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HomeMy WebLinkAboutOrd. 1543-2017City of South San Francisco P.O. Box 711 (City Hall, • 400 Grand Avenue) South San Francisco, CA • City Council Ordinance: ORD 1543 -2017 File Number: 17 -1044 Enactment Number: ORD 1543 -2017 ORDINANCE ADOPTING A THIRD AMENDMENT TO THE DEVELOPMENT AGREEMENT BETWEEN ALEXANDRIA REAL ESTATE EQUITIES -SAN FRANCISCO NO. 12, LLC, ALEXANDRIA REAL ESTATE EQUITIES -SAN FRANCISCO NO.44, LLC, AND ALEXANDRIA REAL ESTATE EQUITIES -SAN FRANCISCO NO.46, LLC, AND THE CITY OF SOUTH SAN FRANCISCO FOR THE OFFICE /RESEARCH & DEVELOPMENT CAMPUS AT 249 -279 EAST GRAND AVENUE. WHEREAS, pursuant to City Council Ordinance No. 1372 -2006, the City of South San Francisco ( "City ") and Alexandria Real Estate Equities (ARE) -San Francisco No. 21 LP, ARE -San Francisco No. 42 LLC, entered into a Development Agreement for the development of an office /research & development (R &D) campus at 249 -279 East Grand Avenue ( "Project "), which was effective as of August 25, 2006; and WHEREAS, the City Council certified the EIR (State Clearinghouse number 2005- 042121) for the Project on July 12, 2006, including a mitigation monitoring and reporting program and a statement of overriding considerations; and WHEREAS, ARE -San Francisco No. 12, LLC ( "ARE -SF 12 "), ARE -San Francisco No.44, LLC ( "ARE -SF 44 "), and ARE -San Francisco No.46, LLC ( "ARE -SF 46 ") (collectively known as "Owner" or "Applicant "), requested on June 24, 2013, an amendment to the Development Agreement that was adopted by the City Council as Ordinance No. 1473 -2013 ( "First Amendment "), recorded in the Official Records of the County of San Mateo as Instrument No. 2013 - 152683 on November 1, 2013, in connection a use permit modification to (i) amend the original plan set, (ii) reduce the parking ratio for the Project to 2.50 spaces per 1,000 square feet, and (iii) allow for temporary off -site parking at 213 East Grand Avenue during construction of the Phase 3 building, the Phase 4 building, and the garage, and (iv) and other modifications; and WHEREAS, On August 24, 2016, the City Council adopted Ordinance No. 1523 -2016 approving an additional amendment to the Development Agreement to extend the duration of the term from ten (10) to twelve (12) years, changing the expiration date from August 25, 2016 to August 25, 2018 ( "Second Amendment "); and WHEREAS, on April 3, 2017, Applicant submitted an application requesting an increase in floor area ratio City of South San Francisco Page 1 File Number: 17 -1044 Enactment Number: ORD 1543 -2017 (FAR) from 0.75 to 0.85 by increasing the size of the fourth (4th) building by 69,059 square feet and the height from four (4) to six (6) stories, and requesting a parking reduction to a ratio of 2.17 parking spaces/ 1,000 square feet at 249 -279 East Grand Avenue for the Project in the Business Technology Park (BTP) Zoning District, which requires approval of a third amendment to the Development Agreement ( "Third Amendment "), use permit modification, transportation demand management (TDM) plan, and design review ( "Revised Project'); and WHEREAS, environmental analysis for the Revised Project was conducted, which concluded that the environmental effects associated with construction and operation of the Revised Project are fully within the scope of the environmental analysis conducted in the 2005 EIR, such that the Revised Project does not meet the criteria under California Environmental Quality Act (CEQA) Guidelines sections 15164 or 15162 justifying preparation of a subsequent EIR and thus, an addendum is the appropriate environmental document for the Revised Project; and WHEREAS, pursuant to CEQA Guidelines section 15164, an addendum to the 2005 EIR was prepared for the Project ( "2017 Addendum ") and approved by a separate resolution of the City Council; and WHEREAS, the Design Review Board reviewed the Revised Project at its April 18, 2017 meeting, and recommended approval of the Revised Project; and WHEREAS, on August 17, 2017, the Planning Commission for the City of South San Francisco held a lawfully noticed public hearing to consider the Third Amendment and recommended that the City Council adopt an ordinance approving the Third Amendment ( "Ordinance "); and WHEREAS, on October 11, 2017, the City Council for the City of South San Francisco held a lawfully noticed public hearing to consider the Third