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HomeMy WebLinkAbout2017.11.20 transcriptNovember 20, 2017 South San Francisco City Council meeting Item 1 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) 1a. Resolution of formation of 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 City Attorney Jason Rosenberg City Clerk Krista Martinelli PUBLIC David Cincotta, Attorney representing Kashiwa MARTINELLI Facilities district public hearing resolution of formation of community facilities district and resolution calling special land owner election for community facilities district. 1a resolution of formation of community facilities district, City of South San Francisco community facilities district No. 2017-01. 1b resolution calling special landowner election for community facilities district City of South San Francisco Community Facilities District No. 2017-01. GUPTA Before we start the agenda item, I would like to make one statement right now for the record, this is the time and place for the public hearing for community facilities district No. 2017-01, public services and facilities, the hearing is to inquire into the formation of the district and the levy of special tax for public services and facilities in the district. Before I formally open are there any property owners or registered voters in the district November 20, 2017 City Council Item 1 Page 2 of 22 who wish to file written protests? If so, they must be filed with the City Clerk now. The City Council acknowledges that we have received a protest filed from Kashiwa Fudosan America with the City Clerk. Am I right Madam City Clerk? MARTINELLI Correct. GUPTA So we have one written protest at this time are there any other? If not we will proceed. The hearing is… MALE There are two written protests from Kashiwa. GUPTA Okay. Do we have both of those, Madam Clerk? MARTINELLI I was under the impression that it was one. MALE I think there was the one from Jeffer Mangles and there was another one that we… MARTINELLI Just gave tonight. Okay, got it. I was about to hand that out to you, I didn’t realize, it thought this was about comments I didn’t receive. I didn’t realize it was a separate protest so I’m going to hand this to you right now and put one in the back of the room for the public. GUPTA So for the record, we have two written protests in our hands right now at this point in time and there are no other written protests so I would go ahead and the hearing is now open and we dwill have our first presentation by the staff about the district and after that we will receive comments and questions and any other protests from any interested persons. When all comments have been received, the hearing will be closed. So you go ahead and make the presentations. MATTAS Thank you. Dear Mr. Mayor and Vice Mayor and members of the Council, I’m Steve Mattas, Assistant City Attorney, making the presentation on behalf of the staff this evening. I would like to as I start, introduce to the Council, Scott Ferguson, Wengi Fu, and Libby Seifel who are also here if the Council has questions. Scott is the special counsel for CFD’s, Wengi is with Taussig and Associates, who wrote the CFD report, and Ms. Seifel is with Seifel and Associates, who wrote the economic analysis that is also an attachment to the report. The presentation this evening is about the community facilities district and its benefit to the City of South San Francisco and in particular to the Oyster Point area. A Mello Roos community facilities district is one that authorizes a city to levy a special tax. It has to be approved by a two thirds vote of the property owners November 20, 2017 City Council Item 1 Page 3 of 22 when it is levied. So if the Council were to take action this evening following the public hearing, your action would be to call an election and to establish the formation of it. But there is ultimately a vote of the property owners that takes place afterwards. On October 11th, the Council adopted the resolution of intention to establish the CFD and as part of that they authorized the City to sign the consent and waiver and also authorized this hearing tonight. So we prepared a staff report, we prepared the community facilities district report, that was called for in the action on October 11th, and all of those are part of your packet this evening. What are the purposes of a CFD? A community facilities district is a special tax that’s collected to be used to finance public services and public infrastructure. It’s important to note that the OPD, Oyster Point Development, and the Successor Agency are funding approximately $70 million in infrastructure improvement costs in the marina area. Just for clarity sake, none of that 70 million is included in this CFD that is before you this evening. That’s actually being funded through payments by OPD, payments that are already in place from the successor agency, and a potential separate CFD that would be formed by OPD subsequently and would only involve their property. This is a picture of the new infrastructure that is being proposed out in the area and I direct your attention, really to the water front areas of these. You can see the buildings that are proposed to be constructed in phase 1d, the office commercial buildings. Then you see the walkways along the marina waterfront. This is really to give you an idea that the kinds of improvements that are being constructed out there, as the Council will recall, include new streets, new roadways, new park areas, enhancement to the existing land area, as well as improvements to the beach park area that exist out there. There’s also going to be improvements to the fueling facilities at the marina, which serve all of the boating population that exists in South San Francisco and regionally. So what are the public improvements and services that are going to be authorized by this CFD if the Council decides to move forward? The authorized service include the maintenance of the new public infrastructure, the parks, the pathways, the streets, the storm drains and the open space, and also provides for the potential of enhanced police services, and by that we specifically mean, you know, the police have been out in the East of 101 area previously, but as you improve this area, as you more occupy this area and make it activated on a longer basis, you’ll have a need for additional police services that would go on out there. So police services