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HomeMy WebLinkAboutRDA Minutes 2009-05-13~~x sAN~ MINUTE REDEVELOPMENT AGENCY .~_. _~ CITY OF SOUTH SAN FRANCISCO _: ~gttFOR~~~' REGULAR MEETING MUNICIPAL SERVICES BUILDING COMMUNITY ROOM WEDNESDAY, MAY 13, 2009 6:30 P.M. CALL TO ORDER: 6:48 p.m. ROLL CALL: Present: Boardmembers Garbarino, Gonzalez and Mullin, Vice Chairman Addiego and Chairwoman Matsumoto. Absent: None. AGENDA REVIEW Executive Director Nagel advised that Closed Session Item No. 8 be heard before action on Administrative Business Item No. 7 was taken. PUBLIC COMMENTS None CONSENT CALENDAR 1. Motion to approve the minutes of April 8, 2009 and Apri127, 2009. Motion -Vice Chairman Addiego/Second Boardmember Garbarino: to approve Consent Calendar items no. 1 and 2. Unanimously approved by voice vote. 2. Motion to confirm the expense claims of May 13, 2009 in the amount of $1,770,588.77. Chairwoman Matsumoto requested staff define line items more clearly. Motion -Chairwoman Matsumoto/Second Boardmember Garbarino: To approve Consent Calendar item no. 2. Unanimously approved by voice vote. 3. Resolution adopting a Replacement Housing Plan for property located at 323 Miller Avenue. Director of Economic and Community Development Marty Van Duyn presented the Staff Report which detailed the history of the Project. The Redevelopment Agency ("Agency") intended to construct a parking garage on the property located at 323 Miller Avenue ("property"), which would provide significant benefit to downtown businesses ("Project"). However, the Project would result in the destruction or removal of two residential units on the Property formerly occupied by very low-income households. Director Van Duyn further stated that in accordance with Health and Safety Code Section 33413.5, the Agency had prepared a replacement housing plan for the Property (the "Replacement Housing Plan") and pursuant to the plan, the Mid Peninsula Housing Coalition will construct 106 very low- income replacement dwelling units at 636 El Camino Real; the Agency would impose affordability covenants on the replacement dwelling units to ensure they remained affordable to very low-income households for the length of time required by Health and Safety Code Section 33413. The replacement dwelling units would be completed within four (4) years of destruction or removal of the units on the Property; and the construction of the replacement dwelling units would be funded from the Agency's Low and Moderate Income Housing Fund and one or more of the following sources: City of South San Francisco Developer Housing Trust, San Mateo County Housing Endowment and Regional Trust, State of California Low-Income Housing Tax Credits or the State of California's HCD Infill Grant. Chairwoman Matsumoto questioned why it would take unti12011 for the replacements to be completed when the outcry for housing is needed to be considered. Director Van Duyn explained that tenants of said property were vacated and placed into other Agency property with moving expense paid and this plan was the permanent replacement for the two (2) destroyed units in the overall inventory, priced at the same income level. Chairwoman Matsumoto stated she understood the City was still down two (2) properties and questioned if the City could find replacements in the interim. Director Van Duyn explained the Agency would have to go out a buy other units and have tenants placed on a priority basis. Vice Chairman Addiego sought to clarify the Chairwoman's request and stated while the City's property holdings satisfied legal requirements, it currently had two (2) less units and that the Chairwoman was suggesting that better faith would be to purchase a duplex to make up for loss. Director Van Duyn expressed his understanding of the timing issue and the need for maintenance of inventory. Chairwoman Matsumoto suggested staff look into the issue and return to the Board with more information in its regards. Vice Chairman Addiego added the properties could be at any location within the City as not to cluster this type of project. Director Van Duyn stated the Agency would return to the Board with further information. Motion -Chairwoman Matsumoto/Second Boardmember Garbarino: to approve Resolution No. 10-2009. Unanimously approved by voice vote. ADMINISTRATIVE BUSINESS 4. Resolution awarding the Construction Contract to C. Overaa & Co., of Richmond, California, for the Miller Avenue Parking Structure Project in an amount not to exceed $8,421,500, appropriating $1,670,080 from Redevelopment Agency Funds for the project, amending the REGULAR REDEVELOPMENT AGENCY MEETING MAY 13, 2009 MINUTES PAGE 2 2008-2009 Capital Improvement Program Budget, and rejecting all bid protests and all bids for the bid alternatives. Director of