Amendment. NOW, THEREFORE, BE IT ORDAINED that based on the entirety of the record before it, as described below, the City Council of the City of South San Francisco does hereby ordain as follows: SECTION I. FINDINGS General FindinEs The foregoing recitals are true and correct and made a part of this ordinance. The record for these proceedings, and upon which this ordinance is based, includes without limitation, federal and state law; the California Environmental Quality Act, Public Resources Code § 21000, et seq. (CEQA) and the CEQA Guidelines, 14 California Code of Regulations § 15000, et City of South San Francisco Page 2 File Number: 17 -1044 Enactment Number: ORD 1543 -2017 ; the South San Francisco General Plan and General Plan Environmental Impact Report (EIR); the South San Francisco Municipal Code; the Project applications; the EIR, including the Draft and Final EIR, mitigation monitoring and reporting program (MMRP) and statement of overriding considerations (SOC) prepared and certified for the 249 -279 East Grand Avenue Project and all appendices thereto; the 2017 EIR Addendum; all site plans, all associated documents, and all reports, minutes, and public testimony submitted as part of the Planning Commission's duly noticed August 17, 2017 meeting; and all reports, minutes, and public testimony submitted as part of the City Council's duly noticed October 11, 2017 meeting, and any other evidence (within the meaning of Public Resources Code §21080(e) and §21082.2). The modifications to the Development Agreement as proposed in the Third Amendment will not create any new significant impacts or substantially more severe impacts as compared to those already identified and analyzed in the 2005 EIR. Further, the City Council finds that there is no new information of substantial importance that demonstrates new or substantially more severe significant effects, as compared to those identified in the prior CEQA documents. Nor are any new or additional mitigation measures required to mitigate any impacts of the Revised Project. Accordingly, the City Council finds that under CEQA Guidelines section 15162, the Revised Project does not require any further CEQA review, and the 2017 Addendum, prepared pursuant to CEQA Guidelines section 15164, is the appropriate environmental document for approval of the Revised Project. The proposed Third Amendment to the Development Agreement, attached hereto as Exhibit A, is incorporated by reference and made a part of this Ordinance, as if it were set forth fully herein. The documents and other material constituting the record for these proceedings are located at the Planning Division for the City of South San Francisco, 315 Maple Avenue, South San Francisco, CA 94080, and in the custody of Planning Manager, Sailesh Mehra. Development Agreement The Owner and City have negotiated a Third Amendment to the Development Agreement pursuant to Government Code section 65864 et seq and South San Francisco Municipal Code Chapter 19.60. The Third Amendment, as proposed, is consistent with the objectives, policies, general land uses and programs specified in the South San Francisco General Plan and any applicable specific plan because the Revised Project will facilitate the development of the type of project that the General Plan contemplates in the Revised Project site area. The Development Agreement, as proposed for amendment, complies with all applicable zoning, subdivision and building regulations and with the General Plan and any applicable specific plan City of South San Francisco Page 3 File Number. 17 -1044 Enactment Number. ORD 1543 -2017 fuse under the Third Amendment, the Revised Project remains compatible with the uses authorized in, and the regulations prescribed for the land use district in which the real property is located. The site plan modifications under the Third Amendment do not in any way alter the fact that the site of the Revised Project is physically suitable for the type and intensity of the land use being proposed. The site plan modifications to the Development Agreement pursuant to the Third Amendment will facilitate the type of development that the General Plan contemplates in the Revised Project site area. Furthermore, the suitability of the site for the type of development authorized in the Third Amendment to Development Agreement was analyzed thoroughly in the original Project approvals and environmental documentation prepared for