are included. The authorized facilities that are included in this CFD are limited to the fuel dock and the fueling system. As the Council recalls there is an existing antiquated fuel dock and fuel system out there that does need to be replaced in the upcoming future and this would provide funding for that to occur as well. This slide shows you, and I would advise the Council that based in part on the fact November 20, 2017 City Council Item 1 Page 4 of 22 that we got the correspondence from Kashiwa, on Friday, I’ve added a couple of slides to the presentation tonight that were not in your packet and this is one of them. This slide is intended just to show you that the costs associated for the services side will be approximately $1,000,000 a year, between phase 1 and phase 2c and that there is an additional roughly $200,000 in administrative type expenses that go with the CFD., The Council should understand that these are the maximum levels before the inflationary adjustments are allowed, but this doesn’t mean that the Council has to, at any point in the future, and any subsequent one, impose the maximum amounts. You could impose less if your costs are actually less during those time periods. This slide talks more about the public services and it shows, and again this is a new slide, so I just called this to the Council’s attention. This slide shows that, again, the authorized services equate to about $998,000 plus administrative expenses, so think $1.2 million a year. And then you ask yourself, well what are we spending out there right now for the Oyster Point area? And that’s what this lower part shows. And it shows that were doing occasional park maintenance out there and so that’s the total of about $5,000 a year, and were doing pump station maintenance to the total of about $8,000 a year. And then we’re also doing methane monitoring out there for $67,000 a year, but mind you the methane monitoring is not part of this new CFD. That would be a separate City expense that will be carried forward in the future. One might ask, why are these costs lower? As the Council will recall the Harbor District JPA has an allocation of responsibilities for costs under an existing JPA that has the Harbor District responsible initially for some of those costs but some of those properties have now been pulled out of the Harbor District’s jurisdiction and so this $998,000 in additional costs is really additional services and additional costs that the City would be providing pursuant with the fund provided by the CFD. The proposed cost of the CFD as indicated by in your staff report are approximately 39 cents a square foot. That’s in annualized costs and so it’s important to understand that’s roughly about 3 cents per month if you’re talking about the addition of the rent, how it affects that. And that includes 32 cents per square foot annually for the services side of it, so to fund the $1.2 million and seven cents per square foot annually, and that’s to fund the $2.75 million for the fueling system repair. The second one as you recall, also has a sunset on the tax, which is estimated right now to be June 30th of 2031. And that’s really because once the full $2.75 million dollars has been funded for the fueling system, that portion of the tax just disappears. It’s not authorized to be imposed anymore, so the tax would drop at that point. This slide is in your packet and it’s intended to show the properties that are affected and to show which properties have consented to the formation of the CFD and which have not. So you see in the kind of greenish shading, those are the November 20, 2017 City Council Item 1 Page 5 of 22 OPD properties. Those are properties owned by OPD right now. The blue properties are the properties that are owned by the City and the red properties are the two properties owned by Kashiwa Fudosan America. Both the OPD and the City have consented to the formation of the district. Kashiwa has not. Staff has had discussions with Kashiwa about that, but today Kashiwa has opted not to consent as reflected, as most recently in their letter to you from Friday. This slide is intended, this is in the PowerPoint presentations you had, its intended to show the potential uses on the various properties, or the approved uses. If you look at Oyster Park Development LLC., that’s their proposed office R&D project and a mixed use development. That’s what they’re presently entitled for. As the Council is aware they are proceeding with consideration of having some residential added to that and some of the office R&D taken out. But this reflects their present entitlements. Kashiwa Fudosan America has commercial offices, the two existing offices that they have out on site. And then on the City’s parcels, you have on parcel six, the hotel, which the City is presently in the RFP process for a developer on that. And then parcel five is an open space recreation, potential commercial recreation development that is there. So those are the potential uses of the various properties. So what are the recommended actions tonight? Staff is recommending that the Council conduct the public hearing, that you adopt the resolution of formation of the CFD, and that you adopt the resolution calling the special land owner election for the CFD. Those are the two additional packets. I did want to spend a few moments addressing the letter that was received from Kashiwa Fudosan late on Friday and that the Council has received and is in the packet right now. We have representatives here as I introduced them to you earlier today and I would also add to that Marion Lee and Richard Lee. If there is questions that are more specific to staff that can be addressed. And so were prepared specific questions that the Council may have about that letter. Specifically though, we wanted to go over just a few points that are referenced in that letter, so that the Council has the benefit of staff’s input on a portion, on at least portions of that letter as it stands right now. I would just in an overall sense say that in consultations with our special CFD counsel and our team we do not believe the letter prevents the Council from taking action this evening, if you would like to take action. There are a number of issues raised in the letter, those issues in a highlighted sense, or in a bucketed sense if you will. The first issue speaks to, is the issue of whether or not this CFD is appropriate because