HomeMy WebLinkAboutReso 101-2018 (18-546)City of South San Francisco P.O. Box 711 (City Hall,
400 Grand Avenue)
South San Francisco, CA
City Council
Resolution: RES 101 -2018
File Number: 18 -546 Enactment Number: RES 101 -2018
RESOLUTION APPROVING AN AFFORDABLE HOUSING
AGREEMENT AND THE FIRST AMENDMENT TO THE
DISPOSITION AND DEVELOPMENT AGREEMENT WITH
HISENSE REAL ESTATE USA FOR THE DEVELOPMENT OF THE
PROPERTIES LOCATED AT 200 LINDEN AND 212 -216 BADEN
AVENUE, AND AUTHORIZING THE CITY MANAGER TO
EXECUTE THE AGREEMENTS.
WHEREAS, on June 29, 2011, the Legislature of the State of California ( "State ") adopted Assembly Bill
xl 26 ( "AB 26 "), which amended provisions of the State's Community Redevelopment Law (Health and
Safety Code sections 33000 et seq.) ( "Dissolution Law "), pursuant to which the former Redevelopment
Agency of the City of South San Francisco ( "City ") was dissolved on February 1, 2012; and
WHEREAS, the City elected to become the Successor Agency to the Redevelopment Agency of the City
of South San Francisco ( "Successor Agency "); and
WHEREAS, pursuant to Health and Safety Code Section 34191.5(c)(2)(C), property shall not be
transferred to a successor agency, city, county or city and county, unless a Long Range Property
Management Plan ( "LRPMP ") has been approved by the Oversight Board and the California Department
of Finance ( "DOF "); and
WHEREAS, in accordance with the Dissolution Law, the Successor Agency prepared a LRPMP, which
was approved by a resolution of the Oversight Board for the Successor Agency to the Redevelopment
Agency of the City of South San Francisco ( "Oversight Board ") on May 21, 2015, and was approved by
the DOF on October 1, 2015; and
WHEREAS, consistent with the Dissolution Law and the LRPMP, certain real properties located in the
City of South San Francisco, that were previously owned by the former Redevelopment Agency was
transferred to the Successor Agency ( "Agency Properties "); and
WHEREAS, on October 18, 2016, the City entered into an Amended and Restated Master Agreement for
Taxing Entity Compensation ( "Compensation Agreement ") with the various local agencies who receive
shares of property tax revenues from the former redevelopment project area ( "Taxing Entities "), which
provides that upon approval by the Oversight Board of the sale price, and consistent with the LRPMP,
the proceeds from the sale of any of the Agency Properties will be distributed to the Taxing Entities in
accordance with their proportionate contributions to the Real Property Tax Trust Fund for the former
Redevelopment Agency; and
City of South San Francisco Page I
File Number: 18 -546
Enactment Number. RES 101 -2018
WHEREAS, on February 8, 2017, the City adopted Resolution 16 -2017 approving the transfer of the
agency properties from the Successor Agency to the City and in accordance with the requirements set
forth in the LRPMP, and on February 21, 2017, the Oversight Board adopted a resolution approving the
transfer of the redevelopment properties from the Successor Agency to the City; and
WHEREAS, consistent with the LRPMP and the Oversight Board resolution, the Successor Agency and
City executed and recorded grant deeds transferring the agency properties to the City; and
WHEREAS, the real property located at 200 Linden Avenue and 212 - 216 Baden Avenue ("200
Linden ") located in the City of South San Francisco, California, known as assessor parcel Numbers
( "APNs ") 012334130, 012334160, 012334030 and 012334040 are agency properties and are subject to
the provisions of the LRPMP and the Compensation Agreement; and
WHEREAS, the City Council selected Hisense REUS, LLC ( "Developer ") to develop the properties
located at 200 Linden in a manner consistent with the LRPMP; and
WHEREAS, on September 6, 2017, the City Council approved a Disposition and Development
Agreement ( "DDA ") between the City and the Developer; and
WHEREAS, on September 19, 2017, the Oversight Board approved the sale price contained within the
DDA; and
WHEREAS, the DDA was executed and became effective on October 5, 2017; and
WHEREAS, the Developer, citing escalating construction costs, payment of prevailing wage, and
inclusion of the Below Market Rate (`BMR ") units, have requested various financial concessions from
the City totaling $741,669 and a $450,000 reduction in the sale price, requiring City Council approval of
the Affordable Housing Agreement and the First Amendment to the Disposition and Development
Agreement; and
WHEREAS, the Oversight Board adopted a resolution approving the reduced sale price of $3,050,000 at
its regular meeting on June 19, 2018.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that
the City Council does hereby resolve as follows:
The foregoing recitals are true and correct and made a part of this Resolution.