the original Project and the Revised Project. The Third Amendment does not alter the provisions of the Development Agreement and subsequent Amendments that contain the previously approved duration of the Development Agreement of twelve years, the previously- approved permitted uses of the property nor the previously specified provisions for reservation or dedication of land for public purposes. The Third Amendment to the Development Agreement states that the Project to be developed on the Property pursuant to the Development Agreement shall consist of (i) four (4) office/ R &D buildings containing approximately 584,084 square feet, which amounts to an FAR of .85 (ii) a four (4) level parking garage that will accommodate seven hundred and twenty -five (725) parking spaces, (iii) surface parking that will accommodate up to five hundred and forty-five (545) parking spaces (the total parking spaces between the garage and the surface parking results in a parking ratio of 2.17 spaces per 1,000 square feet), and (iv) related improvements. The Third Amendment to the Development Agreement states that the Project as revised will increase the height of the fourth building from four (4) to six (6) stories. SECTION II. DEVELOPMENT AGREEMENT. The City Council hereby adopts an Ordinance amending the Development Agreement to increase the size of the final building (Building 4) by 69,059 square feet, increase the number of stories from four (4) to six (6), and reduce the parking ratio from 2.50 spaces/ 1,000 square feet to 2.17 spaces/ 1,000 square feet at the site of the Revised Project, as shown in the Third Amendment attached hereto and incorporated herein as Exhibit A. All other areas of the Development Agreement that are not amended by this ordinance are not included in Exhibit A, and shall remain in full force and effect. The City Council also hereby authorizes the City Manager to enter into and execute the Third Amendment on behalf of the City Council in substantially the same form as attached hereto as Exhibit A; to make any revisions, amendments, or modifications, subject to the approval of the City Attorney, deemed necessary to carry out the intent of this ordinance and which do not materially alter or increase the City's obligations thereunder. City of South San Francisco Page 4 File Number: 17-1044 Enactment Number: ORD 1543-2017 SECTION III. SEVERABILITY. If any provision of this ordinance or the application thereof to any person or circumstance is held invalid or unconstitutional,the remainder of this ordinance, including the application of such part or provision to other persons or circumstances shall not be affected thereby and shall continue in full force and effect. To this end, provisions of this ordinance are severable. The City Council of the City of South San Francisco hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase hereof irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses, or phrases be held unconstitutional, invalid, or unenforceable. SECTION IV. PUBLICATION AND EFFECTIVE DATE. Pursuant to the provisions of Government Code Section 36933, a summary of this Ordinance shall be prepared by the City Attorney.At least five(5)days prior to the Council meeting at which this Ordinance is scheduled to be adopted, the City Clerk shall (1) publish the summary, and (2) post in the City Clerk's Office a certified copy of this Ordinance. Within fifteen (15) days after the adoption of this Ordinance, the City Clerk shall (1) publish the summary, and (2) post in the City Clerk's Office a certified copy of the full text of this Ordinance along with the names of those City Councilmembers voting for and against this Ordinance or otherwise voting. This Ordinance shall become effective thirty (30) days from and after its adoption. Introduced at a regular meeting of the City Council of the City of South San Francisco,held the 11th day of October,2017. At a meeting of the City Council on 11/8/2017, a motion was made by Liza Normandy, seconded by Richard Garbarino, that this Ordinance be adopted. The motion passed. Yes: 5 Vice Mayor Normandy, Councilmember Garbarino, Councilmember Matsumoto, Mayor Gupta, and Councilmember Addiego Attest •■ / A a ag. sta7IPPF Ili Pradeep Gupta, Mayor City of South San Francisco Page 5 1 RECORDING REQUESTED BY: City of South San Francisco Office of the City Clerk WHEN RECORDED MAIL TO: City Clerk Department City of South San Francisco PO Box 