of whether or not your providing additional services. The CFD law does require that you spend money public facilities and it also allows you to spend funds collected in a CFD on additional services. If I can remind the Council again of the slide that I showed you that shows the differential in the costs. At the moment, the City is spending, you know, well below $100,000 there in total costs in November 20, 2017 City Council Item 1 Page 6 of 22 the Oyster Point area on an annualized basis. If you then factor in that we are constructing over $70 million worth of new improvements in that area between us and then some private improvements by OPD. Those improvements require maintenance to keep them in the condition that they’re installed in when you do this. And so. so from the standpoint of additional services, we think it’s very clear that this CFD and the funds that would be drawn from, for the CFD would be used to provide additional services in that area. Those could include roadway maintenance, park maintenance, the BCDC trail maintenance issues in the area, the storm drain systems, the lighting, etcetera. So all of these are additional services that would be provided out there that are not presently provided. The second issue, if you will, that was raised, is there are a number of emails that were cited in the material from the counsel for Kashiwa Fudosan and our response to that initially for the Council’s benefit is twofold. First, some of the emails are quoted in a way that they are out of context of what the actual documents relate to. So to be clear, Seifel and Associates has been hired by the City to do an analysis of the economic benefits and value enhancements of this CFD. They did that report. It’s in your packet right now. Seifel has also been retained by the City to assist in an economic analysis of the OPD developments because as the Council is aware, you have a proposal for residential out there that would involve an amendment to a development agreement. And there were discussions if, with Oyster Point Development. So some of those emails that talk about what Libby Seifel and her firm were doing are actually related to the second issue not the first issue. There’s also a line of discussion in the emails that talk about when we actually sign the contracts with Seifel and Associates for the CFD matter. And to that, when we first started talking with Seifel and Associates, we were looking at how we would scope out their work, as we often do with consultants and it became very clear to us that we didn’t want to have one scope for all of the work that they were doing. It’s actually two separate tasks, it’s actually being paid with two separate sources of funds. And so we wanted to scope them out. So there are some emails between a couple of staff members that talk about how we’ve changed the scope in response to discussions with Seifel and Libby responded to some of those, but those are because we were setting up the scopes of the respective projects and tasks in an appropriate manner. The last issue is that, the Council should be aware that when Seifel and Associates was, were selected for this, there was a typical process where we looked at multiple potential consultants for this. And then ultimately landed with Seifel and Associates because we thought they were the most qualified to do this. And so there were discussions in some of the emails about finalizing the contracts, if you will. And that was after we had gone through a recruitment process. We did reach out, in particular, we reached out to OPD when we were doing the November 20, 2017 City Council Item 1 Page 7 of 22 OPD side economic analysis to get their input on the consultants and so there is some communication from OPD back to us saying that they would be okay with Seifel. They didn’t select Seifel. They didn’t have the final say in Seifel. But we did solicit their input on it as it relates to the economic analysis. The last thing, the last bucket, if you will that I would like to discuss with the Council relates to the Seifel report and I’m going to defer a lot of any questions that the Council may have and that the members may have, if they raise them here to Ms. Seifel once the public has had the opportunity to talk. But there are a few issues that I just wanted to bring to your attention because they specifically address issues that are in the concerns raised about the Seifel report. So first off, as the Council is aware of, because the Council is aware that Ms. Seifel and her firm have worked before for the City. They’re very experienced at the kind of expertise that they bring to this. And many cities have used them and South San Francisco has used them before as well too. So we believe that their skill set is very strong. The Seifel, you know, there were contentions, if you will, that Seifel was kind of spoon fed a conclusion here and nothing is further from the truth than this. Seifel did their own economic analysis here. They looked at and reviewed existing information that was provided to the City. And you can imagine when you’re doing an economic analysis, you have to get data from multiple sources, one of the sources is the City. They also got market data from commercial brokers, etcetera. And so, one of the points we would make is that they did their own independent analysis. They did have contacts with us about gathering data, but it wasn’t because there was a conclusion that we were trying to get them to, it was their own analysis that came back to the City. The second one is that, as I mentioned earlier, there is about $70 million worth of capital improvements that are going to be made out there, none of which is funded by this CFD. And so Seifel had to talk to OPD about the value of those improvements to be able to put that information into their report so that they could substantiate their own understanding that there would actually be enhancements to that area out there. The third issue is the, what was the purpose of the CFD itself. And as we’ve said before, the purpose was to fund the services that would be provided to the new infrastructure and to fund the capital facilities, and Seifel had to get confirming information from the City about what those are. There’s also a contention in the Kashiwa report that the Seifel analysis would not stand if it were reviewed because there wasn’t a sufficient factual basis or evidentiary basis, if you will for