Loading...
HomeMy WebLinkAbout2011-03-23 e-packet SPECIAL MEETING oa cx s,�, CITY COUNCIL c - = OF THE H - '! ..1E. CITY OF SOUTH SAN FRANCISCO J O �, - P.O. Box 711 (City Hall, 400 Grand Avenue) c9tIFOR South San Francisco, California 94083 Meeting to be held at: MUNICIPAL SERVICES BUILDING COMMUNITY ROOM 33 ARROYO DRIVE SOUTH SAN FRANCISCO, CA WEDNESDAY, MARCH 23, 2011 6:31 P.M. NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of California, the City Council of the City of South San Francisco will hold a Special Meeting on Wednesday, the 23rd day of March, 2011, at 6:31 p.m., in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Purpose of the meeting: 1. Call to Order. 2. Roll Call. 3. Agenda Review. 4. Public Comments — comments are limited to items on the Special Meeting Agenda. 5. Closed Session: Conference with Labor Negotiators. (Pursuant to Government Code § 54957.6) Agency designated representative: Kathy Mount Employee organizations: AFSCME, Local 829, AFL -CIO Confidential Unit, Teamsters Local 856 International Association of Firefighters, Local 1507 Mid - management Unit International Union of Operating Engineers, Local 39 South San Francisco Police Association Public Safety Managers Executive Management Unit. 6. Closed Session: Conference with Legal Counsel: Existing Litigation (Pursuant to Government Code Section 54956.9(a).) Gerald Bonomi v. South San Francisco. 7. Closed Session: Conference with Legal Counsel: Existing Litigation (Pursuant to Government Code Section 54956.9(a).) Norman Payne v. South San Francisco. 8. Closed Session: Conference with Real Property Negotiators (Pursuant to Government Code Section 54956.8) Properties: APN 015 -010 -600, 015- 190 -190, 015 -010 -260, 015- 010 -060 (Commonly known as the King Leases at Oyster Point Marina) Agency Negotiator: Marty Van Duyn Parties: South San Francisco, S /SKS, San Mateo County Harbor District Under Negotiation: Terms for acquisition of property and leases. 9. Closed Session: Real Property Negotiations (Pursuant to Government Code Section 54956.8) Properties: 17.9 acres near the intersection of Oyster Point Boulevard, Marina Drive and Gull Road Agency Negotiator: Marty Van Duyn Parties Oyster Point Ventures, LLC, City of South San Francisco and South San Francisco Redevelopment Agency 10. Adjournment. -'` -rl tty of South San Francisco SPECIAL CITY COUNCIL MEETING MARCH 23, 2011 AGENDA PAGE 2 0 , err c dZIFOO Staff Report DATE: March 23, 2011 TO: Honorable Mayor and City Council Honorable Chair and Members of the Redevelopment Agency Board FROM: Marty Van Duyn, Assistant City Manager SUBJECT: RESOLUTIONS APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO AND OYSTER POINT VENTURES, LLC CASE NO. P09 -0085; DDA11 -0001 RECOMMENDATION It is recommended that: (1) The City Council adopt a Resolution approving the disposition of certain real property located at the Oyster Point Marina Area; approving the disposition of such property pursuant to a Disposition and Development Agreement to Oyster Point Ventures LLC; approving the report required in connection with such disposition by Health and Safety Code Section 33433; adopting findings in connection with the foregoing transactions; consenting to the Redevelopment Agency executing a Disposition and Development Agreement; approving and authorizing the execution of a Disposition and Development Agreement for development of the property; authorizing the City Manager to execute such Agreement and /or other documents related to the Project; and (2) The Redevelopment Agency adopt a Resolution making findings and certifying that the Redevelopment Agency has reviewed and considered the Environmental Impact Report including a statement of overriding considerations and mitigation monitoring and reporting program for the Oyster Point Specific Plan and Phase I Project and related approvals; and (3) The Redevelopment Agency adopt a Resolution approving the acquisition of certain real property located at the Oyster Point Marina Area; approving the disposition of such property pursuant to a Disposition and Development Agreement to Oyster Point Ventures, LLC; approving the report required in connection with such disposition by Health and Safety Code Section 33433; adopting findings in connection with the foregoing transactions. BACKGROUND As has been discussed in related staff reports, the Oyster Point Specific Plan and Phase I Project proposes a public - private partnership with the goal of redeveloping an approximately 82 -acre Project Site consisting of the Oyster Point Business Park and Oyster Point Marina Property to support new Staff Report Subject: Oyster Point DDA Resolutions Date: March 23, 2011 Page 2 of 5 office /research and development (office /R &D) facilities, new local and regional serving parks and open space, future hotel uses, and a rejuvenated marina area. The Project Site currently consists of parcels owned by the City of South San Francisco and Oyster Point Ventures, LLC, a joint venture between Shorenstein and SKS Investments ( "Developer "). Among the entitlements sought by the Developer, is a Disposition and Development Agreement ( "DDA ") to address the land transfer and other funding arrangements associated with the South San Francisco Redevelopment Agency. This staff report discusses the terms, conditions, and obligations set forth in the DDA that has been negotiated between the Parties and is now proposed for approval. DISCUSSION The City currently owns property located within the Project Area, commonly known as the Oyster Point Marina Property (the "Marina Property "). Developer currently owns property commonly known as the Oyster Point Business Park, (the "Business Park Property "), and has a long -term leasehold interest in a portion of the Marina Property (the "King Lease Property "). The underlying fee interest in the King Lease Property is owned by the City. Developer and Agency seek development of the Business