711 South San Francisco, CA 94083 APN: 015-050-440, 015-050-450 __________________________________________________________________________ (Space Above This Line For Recorder’s Use Only) THIRD AMENDMENT TO DEVELOPMENT AGREEMENT This Third Amendment to Development Agreement (“Third Amendment”) is entered into by and between ARE-San Francisco No. 12, LLC (“ARE-SF 12”), ARE-San Francisco No.44, LLC (“ARE-SF 44”), and ARE-San Francisco No.46, LLC (“ARE-SF 46”) (collectively known as “Developer”) and the CITY OF SOUTH SAN FRANCISCO, a municipal corporation (“City”), dated for reference purposes the _____ day of ________________, 2017. RECITALS A. Pursuant to the adoption of City Council Ordinance No. 1372-2006 (“DA Ordinance”), the City entered into a Development Agreement between City and ARE-SF 12 (“Original Agreement”), recorded in the Official Records of the County of San Mateo as Instrument No. 2007- 018093 CONF on February 8, 2007, for the development of an Office/R&D project consisting of 534,000 gross square feet of office/R&D uses, 5,500 gross square feet of ancillary retail, and a 4- story parking garage at 249 - 279 East Grand Avenue (“Project”). The Ordinance took effect on August 25, 2006. The Original Agreement and all of its subsequent amendments shall be referred to collectively herein as “Agreement.” B. On June 22, 2012, ARE-SF 12 transferred to ARE-SF 44 all of ARE-SF 12’s right, title, and interest in the First Transferred Parcel and, in conjunction with such transfer, (i) ARE-SF 12 assigned to ARE-SF 44 all of ARE-SF 12’s rights, interest, and obligations under the Original Agreement with respect to the First Transferred Parcel, and (ii) ARE-SF 44 assumed all of ARE-SF 12’s obligations under the Original Agreement with respect to the First Transferred Parcel, as further described in the First Amendment. C. On May 16, 2013, ARE-SF 12 transferred to ARE-SF 46 all of ARE-SF 12’s right, title, and interest in the Second Transferred Parcel and, in conjunction with such transfer, (i) ARE-SF 12 assigned to ARE-SF 46 all of ARE-SF 12’s rights, interest, and obligations under the Original Agreement with respect to the Second Transferred Parcel, and (ii) ARE-SF 46 assumed all of ARE- SF 12’s obligations under the Original Agreement with respect to the Second Transferred Parcel, as further described in the First Amendment. 2 D. On June 24, 2013, the City Council adopted Ordinance No. 1473-2013 approving an amendment to the Original Agreement (“First Amendment”), recorded in the Official Records of the County of San Mateo as Instrument No. 2013-152683 on November 1, 2013, in connection with the Use Permit Modification to (i) amend the Original Plan Set, (ii) reduce the parking ratio for the Project to 2.50 spaces per 1,000 square feet, and (iii) allow for temporary off-site parking at 213 East Grand during construction of the Phase 3 building, the Phase 4 building, and the garage. E. On August 24, 2016 the City Council adopted Ordinance No. 1523-2016 approving a second amendment to the Agreement (“Second Amendment”), recorded in the Official Records of the County of San Mateo as Instrument No. 2017-054775 on August 11, 2017, to extend the term of the Agreement from ten (10) years to twelve (12) years. F. The Developer has completed construction of three of the four entitled office /research and development buildings (addressed 249 East Grand – 269 East Grand), and desires to construct the last office /research and development building (279 East Grand) totaling approximately 202,260 square feet (208,206 gross square feet) at 279 East Grand Avenue and a four–level above-ground parking garage. G. On April 3, 2017, the Developer requested a third amendment to the Agreement (“Third Amendment”) in connection with a proposed Use Permit Modification (“Second Use Permit Modification”) to allow for an increase in FAR for the Project from 0.75 to 0.85 by increasing the size of the Phase 4 building, 279 East Grand, by 69,059 square feet (70,270 gross square feet) and the height from four (4) to six (6) stories, a parking reduction through an advanced Transportation Demand Management Plan, and other minor modifications to the Plan Set (“Project Changes”). The Project Changes are reflected in an amended plan set (“Amended Plan Set”) prepared by DGA and dated July 2017 and attached hereto as Exhibit B. H. On August 17, 2017, the Planning Commission adopted Resolution No. 2806-2017 recommending