HomeMy WebLinkAboutReso 80-2021 (21-325)City of South San Francisco P.O. Box 711 (City Hall,
400 Grand Avenue)
South San Francisco, CA
City Council
Resolution: RES 80-2021
File Number: 21-325 Enactment Number: RES 80-2021
RESOLUTION APPROVING THE FIRST
AMENDMENT TO THE DEVELOPMENT
AGREEMENT BETWEEN THE CITY OF SOUTH SAN
FRANCISCO AND KR OYSTER POINT DEVELOPER,
LLC.
WHEREAS, the City of South San Francisco ("City") and Oyster Point Ventures, LLC, a
Delaware limited liability company ("OPV"), entered into a Development Agreement effective March
23, 2011 (Recorder's Document No. 2011-034324) ("Development Agreement"), to facilitate the
redevelopment of that certain real property owned and to be acquired by OPV as Developer thereunder
consisting of approximately 46 acres within the City of South San Francisco, County of San Mateo, State
of California ("Property"). Capitalized terms used but not otherwise defined herein shall have the
meaning ascribed to such terms in the Development Agreement; and
WHEREAS, the City, OPV and Oyster Point Development, LLC a Delaware limited liability
company ("OPD"), entered into an Assignment and Assumption Agreement dated August 18, 2016
(County of San Mateo Recorder's Document No. 2016-082622), under which OPV assigned, and OPD
assumed, all of OPV's rights and obligations under the Development Agreement. Thereafter, City, OPD,
and Developer entered into a Consent, Assignment and Assumption of Development Agreement dated
June, 1, 2018 (County of San Mateo Recorder's Document No. 2018-043311), under which OPD
assigned, and Developer assumed, all of OPD's rights and obligations under the Development
Agreement, as amended on the date hereof; and
WHEREAS, Developer is developing the Property as a life sciences campus which is expected
to include ten research, development and office buildings, comprising a total of approximately 2.5
million gross square feet of development ("Project"). The Project is being developed in four phases; and
WHEREAS, portions of the first phase of the Project are substantially complete, including the
construction of certain public improvements described as the Clay Cap Repair in Phase ID, Phase IC
Improvements, Phase IIC Improvements, and certain of the Phase IID improvements, including the
Relocation of Sewer Pump Station No. 1 (collectively, "Improvements"), as each is more particularly
described in section 3.2 and Exhibit 3.2 to the Disposition and Development Agreement dated March 23,
2011. Developer expects to dedicate the Improvements to the City during the third and fourth quarters
of 2021. Occupancy of the first three office/research buildings in Phase I is expected by the end of 2021;
and
WHEREAS, during 2020, the Developer obtained all discretionary approvals for Phases II -N;
and
WHEREAS, Developer is ready to commence construction of Phase II of the Project and has a
building
City of South San Francisco Page 1
File Number. 21-325
Enactment Number: RES 80-2021
permit application pending with the City for rough grading and retaining walls for Phase II (B21-0334);
and
WHEREAS, Section 8.09(b) of the Development Agreement, in pertinent part, provides that
"Developer shall commence and complete the Phase IC and Phase ID improvements prior to
commencement of construction of any Phase II improvements ...;" and
WHEREAS, the City and Developer have agreed to modify the Development Agreement to
facilitate the commencement of Phase II of the Project which, in turn, will bring financial and other
benefits to the City; and
WHEREAS, because all discretionary approvals for Phases II -IV have been obtained, an
amendment of Section 8.09 of the Development Agreement that changes the trigger for commencement
of Phase II improvements qualifies as an Administrative Agreement Amendment pursuant to Section
10.02 of the Development Agreement; and
WHEREAS, the City Council now desires to amend the Development Agreement pursuant to
the terms of the First Amendment to Development Agreement, which is attached hereto as Exhibit A, and
pursuant to Government Code section 65868.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San
Francisco hereby takes the following actions:
1. The City Council finds that the environmental impacts of the Project, and numerous alternatives to
the Project and its location, have properly been reviewed and assessed by City pursuant to the California
Environmental Quality Act, Public Resources Code Section 21000 et seq.; California Code of
Regulations Title 14, Section 15000 et seq.; and City's local guidelines promulgated thereunder
(hereinafter collectively referred to as "CEQA"). On March 23, 2011, pursuant to CEQA and in
accordance with the recommendation of the Planning Commission for the City of South Francisco (the
"Planning Commission"), the City Council certified a final environmental impact report covering the
Project (the "EIR"). As required by CEQA, by Resolution No. 46-2011, the City adopted written findings
and a mitigation monitoring and reporting program (the "MMRP") prior to approving the Project. The
First Amendment makes only minor changes to the sequencing of public improvements and development
of the Project. No further review under CEQA is required for approval of the First Amendment.
