HomeMy WebLinkAboutReso 179-2021 (21-691)City of South San Francisco
- P.O. Box 711 (City Hall,
400 Grand Avenue)
South San Francisco, CA
City Council
Resolution: RES 179-2021
File Number: 21-691 Enactment Number: RES 179-2021
RESOLUTION APPROVING A THIRD AMENDMENT
TO THE PURCHASE AND SALE AGREEMENT FOR
THE PROPERTY LOCATED AT 432 BADEN AVENUE
ASSIGNING THE AGREEMENT FROM BADEN
DEVELOPMENT LLC TO FOR THE FUTURE
HOUSING, INC.; MODIFYING THE DEVELOPMENT
AT 428 AND 432 BADEN AVENUE TO A
FULLY -AFFORDABLE HOUSING PROJECT;
AMENDING THE TIME FOR CLOSE OF ESCROW;
AND AUTHORIZING THE CITY MANAGER TO
EXECUTE THE AMENDMENT.
WHEREAS, on June 29, 2011, the Legislature of the State of California ("State") adopted
Assembly Bill xl 26 ("AB 26"), which amended provisions of the State's Community Redevelopment
Law (Health and Safety Code sections 33000 et seq.) ("Dissolution Law"), pursuant to which the former
Redevelopment Agency of the City of South San Francisco ("City") was dissolved on February 1, 2012;
and
WHEREAS, the City elected to become the Successor Agency to the Redevelopment Agency
of the City of South San Francisco ("Successor Agency"); and
WHEREAS, pursuant to Health and Safety Code Section 34191.5(c)(2)(C), property shall not
be transferred to a successor agency, city, county or city and county, unless a Long Range Property
Management Plan ("LRPMP") has been approved by the Oversight Board and the California Department
of Finance ("DOF"); and
WHEREAS, in accordance with the Dissolution Law, the Successor Agency prepared a
LRPMP, which was approved by a resolution of the Oversight Board for the Successor Agency to the
Redevelopment Agency of the City of South San Francisco ("Oversight Board") on May 21, 2015, and
was approved by the DOF on October 1, 2015; and
WHEREAS, consistent with the Dissolution Law and the LRPMP, certain real properties
located in the City of South San Francisco, that were previously owned by the former Redevelopment
Agency, were transferred to the Successor Agency ("Agency Properties"); and
WHEREAS, on October 18, 2016, the City entered into an Amended and Restated Master
Agreement for Taxing Entity Compensation ("Compensation Agreement") with the various local
agencies who receive shares of property tax revenues from the former redevelopment project area
("Taxing Entities"), which provides that upon approval by the Oversight Board of the sale price, and
consistent with the LRPMP, the proceeds from the sale of any of the Agency Properties will be
distributed to the Taxing Entities in accordance with their proportionate contributions to the Real
Property Tax Trust Fund for the former Redevelopment Agency, and
City of South San Francisco Page i
File Number.' 21-691 Enactment Number.' RES 179-2021
WHEREAS, the LRPMP, prepared by the Successor Agency and approved by the Oversight
Board for the Successor Agency to the Redevelopment Agency of the City of South San Francisco
("Oversight Board"), designated 432 Baden Avenue (the "Site"), County Assessor' s Parcel Number
012-321-160 (the "Property"), to be sold, with the proceeds of the sale distributed to the taxing entities;
and
WHEREAS, to carry out the terms of the LRPMP, the Successor Agency transferred the
Agency Properties, including the Property, to the City for disposition consistent with the terms of the
LRPMP; and
WHEREAS, the Property was transferred from the Agency to the City pursuant to Grant Deeds
recorded on May 16, 2017; and
WHEREAS, Baden Development LLC ("Baden") owns the adjacent property, 428 Baden
Avenue, South San Francisco; and
WHEREAS, on September 23, 2019, Baden provided the City with a Letter of Intent ("LOI")
for the purchase of the Property for $1,100,000 ("Purchase Price"); and
WHEREAS, on February 10, 2020 the San Mateo Countywide Oversight Board ("Countywide
Oversight Board") adopted a resolution approving the sale of the Site to Baden for $1,100,000; and
WHEREAS, City and Baden entered into that certain Purchase And Sale Agreement And Joint
Escrow Instructions dated February 19, 2020; and
WHEREAS, the sale of the Property is exempt from the Surplus Land Act under Section
54234(b) of the Government Code as the Property was designated in the LRPMP for future
