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HomeMy WebLinkAbout2012-07-10 e-packetS''''F REGULAR MEETING L C00 oy OVERSIGHT BOARD FOR THE J 'LrFa�" °o SUCCESSOR AGENCY TO THE CITY OF SOUTH SAN FRANCISCO REDEVELOPMENT AGENCY P.O. Box 711 (City Hall, 400 'grand Avenue) South San Francisco, California 94083 CITY HALL LARGE CONFERENCE ROOM, TOP FLOOR 400 GRAND AVENUE TUESDAY, JU Y 10, 2012 2:00 P.M. You are invited to offer your suggestions. In order that you may know our method of conducting Board business, we proceed as follows: The regular meetings of the South San Francisco Oversight Board for the Successor Agency to the City of South San Francisco Red vel pment Agency are held on the second Tuesday of each month at 2:00 p.m. in the in the Large Conference room, Top Floor at City Hall, 400 Grand Avenue, South San Francisco, California. In accordance with California Gov=ent Code Section 5 495 .5, any writing or document that is a public record, relates to an open session agenda item, and is distributed less than 72 hours prior to a regular meeting will be made available for public inspection in the City Clerk's Office located at City Hail. If, however, the document or writing is not distributed until the regular meeting to which it relates, then the document or writing will be made available to the public, at the location of the meeting, as listed on this agenda. The address of City Hall is 400 Grand Avenue, South San Francisco, California 94080, In compliance with Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the South San Francisco City Clerk's Office at (650) 877-8518. Notification 48 hours in advance of the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. Chairman; Nell Cullen Selected by: Largest Special District of the type in H Code Section 34188 Vice Chair: Selected !: Denise Porterfield Say. Mateo County Superintendent of Schools Deputy Superintendent, Fiscal and Operational Services Sari Mateo County office ofEducati rl Board Members: Mark Addiego Councilmem er, City of South San Francisco Alternate: Barry Nagel City Manager, City of South San Francisco Gerry Bea.udin Principal Planner, City of South Sari Francisco Selected b: Mayor of the City of South Sari Francisco Mayor of the City of South. San Francisco Barbara Christensen Chancellor of California Community College Director of Cornmunity Gove=ent Relations, San Mateo County Community College District Reya Farrales Deputy County Manager, San Mateo County Paul Scannell Counsel Michael Roush as Alternate to Craig Laadie Sari Mateo County Board of Supervisors San Mateo County Board of Supervisors (Public Member) Advisor Marty Van r uyn — Assistant C .Ity Manager, City of South San Francisco Jinn Steele — Finance Director, City of South San Francisco Steve Mattas — City Attorney, City of South San Francisco Kiista. Martinelli — City Clerk, City of South Say Francisco Anrr ndo Sanchez — Redevelopment Consultant, City of South San Francisco CALL TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE AGENDA REVIEW OVERSI �Hrl' BOARD REGULAR MEI,11-'rN JULY 1 0 01 AGENDA PAGI, 2 PUBLIC COMMENTS Comments from members of the public on items not on this meeting agenda. The Chair may set time limit for speakers. Since these topics are non - agenda items, the Board may briefly respond to statements made or questions posed as allowed by the Brown Act "rover=ent Code Section 54954.2). However, the Board may refer items to staff for attention, or have a matter placed on a future agenda for a more comprehensive action report. MATTERS FOR CONSIDERATION 1; Motion to approve the Minutes of the Regular fleeting of June 12, 2012. 2. Update on recent State Redevelopment- related Clean-up Legislation AB 1484. 3. lnfonuation on downgrade of all Redevelopment Agencies' Bond Ratings by Mood's Investor Services. 4. Resolution approving lease criteria and procedures for One Chestnut .Avenue. 5. Discussion and Follow-up Questions Regarding Real Property Assets Listed Below. Address SCo Asset Transfer Assessment Row Number 559 Gateway Blvd 1 296 .Airport Blvd 5 201 Grand Avenue 14 207 Grand Avenue 13 217 -219 Grand Avenue 12 200 Linden Avenue 9 212 Baden Avenue 1 216 Baden Avenue 11 480 No. Canal 6 432 Baden Avenue 2 616 Linden Avenue 15 700 Linden Avenue 16 905 Linden Avenue 17 938 Linden Avenue 1 323 Miller Avenue 3 356 Grand Avenue 4 472 Grand06 Spruce Avenue 7 468 Miller Avenue Chestnut Avenue 21 1 Chestnut Avenue 2 APN 093- 312 -050 19 APP 093- 312 -060 19 OV147,RSIGHT" BOARD REGUIAR MEl',"TING JULY 10 2012 AGENDA 13A GE Address SC O Asset Transfer Assessment Row Number APN 093-331-050 19 AN 093-331-060 19 AN 011-326-030 19 6. Future Agenda Items. a. Report from Bond Counsel regarding the legal authon'ty of the Oversight Board to approve defeasance of bonds issued by the former Redevelopment Agency. b. FPPC Conflict of Interest Code. C. Administrative Budget: consideration of need for audit/RDA financial consulting assistance. d. Recommendations pertaining to disposition/demolition of properties previously held by the Redevelopment Agency. C. Report on any determination by the State of California Department of Finance on unfunded pension and liabilities being an enforceable obligation of the Successor Agency of a Redevelopment Agency. L Report on legal analysis pertaining to Harbor Distn'ct Agreement and consideration of motion approving Harbor District Agreement as enforceable obligation of the Successor Agency. ADJOURNMENT OVERSI'H1130ARD REGUIAR MEETING JULY 10, 2012 AGENDA PAG'Ll 4 REGULAR MEETING - ..,, A,� � � _ - �o�z� s�,� MINUTES ` _.. `�:' OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE CITY OF c'QLIFO SOUTH SAN FRANCISCO REDEVELOPMENT AGENCY P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 Meeting held at: MUNICIPAL SERVICES BUILDING COMMUNITY ROOM 33 ARROYO DRIVE SOUTH SAN FRANCISCO, CA TUESDAY,, JOE 12, 2012 CALL TO ORDER Time: 2:01 p.m, PLEDGE OF ALLEGIANCE AGENDA REVIEW Present: Boardmembers Addiego, Beaudin, Christensen, Farrales and Scannell*,) Vice Chairperson Porterfield and Chairperson Cullen. Absent: *Boardmember Scannell left the meeting at 3:00 p.m. and was mot present for the bus tour set forth at Agenda Item No. 4(b). Led by Board .ember Fareal es. Chairman Cullen suggested that Item 5 pertaining to flic PG&E Lease of I Chestnut Avenue be heard pn'or to the meeting's inoveinent to the bus tour. He proposed that if necessary a detennination on the lease could be made during the bus tour porfion of the meeting after the Board had viewed the pro perty. Boardinembers agreed to follow this course as necessary. PUBLIC COMMENTS Comments from members o `t xe public on items not on this meeting agenda. The Chair may set time limit for speakers. Since these topics are non-agenda items, the Board may briefly respond to statements made or questions posed as allowed by the Brown Act (Government Code Section 54954.2). However, the Board