The proposed actions in this Resolution are consistent with the Long Range Property Management Plan.
The First Amendment to the Disposition and Development Agreement, attached hereto as Exhibit A and
incorporated herein, is hereby approved.
City of South San Francisco Page 2
File Number. 18 -546 Enactment Number., RES 101 -2018
The City Manager, or his designee, is authorized to execute the First Amendment to the Disposition and
Development Agreement, attached hereto as Exhibit A and incorporated herein, and execute any
necessary documents related to the First Amendment to the Disposition and Development Agreement.
The Affordable Housing Agreement, attached hereto as Exhibit B and incorporated herein, is hereby
approved.
The City Manager, or his designee, is authorized to execute the Affordable Housing Agreement, attached
hereto as Exhibit B and incorporated herein, and execute any necessary documents related to the
Affordable Housing Agreement.
The City Manager, or his designee, is authorized take any and all other actions necessary to implement
this intent of this Resolution, subject to approval as to form by the City Attorney.
At a meeting of the City Council on 6/27/2018, a motion was made by Richard Garbarino, seconded by Karyl
Matsumoto, that this Resolution be adopted. The motion passed.
Yes: 5 Mayor Normandy, Mayor Pro Tem Matsumoto, Councilmember Garbarino,
Councilmember Gupta, and Councilmember Addiego
Attest by -
K sta artine
City of South San Francisco Page 3
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FIRST AMENDMENT
TO DISPOSITION AND DEVELOPMENT AGREEMENT
This First Amendment to Disposition and Development Agreement (“First
Amendment”) is entered into effective as of ____________, 2018 (“Effective Date”) by and
between the City of South San Francisco, a municipal corporation (“City”) and Hisense REUS,
LLC, a California limited liability company (“Developer”). City and Developer are hereinafter
collectively referred to as the “Parties.”
RECITALS
A. The City of South San Francisco is the owner of certain real property located in
the City of South San Francisco, California, known as County Assessor’s Parcel Numbers
(“APN”) 012-334-130 (200 Linden Avenue), 012-334-160 (216 Baden Avenue), 012-334-040
and 012-334-030 (212 Baden Avenue), as more particularly described in Exhibit A to the DDA
(the “Property”).
B. On September 6, 2017, the City Council adopted Resolution No. 104a-2017,
approving a Disposition and Development Agreement between the City and Hisense REUS, LLC
(“DDA”) for the development of 97 residential condominium units and approximately 6,,200
square feet of commercial retail space on the Property (“Project”), as more specifically
described in the Project entitlements.
C. On May 11, 2018, Developer requested amendments to the DDA.
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. Defined Terms. All capitalized terms not defined herein shall have the meanings
ascribed to them in the DDA.
3. Section 3.2. Section 3.2 of the DDA is hereby amended to read as follows with
additions in double underline and deletions in strikethough:
3.2 Purchase Price. City agrees to sell the Property to Developer for the sum of Three
Million, Five Hundred Thousand Dollars ($3,500,000) Three Million, and Fifty
Thousand Dollars ($3,050,000) (the Purchase Price”).
4. Section 5.1. Section 5.1 of the DDA is hereby amended to read as follows with
additions in double underline and deletions in strikethrough:
5.1 Development Schedule. Subject to Section 11.2, Developer shall commence
construction of the Project within sixty (60) days following conveyance of the Property
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to Developer, and in no event later than June 30, 2018 October 31, 2018 , and
shall diligently prosecute to completion the construction of the Project. Each party shall
use diligent and commercially reasonable efforts to perform the obligations to be
performed by such party pursuant to this Agreement within the times periods set forth
herein, and if no such time is provided, within a reasonable time, designed to permit
issuance of a final certificate of occupancy for the Project by the date specified in
Exhibit D. Subject to Section 11.2 and the City’s issuance of permits and approvals,
Developer’s failure to commence or complete the Project in accordance with the time
periods specified in this Section 5.1 shall be an Event of Default hereunder.