development, and the City and Baden executed the Purchase and Sale Agreement for sale of the Property
on February 19, 2020, pursuant to the terms of the LRPMP; and
WHEREAS, City and Baden entered into the First Amendment to the Purchase And Sale
Agreement And Joint Escrow Instructions on April 9, 2020, which extended the due diligence period and
Close of Escrow by six months; and
WHEREAS, City and Baden entered into the Second Amendment to the Purchase And Sale
Agreement And Joint Escrow Instructions (collectively, the "PSA") on December 21, 2020 which
extended the Close of Escrow period to May 17, 2021 and allowed for two 90 -day administrative
extensions; and
WHEREAS, on April 29, 2021, Baden opted to utilize one of the administrative extensions
which extended the Close of Escrow period to August 16, 2021; and
WHEREAS, on August 6, 2020, the City of South San Francisco Planning Commission
adopted Resolution 2866-2020 approving Conditional Use Permit (UP19-0005) and Design Review
(DR19-0022)for a development project proposed at the Property; and
City of South San Francisco Page 2
File Number.' 21-691
Enactment Number. RES 179-2021
WHEREAS, specifically, Resolution 2866-2020 approves a residential development,
consisting of 36 rental units utilizing the State Density Bonus Law where three of the units will be
dedicated to very low income households and be subject to an Affordable Housing Agreement, and
provide 28 parking spaces over 0.32 acres on 428 and 432 Baden Avenue (consisting of two parcels
(APNs: 012-321-170 and 012-321-160)) (collectively, the "Project Site"); and
WHEREAS, For the Future Housing, Inc. ("FTF Housing") has made an offer to Baden to
purchase the Project Site; and
WHEREAS, City, Baden, and FTF Housing wish to amend the PSA to approve the assignment
of Baden's rights and obligations under the PSA to FTF Housing; and
WHEREAS, City and FTF Housing now wish to further amend the PSA to amend the scope of
the Project from market rate to a fully -affordable housing development of thirty-six below market rate
units, and extend the Close of Escrow to January 5, 2022; and
WHEREAS, City, Baden and FTF Housing have negotiated a Third Amendment to the PSA
("Third Amendment") to memorialize the foregoing terms and other related provisions.
NOW, THEREFORE, the City Council of the City of South San Francisco does hereby resolve
as follows:
1. The Recitals set forth above are true and correct, and are incorporated herein by reference.
2. The Third Amendment, in the form attached hereto as Exhibit A and incorporated herein, is
hereby approved, and the City Manager or his designee is hereby authorized to execute it on
behalf of the City of South San Francisco; to make revisions to the Third Amendment, with
review and approval by the City Attorney, which do not materially or substantially increase
the City's obligations thereunder; to sign all documents; to make all approvals and take all
actions necessary or appropriate to carry out and implement the intent of this Resolution.
EXHIBIT A: Third Amendment to the 432 Baden Avenue Purchase and Sale Agreement
At a meeting of the City Council on 10/13/2021, a motion was made by Vice Mayor Nagales,
seconded by Councilmember Coleman, that this Resolution be approved. The motion passed.
Yes: 5 Mayor Addiego, Vice Mayor Nagales, Councilmember Nicolas, Councilmember
Coleman, and Councilmember Flores
Attest by � 4wt, lli��
R/Osa Govea Acosta, City Clerk
City of South San Francisco Page 3
Page 1
THIRD AMENDMENT TO PURCHASE AND
SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
(432 Baden Avenue, South San Francisco, California)
This Third Amendment to Purchase And Sale Agreement And Joint Escrow
Instructions (this "Amendment") is made effective as of , 2021
(“Effective Date”) by and between the City of South San Francisco, a municipal corporation
(“Seller”), Baden Development, LLC, a California limited liability company (“Baden”),
and For The Future Housing, Inc., a California corporation (“Buyer”). Seller, Baden and
Buyer are sometimes collectively referred to herein as “the Parties.” Any capitalized terms
not defined herein shall have the meaning ascribed to them in the Agreement.