may refer items to staff for attention, or have a matter placed on a future agenda for a more comprehensive action report. None. MATTERS FOR CONSIDERATION l . Motion to approve the Minutes of meetings of May 8, 2012 and May 17, 2012. Motion— Boardmember Addiego Seeond— Boardmember eaudin: to approve the Minutes of meetings of May 8, 2012 and May 1 , 012. Unanimously approved by voice vote. 2. Consideration of a proposal to authorize the City Manager er nd Assistant City Manager to enter into contracts and agreements for services that are budgeted on the approved recognized obligations payment schedule (ROPS). Director of Finance Steele presented the staff report recommending the Board author* e the City Manager and Assistant City Manager to enter into contracts and agreements for services that the Board previously approved on ROPS documents. He noted this was consistent with City Policy on similar agreements. Boardmember Scannell requested that future agendas note agreements entered pursuant to this authority. Staff agreed. Motion— Boardmember Christensen/Second— Boardmember Scannell: to authorize the City Manager and Assistant City Manager to enter into contracts and agreements for services that are budgeted on the approved ROPS. Unanimously approved by voice vote. 3. Discussion of timing of Counter Redevelopment Property Tax Trust Fund (RPTTF)distributions and comparison to staff estimates. At Chairman Cullen's request, Director of Finance Steele discussed estimates by the County and the City's Finance Department related to RPTTF distributions. He explained the City's estimate did not project distj i utions to each individual taxing entity, but tried to capture the impact of bond defeasance on die total amount avAable for distribution. He noted there was not much h difference between the County's numbers and the City's numbers reflected on the first spreadsheet. With respect to the second spreadsheet, lie explained the County was using six month numbers. Accordingly, for consistency, the City would start reporting to the Board in the s ne fashion. oardmerribers confirn -ied agreen -ient to this reporting rnediodolog OVERSIGHT BOARD _._ ATE 12, 2012 MINUTES PAGE 4. Review of property assets. a. Property review. Assistant City Manager and Director of Economic and Community Development Van Duyn provided a Po werPoint presentation reviewing commercial property assets. The presentation, including pictures, explained current use of properties and highlighted assemblages, including master plan descriptions where relevant. 5. (As setforth above under Agenda review, Agenda Item 5 was heardprior to Agenda Item ( ) below.) Approval of a license agreement allowing PG&E temporary use of a portion of 1 Chestnut Avenue and a vacant property on Mission Road for a contractor office and staging area. Director Van Duyn presented the proposed License Agreement authorized by the Successor Agency and recommended for approval by the Oversight Board. He explained the proposed Agreement with PG&E was for temporary use of a portion of 1 Chestnut Avenue and a vacant property on Mission Road for a contractor office and staging area through December of 2012. PG &E planned to use the properties during mandatory and urgent replacement of gas pipelines in the City. The agreement would include an option to extend Past December as needed. Realtor ltor Vic C tan aro addressed the Board to advise that his client, Pet Club, had an interest in renting the 1 Chestnut building temporarily due to its displacement from its current location in the City. He noted that Feet Club had a successful business that had been operating for 15 years and hoped to continue with South San Francisco as its home. Pet Club was willing to make improvements to the building to facilitate its use and believed the temporary use would last about three yew's, Director Van ]uyn advised the subject property is located in an area that would be torn up as part of the PG&E gas line replacement work that would be done in the area. Accordingly, immediate use of the area for a commercial purpose would be challenging irrespective of whether the Board deter ined to approve the PG&E agreement. oardmemb rs requested clarification as to the termination terins included in the proposed agreement. Director Van Duyn advised the lease was slated to terminate in December with an option for extension. Counsel Labadle determined that a 10 day notice was required for tenn.ination upon breach. The agreement was not terminable at gill. Jim Cogan of PG&E addressed the Board and introduced mei-ribers of the Pipeline Replacement Project Team, Nathan Mott. and Tom McGouglan. Fle explained the i Chestnut Building would be used a as a location whcre the community, st keholders and construction management team could conic together during tlic project. Accordingly, the agreement was not intended to be needed beyond the project's duration. He further noted PG&E would not object to revision of tennination teen -ns as long as a lengthier notice period was included. OVERSIGHT BOARD JUTE 1 , 2012 MINUTES PAGE Boardmembers suggested including an at wi 11 termination elause with a 3o day - notice period. Chair aj-1 Cullen noted that approval of tiie present agreement With PG&E would not preclude discus iwis with Pet Club going forward. Motion— — oardineinber Christensen/Second— oardinemb r cwin ll: Approving a license agreement allowing PG&E temporary use of a portion of 1 Chestnut Avenue and a vacant property on Mission Road for a contractor office and staging area and incorporating a lease term authorizing termination without cause vv th 30 days notice, Unanimously approved by voice vote. 4b. Tour of properties (van available). Address SCO Asset Transfer Assessment Row Number 559 Gateway Blvd 1 296 Airport Blvd 5 201 Grand Avenue 1 207 Gran d .Avenue 13 217-219 Grand Avenue 1 200 Linden Avenue 9 212 Baden Avenue 10 216 Baden Avenue 11 480 Igo. Canal 6 432 Baden Avenue 616 Linden Avenue 15 700 Linden Avenue 16 905 Linden Avenue 17 93 8 Linden Avenue 1 323 Miller Avenue 3 356 Grand Avenue 4 472 Grand/306 Spruce Avenue 468 miller Avenue 80 Chestnut Avenue 21 1 Chestnut Avenue 20 APN 093-312-050 1 APN 093-312-060 1 APN 093.331 -050 19 APN 093- 331 -060 1 APN 011 - 326 -030 19 At 3 :oo p. . Boardrnembers, staff and members of the public proceeded with a van tour of the above referenced properties. Director Van Duyn lead the tour explaining the property assemblages, building uses and plans where applicable. OVERSIGHT Bow JUNE 1� 2012 MMTES PAGE 6. Future Agenda Items. . Report from Bond Counsel regarding the legal authority of the Oversight Board to approve de easan e of bonds issued by the former Redevelopment Agency. 