5. Section 5.17. Section 5.17 of the DDA is hereby amended to read as follows with
additions in double underline and deletions in strikethrough:
5.17 Performance and Payment Bonds. Prior to Close of Escrow commencement of
construction work on the Project, Developer shall provide, or cause its general contractor
to deliver, to the City copies of payment bond(s) and performance bond(s) issued by a
reputable insurance company licensed to do business in California, each in a penal sum
of not less than one hundred percent (100%) of the scheduled cost of construction of the
Project pursuant to the Construction Contract to be executed by Developer. The bonds
shall name the City as co-obligee. In lieu of such performance and payment bonds,
subject to City’s approval of the form and substance thereof, Developer may submit
evidence satisfactory to the City one of the following:
5.17.1. Developer shall cause its general contractor to provide evidence of
Subcontractor Default Insurance covering one hundred percent (100%) of the Project
subcontract value. Contractor shall require those Subcontractors that do not enroll in the
Subcontractor Default Insurance Policy to furnish payment bond(s) and performance
bond(s) in forms acceptable to and approved by the City. General Contractor shall
schedule the City and Developer to the Subcontractor Default Insurance policy via a
Scheduled Entity Endorsement; or
5.17.2. The contractor’s ability to commence and complete construction of
the Project in the form of an irrevocable letter of credit, pledge of cash deposit,
certificate of deposit, or other marketable securities held by a broker or other financial
institution, with signature authority of the City required for any withdrawal, or a
completion guaranty in a form and from a guarantor acceptable to City. Such evidence
must be submitted to City in approvable form in sufficient time to allow for review and
approval prior to the scheduled construction start date.
6. Effect of First Amendment. Except as expressly modified by this First Amendment,
the DDA 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 DDA,
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including but not limited to Developer’s indemnification obligations as set forth in
Section 10.1 of the DDA. In the event of any conflict between the First Amendment or
the DDA, the provisions of this First Amendment shall govern.
7. Binding Agreement. This First 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 First 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 First
Amendment or under law.
8. Counterparts. This First 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.
9. California Law. This First Amendment shall be governed by and interpreted in
accordance with the laws of the State of California.
10. Invalidity. Any provision of this First Amendment that is determined by a court of
competent jurisdiction to be invalid or unenforceable shall be deemed severed from this
First 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
11. Headings. The headings used in this First Amendment are for convenience only and
shall be disregarded in interpreting the substantive provisions of this First Amendment.
IN WITNESS WHEREOF, this First 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]
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CITY
By: _________________________
City Manager
ATTEST:
By: ___________________________
City Clerk
APPROVED AS TO FORM:
By: ___________________________
City Attorney
DEVELOPER:
Hisense REUS LLC,
a California limited liability company
By: __________________________
Its: Managing Member
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
City of South San Francisco
400 Grand Avenue
San Francisco, CA 94080
Attn: Community Development Department
EXCEPTION FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
(Space Above This Line for Recorder’s Use)
AFFORDABLE HOUSING AGREEMENT
FOR BELOW MARKET RATE PROPERTY
This Affordable Housing Agreement for Below Market Rate Property (“Agreement”) is
entered into as of this _____ day of _____________, 2018, by and between the City of South San
Francisco (“City”) and Hisense REUS LLC (“Developer”). City and Developer are hereinafter
collectively referred to as the “Parties.”