that the City Council (1) adopt an ordinance approving the Third Amendment to the Original Agreement , and (2) adopt a resolution approving the Second Use Permit Modification, a parking reduction request, a Transportation Demand Management plan, and design review to allow for the Project Changes (the “Revised Entitlements”). I. On October ----, 2017, the City Council adopted Resolution No._______ approving the Revised Entitlements. J. On October ----, 2017, the City Council considered the proposed Third Amendment and adopted Ordinance No. ________ approving the Third Amendment. NOW, THEREFORE, in consideration of the mutual covenants and promises of the parties herein contained, the City and Developer agree as follows: AMENDMENT TO AGREEMENT 1. Recitals. The foregoing recitals are true and correct and hereby incorporated herein. 2. Effective Date of Third Amendment. Pursuant to Section 19.60.140 of the South San Francisco Municipal Code, this Third Amendment shall be effective from and after the date 3 that the ordinance approving this Third Amendment takes effect (“Third Amendment Effective Date”). 3. Defined Terms. As of the Third Amendment Effective Date, (i) the term “Agreement”, as used in the Original Agreement and/or this Third Amendment, shall mean the Original Agreement, as amended by the First Amendment, the Second Amendment, and this Third Amendment, (ii) the term “Use Permit”, as used in the Original Agreement and/ or this Third Amendment , shall mean the Original Use Permit, as amended by the Use Permit Modification, and as subsequently amended by the Second Use Permit Modification, and (iii) the term “Plan Set”, as used in the Original Agreement and/or this Third Amendment shall mean the Original Plan Set, as amended by the Supplemental Plan Set, as subsequently amended by the Amended Plan Set. All capitalized terms not defined herein shall have the meanings ascribed to them in the Agreement. 4. Modification of Project Description and Selected Standards For Project. In accordance with the Second Use Permit Modification and the Amended Plan Set : a) The first paragraph of Section 3 of the Agreement shall be amended so that the Project shall consist of four (4) 3- to 6-story office /research and development buildings totaling approximately 584,084 square feet (610,270 gross square feet), a 4–level above - ground parking garage, and related improvements, as provided in the Plan Set, as amended by the Supplemental Plan Set and Amended Plan Set, as approved by the City Council. b) The required parking ratio for all uses in the Project shall be 2.17 parking spaces per 1, 000 square feet of floor area (2.06 spaces/1,000 gross square feet); provided, however, that Owner may elect, in its sole discretion, to increase the required parking ratio up to, but not more than, 2.50 parking spaces per 1,000 square feet, by (i) giving the City written notice of such election at least sixty (60) days before the increase in the parking ratio is to become effective and (ii) by submitting evidence satisfactory to the City that such increase is consistent with the Transportation Demand Management (TDM) plan. c) During construction of the Phase 4 building, construction of the Garage, and construction of the remainder of the Project, Developer shall provide valet parking for the Phase 1, 2, and 3 buildings to the extent reasonably necessary to compensate for any parking deficiency caused by such construction. The requirements of the foregoing sentence shall supersede Section 3(c)(2) of the First Amendment. 5. Vesting of Approvals. Upon the City’s approval of each of the Revised Entitlements and this Third Amendment, such approvals shall vest in Owner and its successors and assigns as provided in Section 5 of the Original Agreement. 6. Section 12. Section 12 of the Agreement is hereby amended to add new Section 12(e) as follows: (e) Fire & Life Safety Contribution. Owner shall contribute a one-time Fire & Life Safety contribution to the City in the amount of five dollars ($5.00) per sq. ft. for the increase in building size of 69,059 sq. ft. as authorized by the Second Use 4 Permit Modification, for a total amount of Three Hundred Forty Five Thousand and Two Hundred and Ninety Five dollars ($345,295), to be paid prior to issuance of the Certificate of Occupancy for the Phase 4 building . 