2. The City Council further finds as follows:
(a) The provisions of the First Amendment are consistent with the South San Francisco General Plan
and any applicable specific plan; and
(b) The First Amendment complies with all applicable zoning, subdivision, and building regulations and
with the South San Francisco General Plan and any relevant specific plan.
3. The City Council hereby approves the First Amendment in substantially the form attached as Exhibit
A, which is hereby incorporated by reference.
City of South San Francisco Page 2
File Number: 21-325
Enactment Number. RES 80-2021
4. The City Manager, or his designee, is authorized to execute the First Amendment, and to make any
revisions, amendments, or modifications, deemed necessary to carry out the intent of this resolution
which do not materially alter or increase the City's obligations thereunder, subject to approval as to form
by the City Attorney.
BE IT FURTHER RESOLVED that this Resolution shall become effective immediately upon
its passage and adoption.
At a meeting of the City Council on 4/28/2021, a motion was made by Councilmember Nicolas,
seconded by Vice Mayor Nagales, that this Resolution be approved. The motion passed.
Yes: 5 Mayor Addiego, Vice Mayor Nagales, Councilmember Nicolas, Councilmember
Coleman, and Councilmember Flores
Attest by
Rosa GcWa Acosta, City Clerk
City of South San Francisco Page 3
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APNS: 015-010-240, -910, -920, (Space Above This Line for Recorder’s Use Only)
015-010-930, -940, -950
FIRST AMENDMENT TO DEVELOPMENT AGREEMENT
THIS FIRST AMENDMENT TO DEVELOPMENT AGREEMENT (this “Amendment”)
is made as of this ____ day of April 2021, by and between the CITY OF SOUTH SAN
FRANCISCO, a municipal corporation (the “City”), and KR OYSTER POINT DEVELOPER,
LLC, a Delaware limited liability company (“Developer”), with reference to the following facts
and circumstances (the City and Developer are sometimes referred to herein collectively as the
“Parties”, and each individually as a “Party”):
R E C I T A L S :
A. City and Oyster Point Ventures, LLC , a Delaware limited liability company
(“OPV”), entered into a Development Agreement effective March 23, 2011 (Recorder’s
Document No. 2011-034324) (“Development Agreement”), to facilitate the redevelopment of
that certain real property owned and to be acquired by OPV as Developer thereunder consisting
of approximately 46 acres within the City of South San Francisco, County of San Mateo, State of
California (“Property”). Capitalized terms used but not otherwise defined herein shall have the
meaning ascribed to such terms in the Development Agreement.
B. City, OPV and Oyster Point Development, LLC a Delaware limited liability
company (“OPD”), entered into an Assignment and Assumption Agreement dated August 18,
2016 (County of San Mateo Recorder’s Document No. 2016-082622), under which OPV
assigned, and OPD assumed, all of OPV’s rights and obligations under the Development
Agreement. Thereafter, City, OPD, and Developer entered into a Consent, Assignment and
Assumption of Development Agreement dated June, 1, 2018 (County of San Mateo Recorder’s
Document No. 2018-043311), under which OPD assigned, and Developer assumed, all of OPD’s
rights and obligations under the Development Agreement, as amended on the date hereof.
C. Developer is developing the Property as a life sciences campus which is expected
to include ten research, development and office buildings, comprising a total of approximately 2.5
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of South San Francisco
400 Grand Avenue
South San Francisco, CA
94080 Attn: City Clerk
909458.01/SD
377899.00001 -2-
million gross square feet of development (“Project”). The Project is being developed in four
phases.
D. Portions of the first phase of the Project are substantially complete, including the
construction of certain public improvements described as the Clay Cap Repair in Phase ID, Phase
IC Improvements, Phase IIC Improvements, and certain of the Phase IID improvements, including
the Relocation of Sewer Pump Station No. 1 (collectively, “Improvements”), as each is more
particularly described in section 3.2 and Exhibit 3.2 to the Disposition and Development
Agreement dated March 23, 2011. Developer expects to dedicate the Improvements to the City
during the third and fourth quarters of 2021. Occupancy of the first three office/research buildings
in Phase I is expected by the end of 2021.
E. During 2020, the Developer obtained all discretionary approvals for Phases II-IV.
F. The Developer is ready to commence construction of Phase II of the Project and
has a building permit application pending with the City for rough grading and retaining walls for
Phase II (B21-0334).
G. Section 8.09(b) of the Development Agreement, in pertinent part, provides that
“Developer shall commence and complete the Phase IC and Phase ID improvements prior to
commencement of construction of any Phase II improvements. . .”