RECITALS
WHEREAS, Chapter 20.380 of the South San Francisco Municipal Code sets forth the
requirements for Inclusionary Housing (“Inclusionary Housing Ordinance”); and
WHEREAS, the Developer is, or will become, the fee simple owner of that certain real
property (“Property”) located in the City of South San Francisco, State of California, and more
particularly described in Exhibit A attached hereto; and
WHEREAS, the Developer intends to construct ninety-seven (97) for-sale housing units
and approximately 6,200 square feet of commercial retail space (the “Project”) on the Property
and has submitted site development plans for the Project; and
WHEREAS, twenty percent (20%) of the base units will be below market rate at eighty
percent (80%) area median income pursuant to the state Density Bonus Law in Section 65915 of
the California Government Code; and
WHEREAS, as a condition of development of the Project, Developer must comply with
the City of South San Francisco’s housing policies and programs as set forth in the City’s
Inclusionary Housing Ordinance, as it applies to the provision of affordable housing; and
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WHEREAS, pursuant to Section 20.380.010 of the Municipal Code, the City shall consider
making offsets available to developers when necessary to enable residential projects to provide a
preferable product type or affordability in excess of the requirements of Chapter 20.380 of the
Municipal Code; and
WHEREAS, the development of for-sale Below Market Rate housing units at the proposed
level of affordability is a preferable product type as stated within the City’s housing element of the
General Plan and based on the current housing needs within the City; and
WHEREAS, the City has evaluated and determined that an offset for the Below Market
Rate in-lieu fee obligation for the four-tenths (0.4) proportionate amount of the fractional unit
required is an effective means of achieving preferable for-sale Below Market Rate housing units;
and
WHEREAS, the City has also evaluated and determined that a twenty percent (20%)
reduction in building permit fees is reasonable and justified as an additional offset because a
corresponding percentage of preferable for-sale Below Market Rate housing units will be
provided; and
WHEREAS, the Developer and City agree to adhere to the schedule and terms as set forth
in the Below Market Rate Sale Terms and Conditions, and more particularly described in Exhibit
D attached hereto; and
WHEREAS, the Developer proposes meeting these requirements by selling the required
number of Below Market Rate Units (defined below).
NOW THEREFORE, the City and the Developer agree as follows:
AGREEMENT
1. As a condition of developing and constructing ninety-seven (97) condominium
housing units on the Property, Developer shall designate nineteen (19) units in the Project as Below
Market Rate Units and shall make the units available for sale as a Below Market Rate Units (the
“Below Market Rate Units”). The number of Below Market Rate Units shall be equal to twenty
percent (20%) of the total number of condominiums to be built upon the Property and identified
in Exhibit B. The Below Market Rate Units shall be affordable to Low- and Moderate-income
level households (“Eligible Income Households”) guaranteed by deed restrictions or other
enforceable covenants running with the land. Developer shall sell:
(i) Fifteen (15) one-bedroom housing units in the Project to a household whose
annual gross income does not exceed eighty percent (80%) of the unadjusted median
income (“Low-Income Household”) for San Mateo County as published by the State of
California annually, pursuant to California Code of Regulations, Title 25, Section 6932;
(ii) Four (4) two-bedroom units in the Project to a household whose annual
gross income does not exceed one hundred and twenty percent (120%) of the unadjusted
median income (“Moderate-Income Household”);
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2. Developer shall price the Below Market Rate Units in accordance with the terms
and conditions outlined in Exhibit D.
3. Occupancy of the Below Market Rate Units shall be established concurrently with
occupancy of the market rate units located in the Project. This requirement shall be effective as of
the date the first unit is occupied in the Project. This requirement for the Below Market Rate Units
shall remain in effect even in the event all market rate units in the Project become unoccupied.
4. Developer shall require the buyer of the Below Market Rate Units to execute a
Resale Restriction and Option to Purchase Agreement (“Resale Restriction Agreement”), an
Excess Sale Proceeds Promissory Note (“Promissory Note”), and a Performance Deed of Trust
(“Deed of Trust”) substantially in the form attached hereto as Exhibit C (collectively, the “Resale
Restriction Documents”). The Resale Restriction Documents shall be recorded against the parcel
containing the Below Market Rate Units upon close of escrow of sale for such Below Market Rate
Units. The Below Market Rate Units shall remain restricted and affordable to Eligible Income
Households for a term of fifty-five (55) years, commencing on the date each of the Below Market
Rate Units are sold. The restrictions shall apply to all subsequent buyers.
5. Developer shall sell the Below Market Rate Units to an Eligible Income Household
pursuant to Section III of Exhibit D. Developer shall work with the City and/or the City’s Housing
Administrator to identify and qualify eligible buyers for said units. At the time of sale, Developer
shall pay an administrative fee to reimburse the City for all administrative and processing costs
and fees incurred in processing the sale of the Below Market Rate Unit, which may include the
City’s Housing Administrator fees.