RECITALS
A. Seller and Baden entered into that certain Purchase And Sale Agreement
And Joint Escrow Instructions dated February 19, 2020, as amended by that certain First
Amendment to Purchase and Sale Agreement And Joint Escrow Instructions dated April 9,
2020, and that certain Second Amendment to Purchase and Sale Agreement And Joint
Escrow Instructions dated December 21, 2020 (as amended, the “Agreement”) with respect
to that certain real property located at 432 Baden Avenue, South San Francisco, California
(Assessor’s Parcel Number 012-321-160) and other associated assets as more particularly
described in the Agreement (collectively, the “Property”);
B. As a condition to Closing, Baden and Seller agreed to execute an Affordable
Housing Agreement (referred to therein as a “Regulatory Agreement”), which, among
other things, would have required Baden to construct Below Market Rate units sufficient
in number to meet or exceed South San Francisco Municipal Code Chapter 20.380, et. al.;
C. Baden has entered into that certain Assignment and Assumption of Purchase
Agreement dated April 28, 2021 (the “Assignment”) with Buyer, attached hereto as
Exhibit A and incorporated herein, pursuant to which Baden has assigned all of its rights
and obligations under the Agreement to Buyer, and Buyer has accepted and assumed all of
Baden’s obligations under the Agreement, and Seller consents to such Assignment; and
D. Baden and Seller desire for Baden to assign its interest in the Agreement, as
amended hereby, to Buyer, and in furtherance of that objective, Baden, Buyer and Seller
desire (i) to amend the Agreement to increase the number of below market rate housing units
included in the development of the Property, (ii) to consent to the Assignment of the
Agreement, as amended hereby, to Buyer, (iii) to extend the Closing Date, and (iv) to make
such other changes as more particularly provided herein. Buyer agrees to enter into the
Agreement, as amended herein, with Seller, and assume all rights and obligations of Baden
thereunder.
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THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
(432 BADEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA)
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and incorporating all of the above as
though set forth in full herein and in consideration of all the recitals, conditions and
agreements contained herein, the parties hereby agree as follows, with amendments to
Agreement reflected as additions in double underline and deletions in strikethrough.
1. Consent to Assignment. Buyer assumes all rights and obligations of
Baden under the Agreement and Seller hereby consents to the Assignment by executing
this Amendment. All terms, covenants, conditions, restrictions and provisions of the
Agreement are hereby ratified and shall remain in full force and effect and bind Buyer,
with provisions as specifically amended herein.
2. Section 5.1 of Agreement is Amended as Follows:
Section 5.1
a) The Closing Date shall be delayed until May 17, 2021.The Closing Date shall
occur on January 5, 2022. Baden has paid Seller a fee of $15,000 for this delay of
the Closing Date.
b) The Closing Date may be further delayed if requested by Buyer with the written
consent of the City Manager acting on behalf of Seller. City Manager may delay
the Closing Date two times by up to 90 days each time. Any additional delay of
the Closing Date shall require approval of the City Council. Buyer shall pay Seller
a fee of $15,000.00 for each such additional delay of the Closing Date. If requested
by Buyer, the Closing Date may be further delayed for up to thirty days with the
written consent of the City Manager acting on behalf of Seller.
3. Section 5.2(e) (Buyer’s Conditions to Closing) of Agreement is
Amended as Follows:
Section 5.2(e) Seller shall have approved Buyer’s draft financing plan for the
development of the Property, which shall outline the sources/uses and anticipated
timeline for securing financing and shall include a proforma reasonably
acceptable to Seller and proof of construction loan necessary to reasonably
complete the development of the Property acquisition loan (the “Developer’s
First Financing Plan”). Prior to issuance of the first building permit that is
necessary to enable development of the Property, Buyer shall provide proof of
construction loan and executed construction contract(s) necessary to reasonably
complete the development of the Property (“Developer’s Second Financing
Plan”).
4. Section 5.2(h) of Agreement is Amended as Follows:
Section 5.2(h) Buyer and Seller shall have executed an Affordable Housing Regulatory
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THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
(432 BADEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA)
Agreement and Declaration of Restrictive Covenants ( “AHA”) (“Regulatory
Agreement”) for the Property on commercially reasonable terms and which shall include
the following provisions: (1) Below Market Rate units shall be constructed by Buyer to
meet or exceed South San Francisco Municipal Code Chapter 20.380 equirements
Construction of thirty-five (35) affordable dwelling units and one (1) manager unit on
the Property (hereinafter “Units”); (2) Affordability levels of the Units, as established in
the Regulatory Agreement, shall reflect the lower of the Area Median Income (“AMI”)
amounts as defined in South San Francisco Municipal Code Chapter 20.380, and
affordability levels shall be consistent with the AMI levels outlined in Regulatory
Agreement Exhibit B; (23) Seller shall approve any proposed assignment of the AHA or
disposition of the Property prior to completion of the development of the Property, and
Seller’s approval of the same, shall not be unreasonably withheld or delayed, it being
acknowledged that the City Council would need to review and approve of any such
proposed assignment. Buyer may not assign its rights and obligations under the
Regulatory Agreement without the prior written consent of Seller and the approval of the
City, as provided therein. Seller’s consent pursuant to this section, whether by the City
Council or City Manager, shall not be unreasonably withheld conditioned, or delayed.
5. Section 5.6 (Post-Closing Obligations) of Agreement is Amended as
Follows:
Section 5.6 Post-Closing Obligations. The following obligations shall survive the
Close of Escrow:
(a) Permits. Buyer shall take all necessary actions for construction
permits to be issued to Buyer for the development of the Property
within ten (10) business days following the Close of Escrow. Buyer
shall obtain building permits that are necessary to enable development
of the Property within twenty-four (24) months after the Closing Date.
Building permit issuance shall be contingent upon Seller approving
the Developer’s Second Financing Plan. If Buyer has not obtained all
necessary financing within twenty-four (24) months, Buyer has
submitted a minimum of two low income housing tax credit
applications, and City determines there is a reasonable likelihood that
necessary financing will be obtained, the City Manager may, upon
request from the Borrower, extend Buyer’s obligation to pull building
permits up to an additional twenty four (24) months. Any request for
extension by Borrower must be received by City no later than ninety
(90) days before the date upon which building permits must be
obtained. Any extension approved by the City Manager shall be in
writing.
(b) Commence Work. Buyer shall commence work to develop the
Property within forty-five (45) days of the Close of Escrow. After
Buyer has obtained the building permits, as required in subsection (a)
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THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
(432 BADEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA)
above, Buyer shall commence construction within six (6) months from
the issuance of the first building permit.
(c) Lot Merger. Buyer shall use commercially reasonable efforts to record
the merger of the Property with the Adjacent Lot within ten (10)
business days of the Close of Escrow.
(d) Parking Spaces. Buyer agrees to enter into a license agreement with
Seller after the Closing Date to authorize the continued use of the
Property as parking spaces until Buyer begins construction on the
Property. The City shall indemnify and defend Buyer from liability
associated with such use.
(e) Transfer/Sale. Buyer intends to form a single purpose entity prior to
the Closing Date. Buyer shall not transfer or sell the Property to a
different corporation, organization, entity, or individual after the
Closing Date unless Buyer has obtained prior written consent from the
City for such conveyance, which consent shall not be unreasonably
withheld, conditioned, or delayed.
5. Regulatory Agreement. Buyer and Seller hereby approve the revised Regulatory
Agreement in the form attached hereto as Exhibit B and incorporated herein. The Regulatory
Agreement, executed by the parties prior to the Closing Date, shall be substantially in the form
attached hereto as Exhibit B.
6. Prevailing Wage. Buyer and its contractors and agents shall be responsible for
determining whether California Labor Code Section 1720 et seq. and the regulations adopted pursuant
thereto ('"Prevailing Wage Laws"), shall be applicable to the Project. If Buyer, its contractors and
agents determine that Prevailing Wage Laws apply to the Project, Buyer shall submit to City a plan for
monitoring payment of prevailing wages and shall implement such plan at Buyer’s expense.
To the fullest extent permitted by law, Buyer shall indemnify, defend (with counsel approved by
City) and hold the City, and their respective elected and appointed officers, officials, employees,
agents, consultants, and contractors (collectively. the “Indemnitees") harmless from and against
all liability, loss, cost, expense (including without limitation attorneys' fees and costs of litigation),
claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order,
and damage (all of the foregoing collectively ''Claims") which directly or indirectly, in whole or
in part, are caused by, arise in connection with, result from, relate to, or are alleged to be caused
by, arise in connection with, or relate to, the payment or requirement of payment of prevailing
wages (including without limitation, all claims that may be made by contractors, subcontractors or
other third party claimants pursuant to Labor Code Sections 1726 and 1781 ), the failure to comply
with any state or federal labor laws, regulations or standards in connection with this Agreement,
including but not limited to the Prevailing Wage Laws, or any act or omission of Developer related
to this Agreement with respect to the payment or requirement of payment of prevailing wages,
whether or not any insurance policies shall have been determined to be applicable to any such
Claims. It is further agreed that the City does not and shall not waive any rights against Buyer
which it may have by reason of this indemnity and hold harmless agreement because of the
acceptance by the City, or Developer's deposit with the City of any of the insurance policies
described in this Agreement. The provisions of this Section 6 shall survive the expiration or earlier
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THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
(432 BADEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA)
termination of this Agreement and the issuance of a Certificate of Completion for the Project.
Buyer’s indemnification obligations set forth in this section shall not apply to Claims arising solely
from the gross negligence or willful misconduct of the Indemnitees.
7. General Provisions. Each party has received independent legal advice from its
attorneys with respect to the advisability of executing this Amendment and the meaning of the
provisions hereof. The provisions of this Amendment shall be construed as to the fair meaning and
not for or against any party based upon any attribution of such party as the sole source of the language
in question. Except as expressly amended pursuant to this Amendment, the terms and provisions of
the Agreement shall remain unmodified and shall continue in full force and effect, and Buyer and
Seller hereby ratify and affirm all their respective rights and obligations under the Agreement. In the
event of any conflict between this Amendment and the Agreement, this Amendment shall govern.
The terms and provisions of this Amendment, together with the Agreement, shall constitute all of
the terms and provisions to which Buyer and Seller have agreed with respect to the transaction
governed hereby, and there are no other terms and provisions, oral or written, that apply to the
Agreement and/or the Property other than as set forth in the Agreement as modified by this
Amendment. The provisions of this Amendment shall apply to, be binding upon, and inure to the
benefit of the parties hereto and to their respective successors and assigns.
8. Counterparts. This Amendment may be executed in multiple counterparts, all of
which shall constitute an original, and all of which together shall constitute a single instrument.
Counterparts of this Amendment executed and delivered by facsimile, email or other means of
electronic delivery shall constitute originals for all purposes.
SIGNATURES ON FOLLOWING PAGE
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THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
(432 BADEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA)
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
Effective Date.
SELLER:
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
BADEN:
Baden Development, LLC,
a California limited liability company
By:
Victor Lo
Title: Manager
APPROVED AS TO FORM:
By:
R. Ryan Shain
Counsel for Buyer
Page 7
THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
(432 BADEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA)
BUYER:
For The Future Housing, Inc.,
a California corporation
By:
James Rendler
Title: Vice President
3887338.1 3886128.1