Public Works Terry White presented the Staff Report which highlighted the particulars of the Construction Contract recommended to be awarded to C. Overaa and Co. and included background information pertaining to the contracted project. City Engineer Ray Razavi and Chris Manning of C. Overaa and Co. were on hand to respond to any questions from the Board. Boardmember Mullin questioned the photovoltaic element of the project and if waiting to bid that element would be more or less for the City expenditure. He wanted to be sure this aspect of the project was not eliminated. Director White advised the City may get grant money from the Department of Energy or Federal Stimulus Packages, which the City did not currently have. Public Works would continue to look into various funding sources for this portion of the project. Boardmember Gonzalez requested clarification as to the plans for the photovoltaic system, its planned location within the parking garage and when it would be added to the structure. City Engineer Ray Razavi explained it would be a shade structure set to go on the top level of the parking garage. That structure would be part of the photovoltaic package but separate from the construction package. The only items included in the original construction plan were the conduits as they were needed in order to run the wire to the converter(s). The converter(s) and the roof structure would be added at a later date. Engineer Razavi stated the package could go out to bid again soon. Boardmember Gonzalez questioned if the construction of the shade structure had to coincide with the photovoltaic system. He also questioned if there were any other "green" systems included in the project. Engineer Razavi stated the system was designed as one package. In regards to other "green" systems, Engineer Razavi noted that the heating and cooling system used a heat sump, which went down into the ground and conditioned the air with the temperature of the ground, which is consistent throughout the year. This type of heat exchanger used energy from Earth to cool and heat the air in the commercial portion occupancies. Director White also noted there was a good deal of fly ash in the concrete of the project. Boardmember Gonzalez requested further details about the surveying done in the project. Engineer Razavi explained the surveying issue would come before the Board in item No. 6 involving a company named Exponent Failure Analysis Associates, who had been hired by the City in the past. The company would be handling the pre, during and post construction surveying matters. Chairwoman Matsumoto questioned if C. Overaa and Co. had been interviewed. Engineer Razavi confirmed they had been interviewed. Chairwoman Matsumoto requested, for consistencies sake, the Board be informed of where future projects were advertised, if there were any pre-proposal meetings, interview committee members, etc. REGULAR REDEVELOPMENT AGENCY MEETING MAY 13, 2009 MINUTES PAGE 3 She also questioned if there was a response letter from the City to Mr. Saunders' letter included with the Staff Report. Engineer Razavi reported he interacted with Mr. Saunders via telephone and no other written correspondence was made and the issues at hand were resolved between the plumbing contractor, the Plumbers' Union and himself. Vice Chairman Addiego noted for the record the need for garage went back to mid 1970's and he was proud to be a part of Council during the time of this project. The Vice Chairman expressed his gratitude to Director White and Engineers Razavi and Bautista for bringing this resolution forward tonight. He stated his opinion this was exactly the type of infrastructure needed in South San Francisco and felt it was an historic event. Motion -Vice Chairman Addiego/Second Boardmember Gonzalez: to approve Resolution No.l 1- 2009. Unanimously approved by voice vote. Recess: 7:1.6 p.m. Meeting resumed: 8:21 p.m. 5. Resolution awarding a Construction Management Agreement for the Miller Avenue Parking Structure Project to Rudolph and Sletten, Inc. of Redwood City, CA in an amount not to exceed $280,000. Director of Public Works Terry White presented the Staff Report which highlighted the particulars of the Construction Management Agreement recommended to be awarded to Rudolph and Sletten, Inc. and included background information pertaining to the agreement. Director White explained the details of the agreement included management of the contractor/subcontractor activities, scheduling, change orders, progress reports, payments and compliance with plans and specifications. Furthermore, Director White explained Rudolph and Sletten, Inc. had extensive construction. management experience with other public agencies such as the City of San Jose, the City of Mountain View and had