that. Citations in the Seifel report are too well established studies that have done elsewhere that look to the economic benefits that have arisen in other projects that have had these kind of enhancements. Seifel has reports cited to the Urban Land, Bane and Company, Neilson Broking Institute, the Center for Real Estate and Urban Analysis, the Trust for Public Land, and others. And November 20, 2017 City Council Item 1 Page 8 of 22 these are, these are commonly used sources when you’re doing this type of work and miss Seifel could speak more to that if the Council has questions. There is a contention in the Kashiwa report that miss Seifel did not look at the existing conditions relating to Kashiwa and that is also not supported when you actually get into the report. Ms. Seifel and her firm actually looked extensively at what was there in terms of existing development, existing rental information, and also improvement that had been made to the Kashiwa property to make it even more desirable as a space. So she did spend time looking at that. The last issue that I just wanted to raise is that there’s suggestion that there isn’t sufficient market data that she looked at in terms of comparable rents. And again, the Seifel analysis did look to Kushman and Wakefield, who is a brokerage firm involved in issues, they looked at their data. They looked at other data that you would typically look at to identify market comparability and market information and so from a staff standpoint we believe that the Seifel report does present a fair presentation of the information to the Council. We recognize that there might be disagreements amongst experts and Kashiwa has hired their own, who have looked at issues. But the Council’s been presented with a thorough report that you can consider. Ultimately, and this is the final point that I would make, ultimately, this is not an assessment district, and the reason I say that is because in an assessment district you have to show an actually benefit and a proportionality of the benefit. This is a special tax. It doesn’t have the requirement of proportionality. So, Ms. Seifel’s report is not necessary for the Council to act, but we did think it was appropriate to prepare both to share that information with Kashiwa Fudosan America representatives, but also to share with the Council so that you would understand the impacts of this. Because we realize that everybody paying this special tax, it’s an additional cost for them and they should have an understanding of why they’re being asked to pay for it and whether or not there’s any benefit. And with that Mr. Mayor I am happy to answer any questions that the Council has. GUPTA Thank you very much. And I would like to remind you all that this is a public hearing and before we go into the discussion mode at the dais, I would like to invite now comments, questions, or protests from audience. Any member of the audience here would like to make oral statement on this issue? Besides, we have got written protests, but any besides those, any other comments that you might like to add to the record. MARTINELLI I believe the cards, right, are relevant tonight. GUPTA Seena Samimi. SAMIMI Honorable members of the City Council, thank you for hearing our comments. My name November 20, 2017 City Council Item 1 Page 9 of 22 is Senna Samimi. I’m here on behalf of Kashiwa Fudosan America, and you have received our written comments already. I’m only going to hit some of the high points and also mention some items that were not presented in detail in our letter as we learned of them after the letter was already submitted. And I’d also just want to let you know that I’ll make myself available after the three minutes are up in case there are further questions and we have other people who are representative here as well. The point that’s not raised in detail in our written comments is that the economic expert that Kashiwa had to hire on its own, did not have a full opportunity, and did not have time to do its own independent economic analysis of the benefits or the harm to the Kashiwa parcels. Rather, it was only able to identify the flaws in the Seifel report and comment on those, but the second phase of our economic analyst is to do its own full analysis, which we haven’t had the opportunity to for that yet. And there was another report on November 15th, that was just written on November 15th by Taussig and Associates that our economic experts hasn’t even looked at yet. And I wanted to respond to one of the comments on the economic factors, were going to have some, it was mentioned that Kushman and Wakefield supports the Seifel report. We have somebody here tonight from Kushman and Wakefield that’s going to present the opposite point of view. But, and that’s the other comment that you received. Just some of the high points of our written comments, which I’m sure you guys have looked at. The additional services and facilities, that’s a legal requirement and the RMA, which is the rate and method of apportionment, that document sets forth which parcel pays what amount and on what basis. And in order for the RMA to be an accurate document and to have a proper analysis and it designates how much goes to each parcel, you have to have a proper economic analysis of that. And so yes, this is, it is a special tax, it’s not a special assessment but the law still requires that you need a reasonable basis upon which your taxing each parcel. And that reasonable basis needs to be founded in some fact somewhere. And you can’t just bring it up out nowhere and you we’ve made the contention here that the conclusion was already presupposed, that they were going to jerrymander this district to bring in Kashiwa to pay for a third of the costs essentially. And it’s very clear from the documents, and I don’t want you to take what I’ve written out of context. Please look at the emails yourself and you’ll see that the emails are very clear that it was the City that provided Seifel with the conclusions and not the other way around. I’ll make myself available for further if there’s, if the Council would like, but I know there’s other comment cards as well. GUPTA Thank you very much. MATSUMOTO I’d like to hear more, I mean this, I’d like to hear more if you have more. November 20, 2017 City Council Item 1 Page 10 of 22 GARBARINO Hear more. SAMIMI I do. Maybe just five minute if… GUPTA Let me go over the… SAMIMI Or you could do the other comment cards first. GUPTA Yeah. Let me go over the, those points may be covered by other members. Nat Williams WILLIAMS Good evening, Mayor, Vice Mayor, and City Councilmembers. Thank you for allowing me to speak to you this evening regarding the proposed CFD. My name is Nat Williams, I’m with Metro Properties. We are the asset manager for Kashiwa. So we are the landlords eyes and ears. We manage the property managers, we manage the leasing, we give them strategy, we, we’re here locally and so we operate the property on their behalf. I just have a quick, I have three quick comments I wanted to make. The new development of biotech space does not benefit our property in any way. We have a straight office building. Our tenants are accountants, lawyers, and architects and local South San Francisco people. There will be no spillover effect of new tenants coming from the buildings being built next door. They won’t get any of our tenants. We won’t get any of their tenants. There will be no upward movement in our rental rate. There will be no upward movement in our occupancy rate. There will be no movement in our cap rate. There will be, it will have no positive effect on us. The second topic, the second point I wanted to make is that the traffic is going to be much worse by virtue of all the additional employees working in these office buildings. The buildings we compete against are all adjacent to the 101 freeway. The Gateway, Bayhill, and Sierra Point. The increased traffic generated by these additional employees will increase the commute time, which will make our building less valuable and less attractive to prospective tenants. Lastly, we are being asked to pay roughly $130,000 annual fee, ith a $180,000 annual fee. We will not be able to recover this expense by higher renter occupancy. Using a six or seven cap rate, the value of our building by virtue of this action will be hurt, will be lowered, by 2½ to 3 million dollars. This is a straight deduction of value to Kashiwa’s building. The net operating income will be lower by $180,000. The way you value a building is you apply a cap rate to the NOI. Our building will be lower in value by 2½ to 3 million dollars. Thank you very much for your time. GUPTA Thank you. Scott Ynis. YNIS Thank you City Councilmembers for your service to the City of South San Francisco and November 20, 2017 City Council Item 1 Page 11 of 22 Happy Early Thanksgiving. I’d like to take this opportunity to talk about the CFD in terms of how it would impact the rental, office rental rates in the Oyster Point area, which we believe is nil, as Nat mentioned. I work for Cushman and Wakefield. I’ve been the listing agent for Oyster Point Marina Plaza for the last 25 years. It’s been a good run. I’ve seen, witnessed three cycles of, economic cycles, starting in 1990, 2008, where there were peak rentals. And the current for office space is probably in the seventh inning. The rental rates in Oyster Point have varied from a dollar in 1990, up to $5.25 per month in 2002 at the dot com bubble. Currently the market rent is $3.15 per month. And that’s actually a rise of 80 percent over the last nine years. Which is, and the reason I bring that up is that all boats have risen in this economic recovery in office space. As VC’s put more money into our economy, as their spending goes up, it creates startup companies and startup money goes to salaries and rent. So, our occupancy has been going up nicely as VC’s in Palo Alto have increased their spending. So office rents are tied to the amount of money coming into the business community and how productive those companies are. And that is the very strongest correlation. The Seifel report took a number out of a Cushman and Wakefield report about average asking rents in South San Francisco of $3.60. Well, there’s got to be a story behind that asking rate, you know, there’s going to be some buildings that will have $5 asking rates because they’re biotech and create lab. Our buildings can’t, you cannot put lab space into it because the way they are structured with 12½ floor plates between slab to slab. We can’t do biotech. So were not going to compete with the projects that’s going to go near OC, next door. We compete with the Gateway, with Bayhill, and with Brisbane. And our buildings are not as efficient as those modern buildings and you can’t eradicate these inefficiencies. You can’t put Bart next to us, you can’t put, you can’t get us closer to the freeway, and that’s been the reason our rents are $3.15. The fact that we have a park, that’s maybe a mile away would, is not going to enhance our rental rates. So I just wanted to state that for the record and thank you for your time. GUPTA Thank you very much. I’ve got Yujin Yamaai. I couldn’t pronounce the last name, I couldn’t read it. YAMAAI Yujin Yamaii. GUPTA Yamaii. YAMAAI Yamaii. GUPTA Thank you. November 20, 2017 City Council Item 1 Page 12 of 22 YAMAAI Good evening, Mayor, Vice Mayor, and City Councilmembers. Thank you for hearing our opinion. My name is Yujin Yamaai of Takinaka Corporation. I am coming here to explain my opinion with face to face. I’m working for Oyster Point Marina Plaza, which is owned by Kashiwa Fudosan America, as an owner representative. The owner of Takinaka Corporation and Kashiwa Fudosan is a very good friend. That’s why I have been assigned this load. And because the owner of Kashiwa Fudosan didn’t want the building, just the asset for just the investment without face. Kashiwa Fudosan America is doing a good job to have a good relationship with the local community and creating jobs. Our asset manager here, Nat Williams and property manager team and leasing agent Scott Ynisis doing a good job as well for a long time. We have already contributed to local community for more than 20 years. I think one of a realistic professional, Kashiwa Fudosan America is the most ideal owner of the property in the city. I can’t agree with the proposal of the City which we are discussing right now, which will reduce the value of property, of this kind of owner, which is such a good decision. GUPTA Thank you very much. I don’t have any other cards, so I would like to respect the opinion of Councilmember Matsumoto to invite Mr. Samimi once more. MATSUMOTO Thank you. SAMIMI Thank you honorable Council Members. Actually I'll just keep it short and if you guys have questions I'll respond to those. But I do have an ask that’s