H. City and Developer seek to modify the Development Agreement to facilitate the
commencement of Phase II of the Project which, in turn, will bring financial and other benefits to
the City.
I. Because all discretionary approvals for Phases II-IV have been obtained, an
amendment of Section 8.09 of the Development Agreement that changes the trigger for
commencement of Phase II improvements qualifies as an Administrative Agreement Amendment
pursuant to Section 10.02 of the Development Agreement.
J. The Parties now desire to amend the Development Agreement pursuant to the terms
of this Amendment and pursuant to Government Code section 65868.
A G R E E M E N T :
NOW THEREFORE, in consideration of the foregoing recitals and the mutual covenants
and agreements contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as follows.
1. Incorporation. The foregoing recitals are true and correct and are incorporated
herein by this reference and expressly made a part of this Amendment for all purposes. References
to any Recital in this Amendment shall be deemed to include this reference and incorporation.
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2. Commencement of Phase II. Section 8.09(b) of the Development Agreement is
deleted in its entirety and replaced with the following:
“Notwithstanding any provision of this Agreement or any other Applicable
Law, City and Developer expressly agree that there is no requirement that
Developer initiate or complete development of the Project or any particular
phase of the Project within any particular period of time, and City shall not
impose such a requirement on any Project Approval. The parties acknowledge
that Developer cannot at this time predict when or the rate at which phases will
be developed, or, following initiation of Phase I, the order in which phases will
be developed. Notwithstanding any provision of this Agreement, Developer
shall complete the Phase IC and Phase ID improvements prior to the issuance
of a certificate of occupancy for Phase II improvements; and shall complete
construction of the 30,000 square feet of shell space for amenities, as described
in the Transportation Demand Management Plan, prior to the earlier of
(i) issuance of a building permit for any building in the final phase of
construction, or (ii) completion of 1,800,000 square feet of development. Such
decisions depend upon numerous factors which are not within the control of
Developer, such as market orientation and demand, interest rates, competition
and other similar factors.”
3. Conflict. In the event of a conflict between terms and condition of this Amendment
and the terms and conditions of the Development Agreement, the terms and conditions of this
Amendment shall control.
4. No Further Modification. Except as set forth in this Amendment, all other terms
and provisions of the Development Agreement are hereby ratified and confirmed and shall be and
remain unmodified and in full force.
5. Recording. Developer shall cause this Amendment to be recorded in the Official
Records of San Mateo County, California, and shall promptly provide conformed copies of the
recorded Amendment to City.
6. Applicable Law/Venue. This Amendment shall be construed and enforced in
accordance with the laws of the State of California, without reference to choice of law provisions.
Any legal actions under this Amendment shall be brought only in the Superior Court of the
County of San Mateo, State of California.
7. Interpretation. All parties have been represented by counsel in the preparation and
negotiation of this Amendment, and this Amendment shall be construed according to the fair
meaning of its language. The rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not be employed in interpreting this Amendment. Unless the
context clearly requires otherwise: (a) the plural and singular numbers shall each be deemed
to include the other; (b) the masculine, feminine, and neuter genders shall each be deemed to
include the others; (c) “shall,” “will,” or “agrees” are mandatory, and “may” is permissive; (d)
“or” is not exclusive; and (e) “includes” and “including” are not limiting.
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8. Headings. Section headings in this Amendment are for convenience only and
are not intended to be used in interpreting or construing the terms, covenants or conditions of this
Amendment.
9. Severability. Except as otherwise provided herein, if any provision(s) of this
Amendment is (are) held invalid, the remainder of this Amendment shall not be affected, except
as necessarily required by the invalid provisions, and shall remain in full force and effect unless
amended or modified by mutual consent of the parties.
10. Counterparts. This Amendment may be executed in any number of counterparts,
each of which counterparts shall be deemed to be an original, and all of which counterparts, when
taken together, shall be deemed to constitute one and the same instrument.
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377899.00001 S-1
IN WITNESS WHEREOF, the Parties have entered into this Amendment as of the day and
year first above written.
CITY OF SOUTH SAN FRANCISCO
By: __________________
Mike Futrell, City Manager
ATTEST:
By:
Rosa Govea Acosta, City Clerk
APPROVED AS TO FORM:
By:
Sky Woodruff, City Attorney
[SIGNATURES CONTINUED ON NEXT PAGE.]
909458.01/SD
377899.00001 S-2
[SIGNATURE PAGE CONTINUED]
KR OYSTER POINT DEVELOPER, LLC,
a Delaware limited liability company
By: Kilroy Realty, L.P.
a Delaware limited partnership,
its Sole Member
By: Kilroy Realty Corporation,
a Maryland Corporation,
its General Partner
By:
Name:
Title:
By:
Name:
Title: