, they should be the ones that contribute to the maintenance. It is not a case where OBD will benefit disproportionately or the marina will benefit at all. But in fact, it’s just the public infrastructure that everyone will benefit from. MATSUMOTO I beg to differ with you. If this comes to fruition and what I’ve heard from Oyster Point Development with the housing, with the retail, with the walkway, they will benefit. More so, you know, and we will benefit. They will. When you talk about public spaces, you know, if they get their housing, you know, beach front, they will benefit. FUTRELL My point was, this does not alleviate them from the obligation to maintain their own landscaping. MATSUMOTO No, I understand that. November 11, 2017 City Council Item 9 and 10 Page 15 of 20 FUTRELL Or their own public sidewalks, so I didn’t want that out there, that somehow this would benefit any private company. The money can only be used for the public infrastructure. MATSUMOTO And we stand as a City to benefit because we make that a destination. Okay, so I still, I just think it’s, I can’t, I’m struggling with that right now. ADDIEGO Mister Mayor. GUPTA Go ahead. ADDIEGO Can we get any sense of, I know the seven cents per square foot, that sunsets, when it reaches that two and three quarter million dollars FUTRELL That is correct. ADDIEGO Do we have any idea of what the district will generate at the 32 cents? FUTRELL Assuming that Oyster Point Development builds out to two million square feet, generally, assuming we build a hotel of roughly 300,000 square feet, it will generate approximately $850,000 a year. From the City side, we do not believe that will cover all of the maintenance that may be required out there but it will certainly take on a big piece of it. ADDIEGO Sure. And within that 850 was there some idea of what the Kashiwa portion would be? FUTRELL Do you have those numbers? LEE Yeah. ADDIEGO I’m just looking at if there is a burden, what’s the burden, you know? LEE If I could just take this opportunity to address one thing. So, the key rationale for the three properties is geographical nexus. It will benefit many, but the actual public infrastructure improvements really abut to the three properties, being the city owner, OPD, as well as Kashiwa. So that was one of the key factors in setting the boundary the way that we set it. In terms of their actual contribution to the CFD funding that we will be collecting, there is a sense of equitability. We can debate what that exactly means, but the tax assessment is by square foot. So OPD has the largest square foot of development and these are very approximate numbers… MATSUMOTO Give us numbers? November 11, 2017 City Council Item 9 and 10 Page 16 of 20 LEE They will pay about 70%.... FUTRELL OPD. LEE OPD will pay about 70% of the total monies collected. Kashiwa’s portion is about 28% and hotel will be 2%. And these are very approximate numbers based on the development assumptions we’ve made. ADDIEGO 28% on, if were using that number of 850,000, I mean I wish we were using a million, I could factor it out easier. But then, so how many square feet does Kashiwa have? LEE They have approximately 460,000 square feet. ADDIEGO 460,000? And do we know, do we have any idea what they get per square foot on their leases? Do we? LEE Yes, its public information and it’s a little over three dollars per square feet. ADDIEGO So, this is a ten percent push on what they get? LEE Yeah and I think the other thing I might add is it is the owners discretion to decide how much they want to pass on to the lease rate. ADDIEGO Well they can only pass on what the market allows, yeah, yeah. I can see why they’re here tonight. It’s not an insignificant amount if your base is three dollars a square foot. MATSUMOTO No its not. GUPTA Vice Mayor? NORMANDY Nothing. GUPTA Any more questions? ADDIEGO I’m prepared to take the next step. GUPTA City Manager, does the staff want to present anything else or just move ahead? FUTRELL If Council is ready to make a motion to just introduce the item, that would be appreciated. ROSENBERG So if Mr. Mayor if I may, there’s two actions that are required tonight. And the first November 11, 2017 City Council Item 9 and 10 Page 17 of 20 would be, there’s a document in front of you that has a redline, this is the consent and waiver form that would be the City is the property owner of signing, consenting to this CFD boundary. The redline is the version that we’d be asking that you make a motion authorizing the City Manager to sign the consent and waiver form on behalf of the City. That’d be the first action I’d be asking for tonight. GUPTA Do you want to read a motion for someone who would like to champion that with the…. ROSENBERG Sure, it would be a motion authorizing the City Manager to sign the consent and waiver form on behalf of the City. GUPTA Do I hear a motion? NORMANDY So moved. GUPTA Thank you Vice Mayor. Second? ADDIEGO I’ll go ahead and second. GUPTA Seconded by Councilmember Rich Garbarino. Can I have the vote please? GARBARINO They’re interchangeable. MARTINELLI Mayor Gupta. GUPTA Aye. MARTINELLI Councilman Garbarino? GARBARINO Aye. MARTINELLI Councilman Addiego? ADDIEGO Aye. MARTINELLI Vice Mayor Normandy? NORMANDY Aye. MARTINELLI Councilwoman Matsumoto? MATSUMOTO No. November 11, 2017 City Council Item 9 and 10 Page 18 of 20 GUPTA Okay the motion has four votes, one against. ROSENBERG And the second action would be adopting a resolution of intention to establish a community facilities district in order to declare the city councils intention to form a CFD to be known as City of Couth San Francisco Community Facilities District No. 2017-01 public services and facilities and set a public hearing date regarding the formation of the CFD for November 20, 2017. GARBARINO I’ll make a motion. GUPTA Motion made by Councilman Garbarino. ADDIEGO I’ll go ahead and second that. GUPTA And seconded by Councilmember Mark Addiego, let’s hear the vote. MARTINELLI Councilmen Addiego? ADDIEGO Yes. MARTINELLI Councilwoman Matsumoto? MATSUMOTO No. MARTINELLI Vice Mayor Normandy? NORMANDY Aye. MARTINELLI Mayor Gupta? GUPTA Yes. MARTINELLI Councilmember Garbarino GARBARINO Aye. GUPTA The motion passes four to one. Thank you very much. ADDIEGO Mr. Mayor, before we move along, I just wanted to ask staff before I forget. Now we were talking, I was trying to look at the impact to the, to the landlord, at the buildings that Kashiwa has and so we were talking about three dollars a square foot as a monthly rental November 11, 2017 City Council Item 9 and 10 Page 19 of 20 rate, right? FUTRELL That’s correct. ADDIEGO It’s a monthly rental rate, that’s where I went wrong and I wanted to correct myself and then I said something about a ten percent push, but it’s not, if that the monthly rate per square foot, then the annual is 36 right? FUTRELL Correct. ADDIEGO And so 32 cents, it’s an annual fee so its 32 cents a square foot against that $36. I’m very comfortable with that. That’s one percent. GARBARINO One percent. GUPTA Thanks for making that example and those numbers. November 11, 2017 City Council Item 9 and 10 Page 20 of 20 CERTIFICATION I, LISA POPE, Master Municipal Clerk/Transcriptionist, do hereby certify that the foregoing Pages 1 through 19 are a full, true and correct transcript of the proceedings of the South San Francisco City Council consideration of Items 9 and 10 at its meeting of October 11, 2017. Dated at Moorpark, California, this 14th day of May, 2018. _______________________________ LISA POPE, MMC