Park Property and the Marina Property consistent with the Redevelopment Plan, the Oyster Point Specific Plan, and the Oyster Point Phase I Precise Plan (the "Precise Plan "), whereby Developer will undertake the construction of certain public improvements, and the Agency and the Developer will each provide certain financing to assist in the development of such public improvements, as more particularly set forth in the DDA. To facilitate development of the Project, the Parties have proposed a property exchange, whereby, after execution of the DDA, the Agency would acquire from City certain, indentified portions of the Marina Property, consisting of approximately 17.90 acres, as described in Exhibit B to the DDA (the "Conveyed Property "). Upon satisfaction of certain conditions precedent, the Agency would then convey the Conveyed Property to Developer. As part of the consideration for Developer's acquisition of the Conveyed Property, Developer would terminate the King Leases that affect any portion of the Conveyed Property concurrent with Developer's acquisition of the Conveyed. Property. All other King Leases shall be assigned by the Developer to the Agency, along with all development rights Developer possesses pursuant thereto. Developer would also make a cash payment to the Agency in the amount of $4.5 million, payable in two equal installments, as described in more detail below. The property exchange and development of the Project necessitate a number of terms, conditions, and agreements, all as set forth in the DDA proposed for approval. The major deal points, terms, and obligations are summarized below. Property Exchange At the time that the Parties are ready to initiate construction of the Phase I Improvements, and provided the other conditions of the DDA have been satisfied, the Developer will assign its interest in the King Leases to the City, and the City will convey to Developer fee title to certain Conveyed Property, that consists of the beach/park area, and the area on both sides of the re- aligned Oyster Point Boulevard, as described in Exhibits A -2 and B to the DDA. (See also DDA, § 4.1.) As consideration in addition to the King Leases, Developer will pay to the City the sum of $4,500,000, payable in two equal installments at the close of escrow and on the date Developer receives the first building permit for a building within Phase Staff Report Subject: Oyster Point DDA Resolutions Date: March 23, 2011 Page 3 of 5 IIID, respectively. (§ 4.3.) The DDA sets forth the procedures for conveyance, including escrow instructions, and allocates the costs of escrow and closing to Developer, except for any title insurance that the City elects to purchase. ( §§ 4.4 -4.6.) The Property Exchange is subject to certain conditions precedent, as articulated in the DDA, including among others, Developer's good standing, Developer's evidence of financing, approval of the contract documents for development of the public improvements, Developer having obtained all City discretionary permits and entitlements, Developer having paid all fees due, the condition of the Conveyed Property remaining substantially the same as it was on the day of closing, and agreement between the Parties on the form of temporary and permanent easement agreements to be recorded against the Conveyed Property. (§ 4.2.) With respect to the Conveyed Property, the Agency is entitled to all income produced from the operation of the Conveyed Property prior to Closing Date, and is responsible for all expenses allocable to that period, except that any portion of the Conveyed Property that is subject to the King Leases prior to Closing, shall be governed by the terms of those Leases. Development of Phase I Project The Project, as described in the DDA consists of the "Redevelopment Project," which includes both the pubic and private Phase I improvements, the "Developer Project," which includes the office /R &D buildings, and the "City /Agency Project," which could include a "Ferry Village" consisting of retail, commercial, restaurant and hotel uses, public open space and amenities related to the existing marina and future ferry terminal. Development of the Project will occur in phases. As articulated in the DDA, the first phase of improvements to be constructed on the City Property (the "Phase IC Improvements ") includes: streets and utilities (including without limitation, grading, subgrade, base, paving, curb, street lights, stormwater, sewer, and common trenching) at both the Oyster Point Boulevard /Marina Boulevard area ( "Hub ") and extending east across the Marina; repair of and /or upgrade to the clay cap landfill cover; reconfiguration of existing parking areas; grading and construction of open space recreation areas; demolition and grading at the future hotel site; landscaping of the beach/park area; landscaping an other improvements including portions of the Bay Trail, Palm Promenade, and public restrooms. The first phase of improvements to be constructed on the Developer's Property and property to be conveyed includes: repair of the landfill clay cap; environmental remediation of the area identified as Sump 1; installation of methane control and monitoring systems; relocation of refuse; and development of office/R &D buildings. Under the express terms of the DDA, Developer agrees to develop the Project in accordance with the terms and conditions of the DDA and other entitlements for the Project, including without limitation the General Plan Amendments, Specific Plan, Specific Plan Appendix and Design Guidelines, Phase 1 Precise Plan, Development Agreement, and Conditions of Approval, as well as the approved construction plans and contract documents. Upon completion of the landscaping of the beach/park area, the DDA obligates the Developer and City to enter into a separate agreement by which Developer will dedicate the beach/park area to the City. Improvement Costs and Cost Allocations