1. FPPC Conflict of Interest Code. C. Administrative Budget: consideration of need for audit/RDA financial consulting assistance. d. Recommendations pertaining to disposition demolition of properties previously held by the Redevelopment Agency. C. Report on any determination by the Mate of California Department of Finance on unfunded pension and liabilities being an enforceable obligation of the Successor Agency of a Redevelopment Agency. L Report on legal analysis pertaining to Harbor District Agreement and consideration of motion approving Harbor .District Agreement as enforceable obligation of the Successor Agency. ADJOURNMENT Motion — Boardmember Christens Second— Boardmember Farrales: to adjourn the meeting. Unanimously approved by voice vote. Pursuant to the above motion, Chairman Cullen adjourned the meeting at 4:42 p.m. bM1tted: �.�. - Approved.: .� .. _. Vista J. Maid lli,'City C(erk Nell Cullen Chairperson City of Sbut.h. San Francisco, - .,.__ oversight Board for the Successor .Agency __. to the City of South Say. Francisco Redevelopment Agency OVERSIGHT BOARD XE 129 2012 MINUTES PAGE °"! " "- Redevelopment Successor Agency Oversight Board Jell ° Staff Report DATE: July 10, 2012 TO: Members of the oversight Board ,FROM: Steven 11 attas, Successor Agency Counsel and Marty Van Duyn, Assistant City Manager SUBJECT: : 1 484 Ova-view RECOA 1 IENDA' I N Successor Agency staff ends that the oversight Board receive a presentation ' g the prnary provisions of AB 1484, the budget trailer bill applicable to the dissolution es for former redevelopment agencies. AB 1484 was signed by the Governor on June 27 and took effect immediately as a budget trailer bill. No action is required, BACKGROUND/DISCUSSION To provide background on AB 1484, staff has attached the smeary of the major provisions of 1484 and the important dates timeline produced by the LOCO. AB 1484 establishes hard deadlines for various reports and actions over the next ycar and also modifies the property disposition provisions of AB 26 x1 once a Finding of Completion is issued the Department ent of fimce. By M Marty van luyn Steven Mat&s Assistant City Manager and 'rector Successor .Agency Counsel Attachments: 1930762.1 LEAGUE 1400 K Street, Suite 400 • S cramp o, Cal rria 95814 OF S�7CITIES CALIFORNIA Rhone: 916,658.8200 Fmc 916.668.8240 vmwxacifiesorg , Major Provisions of AB 1.4841 Three payments: Successor agency must male three payments: July ; 'Faxing entities' share of December 2011 property tax distribution to redevelopment agency 'successor agency • November- + / -: Low-Moderate Income Dousing Fund e April 1 /- : Unencumbered cash In addition to these three payments, if a successor agency did not make complete 2 0 11- 12 pass- through payments, amount of payment not made will be deducted from property tax distribution from auditor - controller. 2. New audit by October # Successor agency roust retain licensed accountant to audit boos:3 Audit of L IH Audit of cash assets * Audit of cash transfers to public agencies and private pares4 I New penalties: F,&= la.ma la 1Ul 2 -Da - : successor agency subject to civil penalty of 10% of the amount owed plus 1.5% of the amount owed for each month that payment is not made unless DOF finds that payment of penalty wIh jeopardize payment of enforceable obligations. Until payment is made,, �. The League will continue to refine this analysis vft the assistance of its RIBA Attorney working Group and other city officials. 2 Additional iuformdon about these payments is found in the Appendix. .Agre+ed -up on procedures audit completed by auditor- controller can substitute ror the licensed account= audit if it Includes all sWtaxtory requirements 4 successor agency mint amenmpt to recover cash transferred to pubbc agency without an enforceable obligation. July 2, 2012 0 successor agency may only pay bond debts City subject to sane civil penalty. City will not receive July 18 sales tax payment (up to amount owed . s Failure • : offset of city sales tax or property tax of the amount required to be transferred • Pidjure to trandmmh.a e : Offset of city sales tax or property tax of the amount required to be transferred • i j2bUgaflon; Offset of sales tax or properly tax of the local agency to which the cash was transferred. a Failure tgjgbmit.JJ0PS. b y.-Seatember 1 - ZQ 12 and subseq deadlIDIM: City to pay civil penalt y of $10,000 per day for each day beyond deadline 4, Safe Harbor: Finding of om etic The Department of Finance will issue a findinLy of ompletim to a successor agency that pays the following amounts: The amount determined in the audit of the L IHFIO • The amount determined in the audit of all other funds l' The amount if an y owing to taxing entities from the D ecember 2011 property tax payment1 The following applies to a successor agency that is issued a finding of completion: V Loan ilereemcilta, entered into between the redevelopment agency and the city are deemed to be enforceable obligations if oversight board makes a finding that loan was for legitimate redevelopment purposes. As enforceable obligations, payments are listed on I1. Repayments of loans may not begin prior to 2013 -14 fiscal year at rna imum amount described in statute Repayment amounts received by city must first be used to retire outstanding amounts borrowed and owed to LMIHF of the 5 Seon 34183.(b )O Sewn 34173# 7 Section 34179.6(h) a Section 34179.6(h); see, also 34179.3 1) Section 34191.1. 10 Section 34179.6 " Section 34179.6 22 Simon 34183S 13 DOF continues to retain final authority to approve Item lister on RO S. July 2, 2012 Q former redevelopment agency for purposes of the SERAF payment, 2 0% of loam repayment amount must be transferred to LMIH Asset Fund.14 vo' Bond.proceeda derived from bonds issued on or before 12/31/10 shall be used for the purposes for which the bonds were sold. Proceeds which cannot be spent consistent with bond covenants shall be used to defense the bonds or to purchase those same outstanding bonds on the open market for uancellation.15 Use of bond proceeds listed on BPS. '16 v/ e e In lie of the provisions of hi require disposal of real property assets at the direction of the oversight board, successor agency prepares a long -range property management plan and submits to oversight board and DOF for approval. Permissible uses of propel include retention for governmental use; retention for future development; sale of property; use of the property to fulfl1l enforceable obligations. If plan directs use or liquidation of property for a project identified in an approved redevelopment plan, the property shall transfer to the city. No transfers until plan approved by oversight board. and D .17 Statute Qf L' ' o The longer statues of limitations years) to challenge actions of fie former redevelopment agencies coo not appl .'s 5. New Power of State Controller' AB 1481 directs the Controller to review the activities of successor agencies to determine whether an asset transfer occurred January 31, 2012, between the successor agency and the city or county that created the redevelopment agency, or any other public agency that was not pursuant to an enforceable obligation on an approved RDP , The Controller is directed to order the assets returned to the successor agency. Tity" is defln d very broadly to include any entity which is controlled by the dty or for which the city is financially responsible or accountable. 