previously worked closely with Watry Design, Inc., the architect for the Miller Avenue Parking Structure, on similar projects. Doug Collins of Rudolph and Sletten, Inc. was on hand to respond to questions from the Board. Director White also clarified the differences in the Staff Report requirements which pertained to Construction contracts and Professional Services contracts in order to address the Chairwoman's previously stated concern regarding Staff Report consistency. Chairwoman Matsumoto thanked Director White for the clarification. Motion -Vice Chairman Addiego/Second Boardmember Gonzalez: to approve Resolution No.12- 2009. Unanimously approved by voice vote. 6. Resolution awarding a Consulting Services Agreement to Exponent Failure Analysis Associates for the pre and post construction surveying for the Miller Avenue Parking Structure Project in an amount not to exceed $110,000. REGULAR REDEVELOPMENT AGENCY MEETING MAY 13, 2009 MINUTES PAGE 4 Director of Public Works Terry White presented the Staff Report which highlighted the particulars of the Consulting Services Agreement recommended to be awarded to Exponent Failure Analysis Associates and included background information pertaining to the agreement. Chairwoman Matsumoto requested staff post information and outreach which identified apoint/contact person to address concerns from the surrounding community. Motion -Boardmember Gonzalez/Second Boardmember Garbarino: to approve Resolution No.13- 2009. Unanimously approved by voice vote. Recess: 8:30 p.m. Meeting resumed: 8:40 p.m. CLOSED SESSION 8. Property Negotiations. (Pursuant to Government Code § 54956.8) Property under negotiation: City Owned Property at Oyster Point Marina (APN #'s 015-010-240, 015-010-260, 015-010-270, 015-010-500, 015-010-600, 015-010-630, 015-190-170, 015-190-190) Agency Negotiator: Marty Van Duyn Negotiating Parties: City of South San Francisco, South San Francisco Redevelopment Agency, and Oyster Point Ventures, LLC and Shorenstein/SKS. Under Negotiation: Price and terms for conveyance of property. Closed Session Opened: 8:40 p.m. Open Session Resumed: 8:58 p.m. Report out of Closed Session: Direction given. No reportable action taken. 7. Resolution approving Memorandum of Understanding with Oyster Point Ventures LLC and Resolution approving MOU with the San Mateo County Harbor District related to potential development of Oyster Point Business Park and Oyster Point Marina. Economic and Community Development Director, Marty Van Duyn presented the Staff Report and noted the presentation covered both Item No.7 of Redevelopment Agenda and Item No. 5 of the City Council Agenda. The items would be covered together but voted on as separate actions. Director Van Duyn gave a PowerPoint presentation which detailed the history and outline of the Oyster Point Marina Project plans (Project). Oyster Point Ventures LLC, a joint venture between Shorenstein Properties and SKS Investments LLC ("S/SKS"), had recently purchased the Oyster Point Business Park, which is adjacent to the Oyster Point Marina, for the purpose of developing the Oyster Point Business Park into a modern research and development life sciences campus. The concept plan also included a Ferry Village/Oyster Point Marina, recreations/open spaced areas, major landscaping improvements, commercial uses, a hotel and new street configuration. The Project would be built in phases and in order to initiate development of the Infrastructure improvements, and required an investment of $16,640,908 from the Redevelopment Agency. Director Van Duyn further explained City staff and S/SKS had since negotiated and developed non- binding Memorandums of Understanding that established a mutual understanding among the City, REGULAR REDEVELOPMENT AGENCY MEETING MAY 13, 2009 MINUTES PAGE 5 Agency and S/SKS regarding (1) a description of the Project to undertake the required analysis by the City and Agency pursuant to the California Environmental Quality Act ("CEQA"), (2) the feasibility of the project and allocation of estimated costs among the parties, and (3) the necessary planning activities, entitlements and agreements to implement the Project. The MOU's were preliminary, non- binding agreements that would not commit the City to a definite course of action or foreclose consideration of alternatives; and certification of environmental review pursuant to CEQA would be required prior approval of any land use entitlements for the Project; therefore, execution of the MOU's was not an "approval" of a "project," as those terms are defined in CEQA. Chairwoman Matsumoto requested clarification as to property ownership reflected in the report and if City owned property was the key to this project. She also questioned the occupancy and boat slips on S/SKS portions of