very clear. If you are going to take action tonight based on the record that’s in front of you, it would be totally inappropriate both legally and logically to include Kashiwa within the boundaries of the CFD. So, yes you can act tonight. But if you act tonight, you should exclude Kashiwa from the boundaries of the CFD. You can approve the CFD without Kashiwa, okay. If you want to act tonight and not include Kashiwa, or if you’re considering including Kashiwa even though the evidence shows that there isn’t any additional services being provided for those parcels, then I would ask you to first get all of the facts. So you’re alternative to acting tonight and not including Kashiwa, is to continue this matter. Allow for the economic experts to do a thorough analysis so that you have the appropriate facts in front of to make an informed decision. Which I can tell you right now, you absolutely do not have that right now. You do not have the right facts to be able to make a decision to include Kashiwa within the CFD. It’s not going to survive legally and it’s just the wrong way to move forward tonight. So, the way that we see it, is that you have two options for tonight if you’re going to act tonight. One, is to approve the CFD, excluding Kashiwa from the boundaries. And two, continue this matter. We’re not saying don’t hold November 20, 2017 City Council Item 1 Page 13 of 22 the vote eventually. We’re saying hold the vote, correct all of the legal errors that are rampant within all of the documents that we’ve seen and come up with an RMA, which is the rate and method of apportionment, that appropriately allocates the money that would be taxed for each parcel, which this current analysis doesn’t do, and it doesn’t have the appropriate facts to be able to do. I have a lot more to go into, but I would just prefer if you have specific questions, I can answer those. GUPTA Mr. Samimi, we will just, we will take your comments under the advisement and we will proceed on that basis, but I appreciate your, giving us your thoughts on the issue. SAMIMI Thank you Mayor. GUPTA Thank you. Are there any other public comments at this time? If not, I close the public hearing. So hearing is closed now and we may now consider by the Council and adopt the, and adopt the resolution of formation of community and facilities district which will establish the district and the resolution calling the special land owner election for community facilities district, which will call for the property owner vote to approve the special tax and appropriation limit for the district. So, I would like to have Council now start their discussion on the issues. Before going any further, before you start the discussion, I would like to say, as far as I am concerned, as one member of the five member of the Council here, I do feel rather rushed to have received an input which came from Kashiwa with respect to certain points being made about the CFD and some of the discussions that have been raised in front of us today, I’d like to get a little bit more time. So, I’d like to see how the Council proceeds in this matter, but I, myself would feel more comfortable with having sort of extension for us to have some time to think about some of the issues on both sides. I’m not agreeing with any issue right now without understanding. With those preliminary comments, it’s no guidance or direction to any other Councilmember but I just wanted to relay my concern. Go ahead. MATSUMOTO I normally lead off, I think, I mean I spent 37 minutes with the Assistant City Manager, City Attorney this afternoon trying to better understand all the paperwork and I came prepared to vote this evening. My question to you, is if this is continued, when would this be continued to? MATTAS If, Steve Mattas, Assistant City Attorney. If the Council were to continue it, I would recommend that you continue it to a date that is on or before November 29th. So, about a week or so. November 20, 2017 City Council Item 1 Page 14 of 22 GARBARINO Not even a week. MATSUMOTO Next week, right? ADDIEGO Yeah, I think that’s a simple ask and I’ll defer to the Mayor ……? MATSUMOTO Yeah, I won’t be here. I’m leaving on Monday night, so, just so you know. GARBARINO And just for the record, I’m leaving Wednesday morning and I won’t be back until December 1st. MATSUMOTO I won’t be back until, what, Saturday the third or whatever it is. ADDIEGO Okay. GARBARINO First of all, I have a comment about this, the lateness of receiving this response from…. You know, three o’clock in the afternoon on a Friday, you send this thing out and you expect us to read this in one day. I have a problem with that. I really do. And you had time to look at this stuff before Friday and get this out to us at three o’clock. So, I’m a little disappointed in you’re sending this out to me at three o’clock on a Friday. Thanks, for nothing. Really don’t appreciate that. And as far as carrying this over, if you can do it on a Monday, if you can get all your stuff together by Monday or Tuesday, fine and dandy. I won’t be here back until December 1st. Sorry it just hit me the wrong way when I got this. Come on. What kind of tactic is that? Three o’clock on a Friday, and you send this stuff out, and you expect us to pour through all of this. And you today sir, you hand me this today. Sorry, I’m not there. Nonsense. If you want to take a vote on it tonight, I’m ready to do that. GUPTA Okay, thank you. ADDIEGO I think I’m interested in understanding, I think Mr. Samini brought up the economic assessment by parcel for the specific benefits, and I would need to understand that to a greater degree. I must say that at our last meeting, when we informally did the math, and we realized we were moving the rental rate by about one percent, I didn’t have a problem with that. And it’s easy for me to say that sitting here I know. I’m not in the business of commercial real estate. But at the same time the numbers time tonight that it pushes the value of the property, it represses it by upwards of three million dollars, is a little bothersome. And that is a, it’s a substantial move. November 20, 2017 City Council Item 1 Page 15 of 22 MATTAS Well I would, with the Council’s consent, we do have Ms. Seifel here this evening. And I think the critique is, that was offered, was in relation to the report that Ms. Seifel prepared. So I think, if the council would like, we could have Ms. Seifel speak to the impact of the rent as well as to the benefit. One of the speakers made the assertion that there is no benefit at all to the Kashiwa property. So, if that would be helpful, I would ask the Council if you wish to hear from Ms. Seifel. NORMANDY If you’re looking at continuing it, I don’t think we need to, you know, further engage in this conversation. So, I know Carol will be out on Monday, Richard’s only certain days, I think we’ve been in contact with you or Jason as far as our schedules go. So, I mean the only day that I’m not available is on a Tuesday from seven to nine o’clock. GUPTA So it seems like majority of the Council would like to go ahead and discuss and vote tonight on this issue. GARBARINO I don’t know about that. I’m just saying I would be prepared to but… ADDIEGO I was deferring to your suggestion as a curtesy that if you wanted there to be more time to have a fuller response. NORMANDY And to allow our legal counsel to return… GUPTA Yeah, because I thought that it would be fair for everyone including me and the legal counsel and the staff to go a little bit more carefully, as well as, it seems like Kashiwa wanted also, a little additional time to do the analysis more completely, as I heard you saying that. So, in that respect I would rather make a decision when all parties have done their thinking and they can share with us before we make the decision. But on the other hand, it seems like, even if you move, continue the item for the next week, we’ll be losing one… NORMANDY We’d lose one. MATSUMOTO I’m fine with that, I mean I was for one vote before… No, I’m just teasing. I had come with a different perspective, I’m not, I don’t feel, you know, some issues I would really want to participate in the discussion. I just, this is very convoluted. And I could go either way, so I’m not… GARBARINO Well to your point, there’s no way that these folks could respond by Monday or Tuesday am I, right? You couldn’t get this stuff responded to by a Monday or Tuesday could you? November 20, 2017 City Council Item 1 Page 16 of 22 Of next week. GUPTA Are you asking…. GARBARINO Yeah, you said you needed to do another study. GUPTA Mr. Samini. GARBARINO You wanted to bring your experts in to do what Steifel did. SAMINI I can respond to both of those. First of all, honorable senior Council Member GARBARINO It’s fine. Just go on with your stuff, forget the honorable. SAMINI I wanted to explain the reason for the late submission on Friday. And I understand your frustration entirely. GARBARINO I’m glad you. SAMINI We got our, and just so that you understand, it took miss Seifel along time to prepare her economic analysis. GARBARINO Wait hold on, stop, stop, stop, stop, wait, stop. Hold it. Shhh. My question was, in two or three days, you will not have ample time to do what you suggested you need to do, yes or no? SAMINI No, we will not. GARBARINO Thank you. GARBARINO That’s all I need to hear. SAMINI Okay. GUPTA Can we move further out then next week? FUTRELL I’d defer to the City Attorney. MATTAS So, the Staff doesn’t recommend that you move further out then next week. There is a time period between the Council’s action on the resolution of formation, the resolution of election, the two items tonight. There has to be 90 days after that before you could have November 20, 2017 City Council Item 1 Page 17 of 22 the ballots cast and you count the ballots. The Council has a very full agenda already, as I understand it, in March and April of this year. And so, we were gearing towards meeting the February 28th agenda, which would give the Council opportunity to see it. I would also comment that the Seifel report has been in the possession of Kashiwa long before Wednesday and so the suggestion that they haven’t been able to do analysis. We’re not disputing that they have asked for more time. But were saying they’ve had the Seifel report for quite a while and the analysis could have been done before. If the Council wishes to continue it out, that’s obviously within your discretion to do that. Staff’s recommendation is that if you continue it, you continue it to next week. GARBARINO That’s a whole new light. How long have they had this? MATTAS Roughly, Libby’s report’s dated August 12th, I believe it is, at the latest sometime in early September. GARBARINO So they’ve had it since September? MATTAS That’s the Seifel report. GARBARINO Yeah, that’s what I’m talking about. MATTAS The point to, Council’s comment for Kashiwa, the agenda packet was posted on Wednesday evening, all the documents were in it at the time and so the actual final agenda packet, they did get on Wednesday evening. This was a special meeting, but we tried to match the kind of lead time that is typical for a City Council meeting, given that were meeting on Monday, we issued, we worked with the City Clerk’s office to issue the agenda packet earlier. But the contention that they need more time to analyze the economic analysis is really based on the Seifel report, which has been in their possession for much longer. SAMINI Can I quickly respond to that? GARBARINO Another turn in the road. GUPTA Please go ahead. SAMINI The Assistant City Attorney didn’t mention that on November 15th there was a new report by Taussig and Associates, which our economic analyst hasn’t even looked at yet. Secondly, our economic analyst didn’t get the RMA until much more recently than the November 20, 2017 City Council Item 1 Page 18 of 22 Seifel report. And the RMA is the document, I mean you have the Seifel report which is the analysis, but the RMA, which is the rate and method of apportionment, is what actually apportions the taxes to the parcels. I don’t remember the date that that was out but it certainly wasn’t available at the same time as the Seifel report. So, all of that is very, very misleading and our economic experts have not had a chance to even look at one of the reports and the RMA came after the Seifel report. So, all of that was inaccurate. GUPTA Thank you very much. ADDIEGO If I could understand, we took an initial action? This is the second? MATTAS So, on October 11th the City Council set the hearing for this evening. Your October 11th Staff Report had a draft of the RMA at that time. So, they’ve had the RMA since at least October 11th and have had the Seifel report prior to that time. ADDIEGO Okay, and so tonight was to be the vote… MATTAS Tonight is the Council’s vote on setting up the formation