The Parties have estimated the cost of the Phase IC Improvements and the Phase ID Improvements for the Redevelopment Project identified above, and allocated the costs, as described in the DDA. The Staff Report Subject: Oyster Point DDA Resolutions Date: March 23, 2011 Page 4 of 5 Developer is solely responsible for the costs of the Phase ID improvements. The Phase IC Improvements, which total approximately $35.6 million, are split between the Developer and the Agency, with the Agency's contribution totaling $18,399,460. The DDA also sets forth which Party is responsible for cost overruns and which Party is entitled to retain cost savings for each of the improvements. (See Exhibit 3.4.1), though with respect to improvements contemplated as part of the streets and utilities at the Hub, the Parties have agreed to apply any cost savings to construction of the Phase IIC Improvements, in the following order of priority: clay cap repair in Phase IIC, new sewer pump station, any other Phase IIC Improvements, at the Agency's discretion. (§ 3.4.3.) Upon execution of the DDA, the Agency is required to set aside its funding requirement into a separate account, and may not withdraw funds except in the amounts and at the times necessary to fulfill the Agency's obligation under the DDA. (§ 3.4.4.) Environmental Remediation The Parties anticipate that development of the Project will require environmental remediation and related geotechnical work, including cleanup of sumps on the Marina Property, a methane monitoring system, relocation of refuse, and repair and /or replacement of the clay cap covering the landfill. The Parties agree to allocate costs for these remediation activities. Right of First Refusal Property In recognition of the Parties' desire to develop the Project Site with compatible uses and designs, the DDA grants the Developer a "right of first refusal" applicable to the flexible use open space parcel and the future hotel site. ( §2.5.) Under the terms of the DDA, if prior to build -out of the Developer's Project or termination of the DDA, the City or Agency enter into a contract with a third party to sell either the flexible use open space parcel or the future hotel site or any portion of either site, the City or Agency shall provide Developer with a copy of the contract for sale, and Developer shall have 10 business days to elect to purchase the property at the same price and same terms and conditions agreed to by the third party. The Developer's right of first refusal also applies to any long -term ground lease (i.e., lease for at least 35 years) of the flexible use open space parcel or the future hotel site. ENVIRONMENTAL REVIEW In accordance with the California Environmental Quality Act (Public Resources Code, §§ 21000, et seq., "CEQA ") and the CEQA Guidelines, the City's environmental consultant prepared and circulated for public review a Draft Environmental Impact Report (DEIR) that analyzed the environmental impacts of the Project, including the Oyster Point Specific Plan and Phase I Project, proposed mitigation measures, where feasible, for potentially significant impacts, and evaluated alternatives to the proposed Project. The DEIR evaluated the activities and improvements discussed in the DDA, and further indicated that the EIR was intended to be used for approval of a Disposition and Development Agreement. The DEIR was circulated on January 25, 2011 for a forty -five day review period; the comment period closed on March 10, 2011. Though comments were received on the DEIR, none of the comments raised a significant environmental issues with the DEIR's analysis. Written responses were prepared to comments received during the comment period, and both comments and responses, along with minor revisions to the DEIR and a Mitigation Monitoring and Reporting Program, were including in a Final EIR (FEIR). By separate Staff Report Subject: Oyster Point DDA Resolutions Date: March 23, 2011 Page 5 of 5 action, staff has recommended that the City Council make appropriate findings and certify the EIR for the Project. The Redevelopment Agency is considered a responsible agency, and staff has recommended that the Agency make appropriate CEQA findings by separate Resolution. CONCLUSION Staff recommends that: (1) The City Council adopt a Resolution approving the disposition of certain real property located at the Oyster Point Marina Area; approving the disposition of such property pursuant to a Disposition and Development Agreement to Oyster Point Ventures LLC; approving the report required in connection with such disposition by Health and Safety Code Section 33433; adopting findings in connection with the foregoing transactions; consenting to the Redevelopment Agency executing a Disposition and Development Agreement; approving and authorizing the execution of a Disposition and Development Agreement for development of the property; authorizing the City Manager to execute such Agreement and /or other documents related to the Project; and (2) The Redevelopment Agency adopt a Resolution making findings and certifying that the Redevelopment Agency has reviewed and considered the Environmental Impact Report including a statement of overriding considerations and mitigation monitoring and reporting program for the Oyster Point Specific Plan and Phase I Project and related approvals; and (3) The Redevelopment Agency adopt a Resolution approving the acquisition of certain real property located at the Oyster Point Marina Area; approving the disposition of such property pursuant to a Disposition and Development Agreement to Oyster Point Ventures, LLC; approving the report required in connection with such disposition by Health and Safety Code Section 33433; adopting findings in connection with the foregoing transactions. By: , By: c ti ;._ , ( Marty Van Duyn arry Nagel Assistant City Manage City Manager Executive Director Attachments: City Resolution Agency Resolution 1611860.1