property, the origin of the $16.64 million dollars, the debt involved, and whether or not the money could be used to fund other redevelopment projects. Director Van Duyn used an electronic highlighter in response to property ownership and activity for future development and concurred that City owned property was a key element to the Project. He further stated that occupancy had an interesting mix of land use with unknown vacancies and boat slips. In response to the origin of the funds, Director Van Duyn explained funds were borrowed against existing bond funds from the four (4) merged redevelopment areas with a current debt of $24 million. Out of that, $19 million. was committed to several projects including the parking garage, train station, downtown real estate acquisition and sewer fund loans. $5.1 million was uncommitted. He further explained that money could be used to fund any other Redevelopment projects which could include the El Camino Corridor and Downtown Central projects. The presentation continued with the review of the Ferry village plans, public portion of development locations, landscaping locations, and intended improvements of the bay trail. Director Van Duyn then reviewed the Land Exchange Agreement, which included the conveyance of the King's leases to the city, valued at $7.5 million. It was noted that Shorenstein would undertake environmental remediation for the City with an estimated investment of $17.8 million and pay the City $4.5 million. The exchange could not occur until S/SKS commenced construction. The Development Agreement and Owner Participation Agreement terms were also reviewed. Chairwoman Matsumoto questioned if the City could purchase the King leases if so desired. Director Van Duyn stated the City had. the option but not the obligation to purchase the leases and the City retained certain rights, such as acquiring King's leases, if S/SKS does not perform within the 10 years and deliver a commitment to complete and construct Phase 1. A timeline for Project milestones was presented. Director Van Duyn then explained the Memorandum of Understanding (MOU) with the Harbor District. The purpose of the MOU was to establish anon-binding mutual understanding among the City, Redevelopment Agency and the Harbor District regarding: (1) potential and anticipated fiscal impacts of the Project to the Harbor District, (2) ongoing operations and management of the Marina, and (3) the necessary planning activities to implement the Project and redevelop and operate the Marina. A cap for the City's contributions to the District was reported to be an estimated $30 million. Should hotel or commercial space be developed at the site, the Harbor District would share in the financial participation along with the City. Transient Occupancy Tax (TOT) and sales tax would be revenue for the City, which it could choose to share with the District or, as in the previous hotel proposal, a gross revenue exaction amount would be targeted as revenue for the District. REGULAR REDEVELOPMENT AGENCY MEETING MAY 13, 2009 MINUTES PAGE 6 Chairwoman Matsumoto questioned who would be responsible for the development of a hotel at the site and if TOT had to be shared with the Harbor District. Director Van Duyn responded that the Redevelopment Agency would provide seed money and most likely take the lead in the development of a hotel, but consultations would be made with the District. However, unless the current agreement under the JPA was amended, the Harbor District retained the leasing authority for the properties. Under the agreement, TOT was merely given as a potential source of District revenue. It could be left untouched and revenues for the Harbor District could instead be provided from other areas such as tax increment funds or an adjustment of the gross rent. Chairwoman Matsumoto noted this was land owned by the City. She questioned the revenue generated for Harbor District since they took over the management. She also questioned if the City shared any of the boat slips/rentals with the District. Director Van Duyn stated prior to the area being a redevelopment area three (3) years ago, there were no funds that went directly to the city. Capitol borrowing was being paid back by the District through other agencies and had no relationship to paying the City. As an offshoot, the City received sales taxes for the general fund. However, due to the low occurrence of retail in the area, little sales tax was generated. Boat slips/rentals funds went directly to the Harbor District, which they used for maintenance operations. Vice Chairman Addiego explained prior to the Harbor District's involvement with Oyster Point Marina, it was an expense to the City. Director Van Duyn continued the presentation and stated the next step would be for the City to consent to the assignment of the King leases to S/SKS. Future analysis and infrastructure cost studies would be done as currently viewed spreadsheets were the best estimate available for review. These studies would take place before the City committed to any binding agreements. There were no foreseen major discrepancies between the numbers reported now and the numbers expected. Director Van Duyn stated S/SKS would undertake improvements to the King leaseholds, a major element of the negotiation as facilities had been unimproved upon for some time. S/SKS had assured the City it had planned to bring properties into better standards and $1.4 million dollars of improvements were to be immediate. Director Van Duyn ended the presentation and asked the Board if there were any further questions. Boardmember Garbarino questioned the status of the fitness center previously approved by the Board. Director Van Duyn responded it was still a valid development, the lease existed, and the applicant had desired to proceed. He further explained that several years may go by before those buildings would be raised but the applicant understood. He did not feel the project was in jeopardy. Vice Chairman Addiego questioned if the $1.4 million in improvements was to be applied to the buildings clustered around the beach area, when the soonest opportunity for the buildings to come down would be and whether or not the timeframe would be determined by the Board. Director Van Duyn confirmed the referenced buildings would be affected, as well as, the fuel docking REGULAR REDEVELOPMENT AGENCY MEETING MAY 13, 2009 MINUTES PAGE 7 station, which was currently not in use. This could not happen until entitlements were completed, finances were assured and a construction contract was initiated. After all these elements were completed, the time frame would be mutually agreed upon between the City and S/SKS. Boardmember Gonzalez requested clarification of the stated 2013 projected commencement date. Director Van Duyn clarified the 2013 date as the projected best effort schedule. City Attorney Steve Mattas made a point of clarification as to the projected date being an optimistic schedule. Director Van Duyn concurred with Attorney Mattas and further stated that it would be four to five years, optimistically. Chairwoman Matsumoto questioned if the concentration would be on the office buildings being the first project built and when the projected ribbon cutting date would take place. Also questioned was the projected date of groundbreaking on the Ferry Village, retail spaces and hotel. Director Van Duyn responded the life science and office facilities would be the first to commence and the earliest for groundbreaking for just the infrastructure would be four (4) years out and six (6) years out to have the pads ready to begin to solicit the interest of retailers and hotels. Chairwoman Matsumoto expressed concern over the setback in scheduling that has already occurred in regards to the Ferry Village and the Water Emergency Transportation Authority (WETA) contract and questioned WETA's contractual. obligation if the ferry ridership was not there. Director Van Duyn clarified that the name "Ferry" was there to help stimulate the relationship between where the village, the activity and the ferry might benefit. If the ferry were not there, he felt the attraction to that location, as far as hotels and retailers were concerned, would not be diminished and that financing was not tied to the performance of the ferry. Chairwoman Matsumoto questioned how much money the City had to borrow to meet its financial obligations. Director Van Duyn stated the City had the opportunity to sell over $50 million more in bonds. For this particular Project the amount would be $16.6 million, to be paid back out of the expected revenues generated out of the completed Project. Boardmember Gonzalez questioned when the The Board might receive more information pertaining to the Project and could the Board request more information from the Staff within the next six (6) months. Director Van Duyn responded that Staff intended to come back to the Board periodically with progress reports, which would not necessarily require any action. Also, the Board could request Staff to come back at anytime, within six (6) months if so desired. Attorney Mattas noted most likely, the Board would be seeing documents consenting to a joinder pertaining to the King leases. Formal documents would be presented for action at the next meeting. REGULAR REDEVELOPMENT AGENCY MEETING MAY 13, 2009 MINUTES PAGE 8 With a current shortfall of $2 million taken into consideration, Chairwoman Matsumoto expressed a concern over the potential of $3 million being needed from the general fund. She questioned if the fund was responsible for public safety and grounds maintenance issues and if so, would the money not be better spent elsewhere, with a quicker return and not having to be shared with the Harbor District Director Van Duyn expressed his understanding and noted the concern as a critical factor for reducing time frames of development in order to generate revenue needed for other redevelopment projects. However, he stated that the Project was along-term investment as compared to the other developments being mid-range and immediate investment areas and that he felt confidant in this type of staging. He further stated money would still be available for other projects throughout the City even though a substantial amount of Redevelopment money was being put up. It was further stated anticipated revenues of $1.6 million generated from property taxes, TOT, vehicle in lieu fees, and sales tax would go into the general fund. Director Van Duyn stated the Board had the right to decide if funding would be better used for Capital Improvement Projects elsewhere, but felt the purpose of Redevelopment was to reinvest money into development areas. He clarified funding for public safety and maintenance services would likely be out of the general fund and further details would need to be discussed with the Board at a future date as this issue may be a key in how terms were negotiated. Vice Chairman Addiego made a point of clarification as to how much effort would be needed to generate $1.6 million into the general operating fund and noted that $1 billion dollars in improvements to the property tax-rolls would be needed generate that type of money. He further stated though he sees the complexity of the project, he also sees the big picture of the re-creation of Oyster Point, which cannot happen without $16 million. Boardmember Garbarino concurred with the Vice Chairman and saw the Project as the next step. Furthermore, he felt the City could not afford to pass up this opportunity. Boardmember Mullin applauded staff for their many hours of work. He expressed he understood the uncertainties but felt the Project would solidify the City's position as a national leader in Life Sciences. Boardmember Mullin stated the City should seize the opportunity and show confidence in the community's ability to generate private investment. He further stated his confidence in the ability to balance the Project with other development projects on the West side. While he agreed there was a risk, he also felt it was a good investment. Boardmember Gonzalez stated during his nine (9) years on the Board he had little expectations for Oyster Point, but with the current Project he had hope and this was why he was supporting the effort. In regards to the ferries, he felt they would come to fruition and the City had a responsibility to help the ferries succeed as they went hand in hand with the development. Boardmember Gonzalez offered his support for the Project. Chairwoman Matsumoto stated she felt the Project was too speculative and would prefer S/SKS develop their currently owned property and for the City to reap the benefits. For all of her previous stated reasons, she was not comfortable in giving her support to the Project. Motion -Boardmember Gonzalez/2nd Vice Chairman Addiego: to approve Resolution No. 14-2009 The motion was approved by the following roll call vote: AYES: Boardmembers Garbarino, Gonzalez and Mullin, Vice Chairman Addiego. NOES: Chairwoman Matsumoto. ABSTAIN: None. ABSENT: None. REGULAR REDEVELOPMENT AGENCY MEETING MAY 13, 2009 MINUTES PAGE 9 Motion -Boardmember Gonzalez/2nd Boardmember Garbarino: To approve Resolution No. 15-2009. The motion was approved by the following roll call vote: AYES: Boardmembers Garbarino, Gonzalez and Mullin, Vice Chairman Addiego. NOES: Chairwoman Matsumoto. ABSTAIN: None. ABSENT: None. CLOSED SESSION 9. Property Negotiations. (Pursuant to Government Code § 54956.8) Property: 415-417 Grand Avenue. Company Negotiator: Dalal Metwalli, SSF RDA. Agency Negotiator: Marty Van Duyn. Closed Session Opened: 10:25 p.m. Open Session Resumed: 11:40 p.m. Report out of Closed Session: Direction given, no reportable action taken. 10. Property Negotiations. (Pursuant to Government Code § 54956.8) Property: 938 Linden Avenue. Company Negotiator: 15SSF DEV, LLC. Agency Negotiator: Marty Van Duyn. Not Heard. 11. Property Negotiations. (Pursuant to Government Code § 54956.8) Property: 344 Grand Avenue. Company Negotiator: St. Vincent de Paul and SSF RDA. Agency Negotiator: Marty Van Duyn. Not Heard. ADJOURNMENT Being no further business, Chairwoman Matsumoto adjourned the meeting at 11:40 p.m. Submitted by: A Anna M. Hernandez, Deputy Clerk City of South San Francisco Oman City of South San Francisco REGULAR REDEVELOPMENT AGENCY MEETING MINUTES MAY 13, 2009 PAGE 10