20 6, Increase in authority for Department of Finance D P may eliminate or modify any item on an oversight board - approved RIPS, The auditor - controller must distribute property tax in accordance with charges ;Wade to the 1.P S by DDP. if successor agency disputes DF 14 341 9 1.4(1b ) (). 15 34191A(c) 16 DOF continues to retain fin a-1, authority to app tove items listed on RODS. 17 Section 34191.5 18 Section 33500, 33501 19 Sectioh 34178.8 - 0 Section 34167.10.- B . directed the State Controller to review asset transfers from re6vel pm nt ag6ndes to the city or county that created the agency that occurred after janoary 1, 2011. If the city or county was not contractually committed to a third party for the expenditure or encumbrance of those assets, the Controller was directed to order the return the assets to the redevelopment agency or successor agency. July Z, 2012 action, disputed stern may be carried on lP. if dispute resolved in favor of successor agency in the future, the past allocation of property tax to the successor agency is not changed nor is a "ItabiliW created for any affected taxing entjty# 1 P may review and object to oversight board actions approving (1) establishment of new repayment terms for outstanding loans; and (2) setting aside amounts in reserves as required by bond indentures, and similar docurnents 7, New aresWctions on authority of Successor agency No new enforceable obligations except 1 as specifically authorized by the statute; in compliance with enforceable obligations that existed prior to June 2 8, 2011 or (3) to here staff, acquire professional services and procure insu.rance.a • May not transfer revenues or powers to any other public or private party except pursuant to enforceable obligation on an approved ROP . Any such transfer of authority or revenues are void" and successor agency required to reverse transfers. Controller may audit and order return of transfers of authority or reenues. • Actions taken by redevelopment agencies pursuant to VARP (voluntary Alternative Redevelopment Program in AB 2 7 ) are "'ultra vires" and do not create enforceable obligations. -5 If successor agency exercised power to reenter into agreements with city (section 34178) and agreement was approved by oversight board but rejected by DOS', successor agency and oversight board may not act to restore Funding for the reentered agreennent z • No reestablishment of loan agreements between successor agency and city except pursuant to safe harbor provisions. B. Miscellaneous City may loan or grant funds for administrative costs, enforceable obligations or project - related expenses. Receipt and use of these funds shall be reflected on the BOPS or in the 21 Section 34179 22 Section 34181(0 23 Section 34177. (a); 3 417 7. (b 24 Section 34177.3(c) 25 Section 177.3(d) 26 Section 34178(a) 27 Section 31BOW July 2, 2012 (:L4-.)' �- administrative budget subject to oversight board approvals Are enforceable obligation is created for repayment of loan . 1B • N= Oversight _l _Px_o_idsiQ1nS29 V Auditor - controller may determine "largest special district" v/ Section 1090 does riot apply to employee representative on oversight board Oversight board members are protected by immunities applicable to public entities and public employees v/ Meetings at which oversight board will consider disposal of successor agency assets o r allow set -aside of reserves required by bond indentures requires 10 days' public notice. 30 v" Written notice and information about all oversight hoard actions roust be provided to DO F by electronic means. DO F has 4 o (instead of o ) days to review and approve, reject, or modify oversight board action. Oversight board may direct successor agency to provide additional legal or financial advice. Authorized to contract with the county or other pubic or private agencies for administrative support v" On matters within its purview, decisions made by oversight board tisup rsede those made by the successor agency or the staff of the successor agency. P131 • er authrit, r± Uditor- controller: A county auditor - controller can object to an item on the ROPE or to the funding source listed for an item on the lobs. Objections are seat to DOF to resolve. Mango Agtp ro ection for s c ess Qr agcy: Cleanup plans and liability limits of redevelopment agency transferred to successor agency and to housing entity, upon entity's requet. irn't d r' ty f r u ccesS o r aggn cy to r efi _ an i y4 u ce r e 1 35 e Section 34175(h 29 Section 34188 0 Seion 341'1( 1 Section 34179 32 Section 34182,5 33 Section 3417[ + Section 34177.5 35 Section 34-173(8) July 2, 2012 Append - successor Agency Required Payments /Fund Transfers v/ Transfer of Unencumbered BalanceS36 requires that a successor agency transfer unencumbered cash balances and low and moderate income housing funds to the counter auditor - controller for distribution to the taxing entities. AB 1484 requires a successor agency to retain the services of licensed accountant to audit 1 the balance in the LMlF; 2 the balance in other cash funds; cash payments that were made in compliance with are enforceable obligation* and 4) cash transfers that were made without an enforceable obligation. in addition to transferring the balances in the LM1HF and other cash funds, a successor agency roust make efforts to recover the cash transferred without are enforceable obligation. v Payment of December 2011 Taxing Entity Property TaX distributes property tax through a `waterfall" of payments which includes passthrough payments, payments to successor agencies for enforceable obligations, p ayments to successor agencies for administrative costs, and payments to taxing entities. The waterfall for the December 2011 property tax payment did net operate as intended because of the stay unposed by the Court in Matosantos. The property tax payment to taxing entities was not made. AD 140.4 requires successor agencies to make those payments by July 12. V' Payment of 2011-12 Pa sthrough Payments Some successor agencies made 2011-12 passthrough payments and some did not AB equires the auditor-- controller to reduce property tax payments to those successor agencies that did not make pass through payments in 2011-12. 36 Sermon 34179.5; 34179.6 37 Section 34183.5 July 2, 2012 [(b- L LEAGUE i F A L i F 1 Y A 1 400 Street, Suite o * bra nto, + alifomia 95814 Phone. 916.658.8200 Fax: 916.668.8240 �CITIES www.eaciOes.org AB 1484: Important Gates July * County auditor -controller nodes successor agency of amount of funds owing taying entities based upon December 2011 property tax payment' July 12: Successor agency must make payment to auditor - controller for deposit into Redevelopment ent Property Tax Trust Fund and disftutlon to taxing entities. July 16: Audbr-oontroller distributes money received from successor agencies to taxing entities. Monies received der July 12 date disfflbuted within days of recelpt.3 July 18: City sales tax payment t suspended ff successor agency doesn't make July 1 any en .4 August is Succeswr 'husing entity must submit to DCF a list of housing assets that contains explanation of how assets meet criteria set forth in the law. DF will prescribe format for list. DOF may object to any of the assets within 30 days. If after meet and corder, D F continues to object, asset must be returned to the successor agency. August 10: Successor housing en* notes successor agency of any designations of use or commitments of funds that suo s or housing entity authorizes successor agency to retain. August 1 +1-: Oversight board meets to consider ROPS for J uary 1, 2013 through June 30, 2013 which must be submitted to DF by Seperber'1. September 'I: ROPS for .January 1, 2013 through June 30, 2013 must be submitted electronically to DO after oversight board ,approval! DOF rx es determinations wfthin 45 days. Within 5 days af determination, successor aged may request additional review and meet and confer. I Section 341.83 .5 ( (A) . Note: The statute, that may be draped in error, states that if June 1 property tax payment has not been made to successor agencies, the amount owing to to ring entities will be deducted rrom that same June 1 payment (34183.5(b) (1 )) Section 341 3 () (A). 3 Section 41' 3. (b) (A). # Section. 34183 .5 ' (A Section 34176(a)(2). Defin1don of *housing asset found at section 34176(e). Sermon 34179.6(c) 7 Simon 34177(m). Future ROPS must be submitted to DOF 9D days prior to property tax di t b tion, City subjw to dvil perm of $10,000 per day %r successor agents failure to timely submit R (Section 47rn. July 2, 2012 October 1: Auditor orrtroller may provide notice to successor agency of any objections to Remy on January �- .dune 1 ROB'S. October 1; Successor agency submits to oversight board, oounty auditor -controller, Mete Controller, and D F resub of the review of the L AI IMF conducted by the licensed accountant agency rust retain. Note: floensed accountant must be approved b the county auditor - controller. October 1: County auditor- controller completes greed -upon procedures audit of each redevelopment agency.10 Auditor- controller proMes estimate of propel payments to successor agency for upcoming six-month 11 period. October 15: Oversight Board must review,, approver and transm t Ll1 lHF audit to D FP auditor- controller, Note that oversight board must hold a public session to consider audit at keast five business days prior to the meeting of oversight board in why LMIHF audit is considered for approval. 12 November : Last day for D F to complete review of L11 lHF audit ard reports findings, determinations, and decision to overturn oversight board decision to alloy retention of successor agency ass►ets.' Win 5 days of receipt of DF audit findings. Successor agency may request meet and confer to resolve disputes with D F findings on LMlHF au .' D F must confirm or modify its determination and decisions within 30 days. vin 5 days of r c 1pt of DO F final audit determination: Successor agency to transfer LMI H F funds to a editor -wntrolier." City sales tax/property tax may be offset for unfunded amounts. December 1: Successor agency may report to auditor - controller that total amount of available revenues will be 'Insufficient to fund enforceable obliga ons.16 Se Won 34182.5. +ection 3417 .6 (a)} The requirement to retain a licensed accountant is fbu nd in sermon 34179.5. The audit provided by the county auditor- contro er can be substituted for an audit by a licensed accountant if it contains the inform ti n required by Section 34179.5. 10 SeLtion 34182 (a) (1) ii Section 41() 13 Section 3417. and (b) U Section 34179.6(d) 14 Sermon 34179.6(e) 15 Sean 4179.6( 1 Section 3413(b June 28, 2012 December 15: Suommor agency submits to oversight board, county auditor-oontroll r,, State Controller, and DOF resub of the review of all other fund and account balances by lioensed ac=untant. "' 2013 .January . Auditor - controller makes distrilbutions of property tax for January — June 2013 ROPS." January 15: oversight board must raw, approve,, and transmit other funds audit to F, auditor troll ."' March 3: Successor agency submits ROPS for July 1, 2013 through December 31, 01 o f after oversight board approval." April 1: County auditor - controller provkdes estirnate of property tax payments to successor agency for upomin six-month period. April 1 D F completes review of offw funds audit and reports findings, determinations, and dacWm to overturn oversight board decision to allow retention of sucowwr agency ase#s. April 6 No later than 5 days after recei ring DOF determination on other funds audit, successor agency may request meet and confer to resolve disputes with D F findings. DOF must confirm or modify its determination and decisions within 30 days. April 10 : Successor agency to transfer other "cash and essete audit peyment to auditor-wntroller if meet and confer process comple e.23 City .sales tax/property tax may be offset for unfunded amounts. May 1: Successor aged reports to auciftor-mwntroller if total amount of available revenues will be lnsuWe nt to fund enforceable obllgafions.24 17 Section 34179.6(a). 1S Section 34183(b). 19 Section 3417.(x. Section 34177(m). 21 Section 341 3 (c) 3 2z Section 34179.6 e 23 Section 34179.6 . 7be statute does not allow sufficient time between completion of F review on April 1 and required payment on April 10. 4 Simon 34183. June 28, 2012 La) SAN Redevelopment Successor Agency Oversight Board O Staff Report c�LIFR��� DATE: July 10, 201 TD; Members of the Oversight Board FROM: Jinn Steele, Director of Finance SUBJECT: INFORMATION ON DOWNGRADED RATINGS ON ALL REDEVELOPMENT AGENCY BONDS BY MD DYES INVESTOR ST SERVICES RECOMMENDATION It is recommended that the oversight Board review the attached information matlon on the downgraded ratings on all Redevelopment Agency Bonds by Moody's Investor Services, BACKGROUND/DISCUS SI N Moody's Investor Services recently downgraded all California Redevelopment Agency Bonds, including South San Francisco's 2006 Bonds, The primary reason they cited for downgrading is that the ambiguity in the redevelopment wind down legislation A has resulted in some former redevelopment agencies having cash flow problems as a result of the timing of the payment of their Recognized Obligations Payment Schedule (ROPE) by some counties in California. body's Investor Services acknowledges this is a temporary problem, The Oversight Board should know that this cash flow problem Moody's Investor Services cites does not affect South San Francisco. We have already