7. Section 9. Section 9 of the Agreement is hereby amended to read as follows with additions in double underline and deletions in strikethough: Exhibit A — Original Legal Description of Property Exhibit B —Current Legal Description of Property Exhibit C — Legal Description of First Transferred Parcel Exhibit D — Legal Description of Second Transferred Parcel Exhibit E — Legal Description of Trail Corridor Exhibit F— Use Permit Modification / Supplemental Plan Set / Conditions of Approval Exhibit F-1 – Amended Plan Set (dated July 2017) 8. Exhibits. The Agreement is hereby amended to add the Amended Plan Set, which is attached hereto as Exhibit B and shall be known as Exhibit F-1 to the Agreement. 9. Effect of Third Amendment. Except as expressly modified by this Third Amendment, the Agreement shall continue in full force and effect according to its terms, and Developer and City hereby ratify and affirm all their respective rights and obligations under the Agreement, including but not limited to Developer’s indemnification obligations as set forth in Section 13 of the Original Agreement. In the event of any conflict between this Third Amendment or the Original Agreement, as amended by the First Amendment and/or the Second Amendment, the provisions of this Third Amendment shall govern. 10. Binding Agreement. This Third Amendment shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, and assigns of each of the parties hereto. Any reference in this Third Amendment to a specifically named party shall be deemed to apply to any successor, administrator, executor, or assign of such party who has acquired an interest in compliance with the terms of this Third Amendment or under law. 11. Recordation. The City shall record a copy of this Third Amendment within ten (10) days following execution by all parties. 12. Counterparts. This Third Amendment may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, when taken together, shall constitute the same document. 13. California Law. This Third Amendment shall be governed by and interpreted in accordance with the laws of the State of California. 5 14. Invalidity. Any provision of this Third Amendment that is determined by a court of competent jurisdiction to be invalid or unenforceable shall be deemed severed from this Third Amendment, and the remaining provisions shall remain in full force and effect as if the invalid or unenforceable provision had not been a part hereof 15. Headings. The headings used in this Third Amendment are for convenience only and shall be disregarded in interpreting the substantive provisions of this Third Amendment. IN WITNESS WHEREOF, this Third Amendment has been entered into by and between Developer and City as of the date and year first above written. [SIGNATURES ON THE FOLLOWING PAGE] 6 CITY OF SOUTH SAN FRANCISCO By: By: Name: Name: Title: Title: Date: Date: ARE-SAN FRANCISCO NO. 12, LLC, a Delaware limited liability company By: Alexandria Real Estate Equities, L.P., a Delaware limited partnership, Managing Member By: ARE-QRS CORP., a Maryland corporation, General Partner By: ______________________________________________________________ Name: ____________________________________________________________ Title: _____________________________________________________________ Date: _____________________________________________________________ ARE-SAN FRANCISCO NO. 44, LLC, a Delaware limited liability company By: Alexandria Real Estate Equities, L.P., a Delaware limited partnership, Managing Member By: ARE-QRS CORP., a Maryland corporation, General Partner By: ______________________________________________________________ Name: ____________________________________________________________ Title: _____________________________________________________________ Date: _____________________________________________________________ 7 ARE-SAN FRANCISCO NO. 46, LLC, a Delaware limited liability company By: Alexandria Real Estate Equities, L.P., a Delaware limited partnership, Managing Member By: ARE-QRS CORP., a Maryland corporation, General Partner By: ______________________________________________________________ Name: ____________________________________________________________ Title: _____________________________________________________________ Date: _____________________________________________________________ APPROVED AS TO FORM: By: ___________________ Jason Rosenberg, City Attorney ATTEST: By: ____________________ Krista J. Martinelli, City Clerk 8 EXHIBIT A Legal Description 9 Exhibit B Amended Plan Set 2871419.1