and then the resolution calling the election. ADDIEGO And that has to follow within 90 days. MATTAS The election has to follow within 90 days of tonight’s action. Scott, it’s a minimum of 90 days? Minimum of 90 days. ADDIEGO So if we push it out, your concern is that the election has to occur and then we sit and ratify it? Is that the third action by, or the third meeting by Council? MATTAS Yeah, we would count the votes at the meeting on February 28th. So… ADDIEGO Mr. Mattas, that doesn’t sound like an activity that takes a great amount of time. So, even if we had a heavy agenda and we were pushing it into march, isn’t it something we could. If were counting votes, so were ratifying the vote. MATTAS Yeah, it’s within the Council’s discretion. So, I agree, it would not take much time because the vote is going to be the vote, you just. It’s either in favor or its against it. GARBARINO Acknowledge it. November 20, 2017 City Council Item 1 Page 19 of 22 MATTAS Right, and so if the Council wanted to consider moving the ballot. The documents before you tonight set the ballot date as the February 28th Council meeting. We had to draft them with a date in mind. If the Council wanted to move that an additional two weeks out and have that on your agenda at your first meeting in March, that would be doable too. But we would have to adjust the documents and see. GARBARINO Let me ask you this. Is 90 days absolute? Could it be 108 days? MATTAS It’s a minimum of 90 days, it could be longer. GARBARINO Oh, okay. MATTAS Scott is there an outside… SCOTT Between 90 and 180. MATTAS It’s between 90 and 180 days, after this evening. GARBARINO Mr. Mayor, my willingness to extend this, I have complete faith in our City Attorney, or I guess our Assistant, at this point, to guide us down this path and lead us to the formation without any error. But as a courtesy, because so much has been raised. If we could respond more fully … NORMANDY Can we not hold, I mean, we all, we will all be together on December 4th to talk about OPD residential, that’s on the special agenda. Can we not postpone this to ensure that Rich and Carol are both there? Prior to the OPD presentation. MATTAS So, if the Council wanted to extend it to the December 4th meeting, you could do that and then if Kashiwa wanted to present some additional analysis based on the documents that they’ve received, they could do that in time. I do think that the Council may want to consider that that information be submitted in time for the staff to be able to respond to it. And then so that the Council gets the benefit of a complete package, with your December 4th. Practically that would mean, Mike, date on when you would need that? If they go to the December 4th meeting, when would the packet go out? FUTRELL The packet would go out on the 30th. So we’d need that maybe the 27th. MATTAS Yeah, the 27th or 28th is that doable? GUPTA Yeah I think that that’s the best we could do at this point in time and we have made the November 20, 2017 City Council Item 1 Page 20 of 22 comments that we would like to hear from you in more detail. Although you have provided us input, and we are, at least I am very much interested in following through some of those points that you are making. So that’s why I wanted to give our staff a chance to respond to those that you have already stated in your earlier report. So, I would like to again, open the doors to you if you could do it in the meantime, that’s fine. SAMINI We can try to get something in. Our economic expert isn’t here tonight. I can get him on the phone on a break if you want and see when he can give me a report by, but I can’t make a promise for something that’s going to happen in seven days. Especially over the holidays. For, I don’t know what his schedule is. And so, I can try, and I can find out for you maybe if you give me five minutes, I can give him a call and I can come back. GUPTA No, I think that we have many different things going on right now and I would recommend to the Council for their concurrence that we make December 4th meeting as the continuation meeting and whatever you can do by that time, we will take into account. Otherwise, we will assume that your two inputs, the written protests that are already in the record will be dually considered and responded to. SAMINI Thank you Mr. Mayor. GUPTA Thank you very much. But that was my request and I’d like to get, yeah go ahead. NORMANDY Jason has something. ROSENBERG No, I’d just, once you have concurrence, I’d recommend, if December 4th is the date that you’re going to continue it to. I’d recommend that the Council makes a motion to continue this item to December 4th and the location of the December 4th meeting is here so you’d want to continue to this site at seven p.m. for December 4th. Is that the right time? GUPTA Yes, I’d like to say, the attorney has stated the motion. Who’s going to make it? MATSUMOTO Wait, before we do this because I don’t have my calendar. This is the special meeting that we were going to have at seven p.m., is that correct? Because I have conflicts prior to that. FUTRELL That’s correct, seven p.m., so it should be fine. MATSUMOTO Thank you. I can do that. November 20, 2017 City Council Item 1 Page 21 of 22 GARBARINO December 4th? GUPTA So the motion has been made to continue the item on December 4th, seven p.m., meeting of the City Council. Do I hear a second? NORMANDY Second. GUPTA Could we have the vote on that motion? MARTNIELLI Councilwoman Matsumoto? MATSUMOTO Ay. MARTINELLI Mayor Gupta? GUPTA Aye. MARTINELLI Councilman Garbarino? GARBARINO Yes. And I do want to be fair, you know. This was upsetting to me, I just want to clarify something. Getting this kind of stuff on Friday is hokey to me. But I want to give you an opportunity to respond to this as well, in fairness. Okay, so yes. MARTINELLI Vice Mayor Normandy? NORMANDY Aye. MARTINELLI Councilman Addiego? ADDIEGO Yes. GUPTA Thank you very much. And we are looking forward to December 4th. November 20, 2017 City Council Item 1 Page 22 of 22 CERTIFICATION I, LISA POPE, Master Municipal Clerk/Transcriptionist, do hereby certify that the foregoing Pages 1 through 21 are a full, true and correct transcript of the proceedings of the South San Francisco City Council consideration of Item 1 at its meeting of November 20, 2017. Dated at Moorpark, California, this 14th day of May, 2018. _______________________________ LISA POPE, MMC 3062473.1