received funds from the County to Pay our next semi- annual Redevelopment Agency (RDA) bond debt service in September 2012, and our debt service payments are approved on our FOPS by the Oversight Board and the State Department of Finance. What will likely happen for those investors that holds our bonds is that the market valve of those bonds will go down due to the ratings downgrade. We have no obligations with regards to the rna),et ,value of our bonds. Our obligation is to report to bondholders that the ratings have been downgraded, The City has done that, and that communication is attached, By: Approved Jinn el Marty Van Dun Fin jl�'Cce Director Assistant City Manager and Director of Economic and Community Development Attachment: Moody's Investor Services Ratings Report MOODYS INVESTORS ;SERVICE Rating Action,- food s downgrades to B l all Cali form i a TABS rated aa3 or above, reflecting sharply increased u n Certainty of continued imelt' cashA ow for debt s r i ce Paymen is; all TAB ra re nal n on review for possible t withdrawal due to insufficient in or a i n Global Credit Research - 14 Jun 2D1 Approximately rm atel t 1. billion of debt affected New York, dune 14, 2012 — loody`s Investors Service has downgraded to Bal all California tax @Vocation bonds that were rated Saa3 or higher. All of our California tax allocation bond ratings remain on review for possible withdrawal. This continued review reflects the likelihood that insufficient information will be available to evaluate the relative probability of default due to the new cash flow pattern established in the redevelopment di solu on law AB I . The new cash distribution procedure effectively elirNnates bond indentures' flow of funds, and it is clearly ubject to differing proceduraI interpretations. These differing interpret bons can, without warning, give rise to the potenW for debt service defaults that did not e t prior to the passage of this law. Absent adrNnIstrative or- legislafive correction of this weakness in the IavVs ter rm, hood `s will likely withdraw its ratings on Cal ffomia tax allocation bonds. RATING RATIONALE AL The downgrades for the bonds rated Baa3 and higher Primarily r'eltect the heightened cash flow rt l s arising from the implementation of state legislation dissolving all retie eloprnent agencies. This legislation effectively altered the flow of funds to be used to pay bondholders. Even with strong credit fundamentals and intact legal security, timely debt service payments on California tax allocation bonds cannot currently be assured. This uncertainty pHrrorily arises from the potential for legal and political disputes on the correct procedure for distributing cash according to the red agency dissolution lava, AB 1x26. This risk was recently highlighted by a dispute (discussed below) between the City of San .dose's Successor Agency and Santa Mara County that, according to a public notice filed by the City of San Jose, threatens timely payment of debt service in August despite sufficient tax increment revenues derived from the legal pledge to bondholders. The downgrade also reflects the absence of a robust mechanism within the dissolution lave itself to resolve such disputes and the evolution of the California Department of Finance's guidelines on distributing to increment revenues. Wh11e the law has a reaIIocation procedure 1n the evert of a shortfall that results solely from the new cash distribution procedure, the process for resolving disputed calculations and varying legal interpretations is not sufficiently detailed or prsibed so as to provide assurances of full or timely bond paynnents. The resolution of such issues may be left up to the courts if the state does not pass additional "cleanup" legislation. The current state guidance to county auditor- controllers to %mithhold property tax distnibutions in the absence of a state approved ,payment schedule also 'injects an element of payment ti ng uncertainty that did not exist prior to the dissolu ion laves ado #ion. While the implernentafion of the law has given rise to new cash flow rid s, Moody's believes the law is clear- that fundamental legal security for tax allocation bands is intended to be preserved. Therefore, we would expect that any defaults stemming solely from the new law`s cash distribution procedure would likely over tip be cc rr'ected. we believe that after a default, recovery would likely be at or close to 100 %. All ratings remain on review for possible withdrawal due to the potential that insufficient information Wll be available on a continuing, long -term basis wi th which to determine the relative probability of cash flow disputes leading to defaults. STRENGTHS Successor agencies, which replaced the dissolved redevelopn-ent agencies, remain explicifly obligated to horn e sting bond contracts, with recognition of legally pledged revenue streams, debt service preserve funding requirements, and other perforn nce requirements in existing bond documents. County auditor - controllers have generally indicated a very strong willingness and ability to comply with the new revenue allocation requirements on a sufficiently timely basis to allow successor agencies to meet easting debt service payment obligations. - In the long -run, existing contract law should protect bondholder's interests, minimi:6ng losses that rrmight result solely from new procedural requirements in the redevelopment dissolution law. {CHALLENGES While the legislature's intent to honor wdsting obligations is clearly stated in the law, the mechanics of the new law do not provide sufficient clarity on process to realize this intent. - The law creates significant uncertainty with respect to tirT rng and mechanics of cash flows, which in our vier effectively trumps the strength of the legal security and debt service coverage of bonds. The law establishes an initial allocation of property tax revenues that conflicts with existing bond documents, and the effectiveness of the resolution process on a timely basis is uncertain, - The timefrarne for property tax disbursements is more restricted than it had been previously, potentially resulting in rNsrr tched receipt and disbursement schedules over the course of a year. - The new law's audit requirements and sheer comple ity have resulted in unexpected payment delays. These Will require legal and /or adn�inistrative clarification. WHAT COULD MAKE THE RATINGS GO UP - Implementation of the legislation in a manner that clearly preserves timely debt service payment and enables compliance with bond documents - Legislative or judicial clarification that compliance with bond documents takes precedence over other, apparently conflicting aspects of the legislation WHAT COULD MAKE THE RATINGS GO DOWN - Continued implementation of the legislation in a way that does not clearly preserve Vrnely debt service payment -- Continued legal uncertainty and oonflict between the law's requirements and strict compliance with existing bored documents - Judicial determination that compliance with bona documents is subordinate to, or to be balanced against, other objectives of the legislation The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003, Please see the Credit Policy page on `ww- mocdys,com for a copy of this methodology. REGULATORY DISCLOSURES The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the ELI are endorsed by Moody's Investors Service Ltd., One Canada ,Square, Canary Wharf, London E 1 4 5F)A UK, in accordance with Arta paragraph 3 of the Regulation EC No 1060/2009 on Credit bating Agencies. Further information on the EU endorsement status and on the Moody's dy's office that has issued a particular Credit Rating is available on wvvw. moodys.com. For ratings issued on a program, series or categor tclass of debt* this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category /class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular- rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the is uer/entity page for tine respective issuer on www.moodys.com. Information sources used to prepare the rating are the following: public information Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating. Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third -party sources. However, Moody's is not are auditor and cannot in every instance independently verify or validate infer ation received in the rating process. Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests Please see the ratings disclosure page on www.moodys.com for information on A M 's major shareholders (above %) and for (S ) further- informtion regarding certain affiliations that nay e st between directors of M O and rated entities as well as (C ) the names of entices that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in M O of more than %. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Mood 's Corporation; however, Mcodvs has not independently verified this matter. Please see Moody #s Rating Symbols and Definitions on the Rating Process page on www.rnoodys.com for farther i fora tiorn on the meaning of each rating category and the definition of default and recovery. Please see ratings tab on the isuerlentity page on www. mood ys,00m for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody #s ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information. Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating. Eric Hoffmann Senior Vice President Public Finance Group Moody's FIS Domestic Sales Office - San Francisco CA One San some St. Suite 3100 San Francisco, CA94104 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS. 212-553-1653 levork Khrirrian Vice President - Senior Analyst Public Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS. 212-553-1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U . S.A. JOURNALISTS: 212-653-0376 US Municipal Long-Term Debt Ratings Municipal Ratings are based upon the analysis of five primary factors related to municipal finance: market position, financial position, debt levels, governance, and covenants. Each of the factors 'is evaluated individually and for Its effect on the other factors in the context of the municipality's ability to repay its debt. a Issuers or issuub tated Aaa den the #tun est c red 1tworthiness reIati, %rle tO Other U municipal or tax-exempt issuers or issues,. Aa Issuers or issues rated Aa demonstrate vety strong creditvvorthlnes s relative" to ether U municipal or tax-exempt Issuers or issues. Issuers or issues rated A precient above -a v rag- c.redih- vorthin ss telarive to Other U municipal or tax- exerll t Is Laers car js ues. Baa Issuers or issues rated I as represent avt!ra e Lred ;twotthines� rel tivc to ether US munici- pal or tic- exempt is uiers ur issues. Ba ls,�tieis car issues ratud li d rnonstrate el v - { -ievera e creditworthiness relative to other U m umc. ;pal ;,)r tax - exempt issuers or B Issuers of issw rated 13 derounstrate weak creditwort rnes5 relative to other US municipal or tax- exempt Issuers of issue's.. Caa f5suers 01 issues rated Caa der ionstrate v r }r week cMditWOf1 ineSs telative to ether U municipal oy tax - exempt issuers or issues. Ca Issues- or iss �,s rated Ca demonstrate e trcmel� weak c ?-edit ort iness relative to other U municipal or tax-exempt xs uets car issues. Issuers or issues rated C demonstcate the �veakost creditworthiness relative to ether U rnuoidpal or tax - exempt issuers or issues. NOW MoodYN ,ippend5 r7umenLaI mod,,fi:r. i ?, and J, to eat 1, gvnorir rating category from Aa through Cal the mod tier ] mgbcate5 {hw the Five ►r 4,r obli cmon f.voks aj the r' ;gfier and of jts gf :rcrir rating c,its;-gorv, t1 ;e nio(h h er? mdwiitei a rnid- range la n. mg, ar)d the modi(wr ? rr dwalp a ,ank,r p in rbe looker end of that eopr� F(- IdWj8 catiegury oody's Rating Symbols & Definitions $701675,000 REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO MERGED REDEVELOPMENT PROJECT TAX ALLOCATION REVENUE BONDS, SERIES 2006A San Mateo County, California Dated: May 3, 2006 Base CUSIP`: 840036 NOTICE OF OCCURRENCE OF LISTED EVENT As of June 19, 2012 Also available at: W1 LL AN FinancW SerWcee. www.vvilldan.com * Copyright, American Bankeft Association, USIP data is provided by Standard and Poore, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any way as a substitute for ttie CUSIP service. The issuer takes no responsibility for the accuracy of such number. OCCURRENCE OF LISTED EVENT— RATING CHANGE This Notice of occurrence of Listed Event "Notice" has been prepared to satisfy the obligations of the city of South San Francisco (the "City"), pursuant to section 5 of that certain Continuing Disclosure Certificate, dated May 3, 2006 (the "Disclosure Certificate"), executed by the Redevelopment evelopment Agency of the City of south San Francisco, in connection with the execution and delivery of the $70,675,000 Merged Redevelopment Project Tax Allocation Revenue Bonds, series 2006A (the "Bonds" ) and the requirements of Rule 15c2- of the securities Exchange Act of 1934} as amended. The following information is being provided as required by the Disclosure Certificate In order to comply with the City's obligations to notify owners of the Bonds, the participating underwriters, and the Repository itory of the occurrence of a Listed Event. On June 14, 2012, Moody's Investors Service `il ood 's" downgraded all California tax allocation bonds rated 'Ba 3' and above, As such, the Bonds' insured and underlying ratings were downgraded from `A3' to 'Bal'. According to Moody's, all California tax allocation bond ratings remain on regrew for possible withdrawal, The Debt service payment for September 1, Obligations schedule IFS} and the City County to male the payment. 2012 is approved on the City's Recognized ed has already received funds from San Mateo Information from the rating agencies regarding the ratings actions may be obtained from such rating agencies. This Notice may contain information material to Bond owners and does not purport to contain all materiel information with respect to the Bonds or the financial condition of the city. The information contained in the Notice is not guaranteed as to accuracy or completeness. CITY of SOUTH SAN FRANCISCO www.ci.ssf.ca.us J i rn Steele Director of Finance 490 Grand Avenue South San Francisco, California 94980 DISCLOSURE CONSULTANT & DISSEMINATION AGENT Wilidan Financial Services Temecula, California 92590 (951) 587-3500 www.wilidan.com 2006 Merged TARB TAR City of South Sari Francisco o2a �av o4y p�. Redevelopment Successor Agency Oversight Board a m ° Staff Report DATE July 10, 2012 TO: Members of the oversight Board OM: Marty van Duyn, Assistant City Manager SUBJECT: RESOLUTION APPROVING LEASE CRITERIA AND PROCEDURES DURES FOR 1 CHESTNUT AVENUE RECOMMENDATION Successor Agency staff recorninends that the Oversight Board provide direction and adopt a resolution approving leasing criteria, procedures for seeking bids from interested parties, and selecting a tenant for a short tenn lease for the property at 1 Chestnut Avenue. BACKGROUND/DISCUS SI N During the ,Tune 12 meeting of the oversight Board, the realtor representing the Pet Club at the Westborough Plaza requested that the Board consider leasing the building at 1 Chestnut Avenue to his client. The Pet Club is losing its lease at Westborough Plaza and would like to continue to do business in South San Francisco. The property at 1 Chestnut Avenue, popularly known as Ron Price Motors, is 1.66-acres and includes an approximately 27,000 square feet building with 99 parking spaces. The building has been used as an auto dealership since the 1970s. During the late 1990s, the building was renovated. However, the building does not comply with current building codes, such as the American. Disability Act (ADA) standards, During the meeting, the Board directed Successor Agency staff to discuss the proposal with the Successor Agency. The Board understood that staff would need to evaluate the proposal and snake recommendation, such as rents and the lease terra, based on its merits. Staff is concerned about entering into eases that would complicate or prohibit long- terra uses or disposition of the property, Therefore, staff recommends that any lease on the property be subject to . short - tern, three-year lease with a specific termination clause. The Board also questioned staff about the appropriate bidding process. Since the property is no longer subject to redevelopment lave, the Board and the City would like to create a process, such as a bidding process, to accept proposals and lease the ro p pe rty. Currently, Successor Agency staff is reviewing the optional procedures for leasing 1 Chestnut Avenue. Staff requests that the Board approve the following lease criteria: o The tenant shall receive all City permits and pay all fees prior to occupancy. o The use shall be consistent with all City codes, general plan and zoning criteria. o The tenant shall pay market rate rent subject to nominal discount for entering into a short - term lease. o As the lease is for a sh.ort�term use, the rent would not include tenant improvement runt credits. Staff report Subject: Resolution Approving Lease Criteria and Procedures for I Chestnut Avenue Page 2 o The tenant would be responsible for payment of all utilities, taxes and site maintenance. o The lease term shall be limited to three years. o The lease would not grant the tenant an option(s) to extend tenancy beyond the initial, three years; continued occupancy would be on a month -to -month basis. o The lease termination would include the ability for a developer to occupy the property and prepare for a development. o The tenant would be required to stop operating at the site following the City's notice of lease termination. o Under no circumstances would the tenant receive a right of first refusal or any other option to purchase the property. CONCLUSION The oversight Board has received an unsolicited proposal from a realto r to lease the property at 1 Chestnut Avenue to the Pet Club for a retail use. Staff is currently evaluating how Pet Club's proposal meets the criteria listed above and preparing process and procedure guidelines for leasing a former redevelopment property. Successor Agency staff is requesting that the Oversight Board provide direction and adopt a Resolution approving the criteria listed above for leasing the property at 1 Chestnut Avenue and the procedures for seeking bids from interested parties and selecting a tenant r a short term lease for 1 Chestnut Avenue. { Marty van Duyn Assistant City Manager and Bret Attachments: Resolution RESOLUTION INTO. OVERSIGHT BOARD FOR THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, STATE of CALIFORNIA RESOLUTION APPROVING LEASE CRITERIA AND PROCEDURES FOR ONE CHESTNUT AVENUE WHEREAS, the [oversight Board for the f onne r Redevelopment Agency of the City of South Sari Francisco ("Oversight Board "' may be asked to approve short term leases of property formerly owned by the Redevelopment Agency; and WHEREAS, it is appropriate for the oversight Board to have criteria and procedures for the lease of One Chestnut Avenue In the City of South San Francisco. NOW THEREFORE, BE IT RESOLVED, that the oversight Board for the former Redevelopment Agency of the City of South San Francisco hereby approves the following criteria and procedures for leasing the property at one Chestnut Avenue in the City of South San Francisco: I - The tenant shall receive all City permits and pay all fees prior to occupancy. 2. The use shall be consistent with all City codes, general plan and zoning criteria. 3. The tenant shall pay market rate gent sub sect to a nominal discount for entering into a short -term lease. 4. As the lease is for a short -term use, the rent would not include tenant improvement rent credits. 5. The tenant world be responsible for payment of all utilities, taxes and site maintenance. 6. The lease term shall be limited to three years. 7. The lease would not grant the tenant an options to extend tenancy beyond the initial three years; continued occupancy would be on a month -to -month basis. 8. The lease termination would include the ability for a developer to occupy the property and prepare for a development. 9. The tenant would be required to stop operating at the site following the City's notice of lease termination. 10. Under no circumstances would the tenant receive a right of first refusal or any other option to purchase the property. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the oversight Board of the Fom -ier Redevelopment Agency of the City of South San Francisco t special meeting held on the l opt . day of July, 2012 by the following vote: AYES; NOES: ABSTAIN: ABSENT: ATTEST. 1930478,1 City Clerk