6. The Below Market Rate Units shall remain owner-occupied units as enforced by
the City through the Resale Restriction Agreement.
7. The City shall provide Developer with an offset under Section 20.380.010 of the
Municipal Code related to the Below Market Rate in-lieu fee obligation. The City will reduce by
eighty percent (80%) the in-lieu fee obligation, equal to the amount of two-hundred and six
thousand dollars ($206,000) for providing preferable for-sale Below Market Rate housing units.
The total fee now due is fifty four thousand dollars ($54,000).
8. The City shall provide Developer with an offset under Section 20.380.010 of the
Municipal Code related to the building permit fee obligations. The City will reduce by twenty
percent (20%) the building permit fee obligation, equal to an amount not to exceed one hundred
and forty-six thousand dollars ($146,000) for providing preferable for-sale Below Market Rate
housing units.
9. Developer shall indemnify, defend with counsel selected by the City in consultation
with Developer, and hold harmless the City and its officials, officers, employees, agents, and
volunteers from and against any and all losses, liability, claims, suits, actions, damages, and causes
of action arising or allegedly arising out of or relating in any manner to Developer’s performance
or nonperformance under this Agreement, except to the extent arising from the gross negligence
or willful misconduct of the City. The provisions of this section shall survive the expiration or
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other termination of this Agreement or any release of part or all of the Property from the burdens
of this Agreement.
10. Developer shall reimburse the City for all administrative/processing costs and fees
incurred in processing the Agreement, which may include reasonable attorney’s fees and cost, and
implementing the requirements of the Inclusionary Housing Ordinance.
11. Developer hereby subjects the Property to the covenants, conditions and restrictions
set forth in this Agreement. The Parties hereby declare their express intent that all such covenants,
conditions and restrictions shall be deemed covenants running with the land and shall pass to and
be binding upon Developer’s successors in title to the Property. All covenants without regard to
technical classification or designation shall be binding for the benefit of the City, and such
covenants shall run in favor of the City. Each and every contract, deed or other instrument hereafter
executed applicable to or conveying the Property or any portion thereof shall conclusively be held
to have been executed, delivered and accepted subject to such covenants, conditions and
restrictions, regardless of whether such covenants, conditions and restrictions are set forth in such
contract, deed or other instrument. This Agreement shall be recorded on the Property upon final
map recordation or, if a map is not being processed, prior to the issuance of building permits for
the Property.
12. Prior to the sale of the Below Market Rate Units to an Eligible Income Household,
the Developer may not transfer the whole or any part of the Property, the Project or this Agreement
unless (i) such transfer is to a limited liability company or limited partnership or corporation
formed for purposes of carrying out the Project and which takes title to the Property, (ii) the
Developer first notifies the City of the proposed transfer or assignment and delivers to the City the
organizational documents of the transferee or assignee (the "Transferee"), and (iii) the Developer
causes the Transferee to execute an agreement, in form and substance approved in writing by the
City, accepting and assuming (and releasing Developer from) the obligations of the Developer
under this Agreement.
Developer shall reimburse City for all City costs, including but not limited to reasonable attorneys’
fees, incurred in reviewing instruments and other legal documents proposed to effect a permitted
transfer or assignment under this Agreement within ten (10) days following City’s delivery of an
invoice detailing such costs.
13. Provided that Developer has complied with all of the terms and conditions set forth
herein, upon the sale by Developer of the Below Market Rate Units, Developer shall be released
from, and shall have no further obligations under this Agreement. Such release shall be effective
upon the sale and shall not require any further action or documentation by any party to this
Agreement.
14. Any amendments to this Agreement shall be processed in the same manner as an
original application for approval pursuant to Section 20.380.014 of the South San Francisco
Municipal Code. Nothing, however, shall prevent the body granting final approval of the project
development, from modifying the location and phasing of the Below Market Rate Units as a
condition of approval for the Project.
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15. The laws of the State of California shall govern this Agreement without regard to
principles of conflicts of laws. In the event that either party brings any action against the other
under this Agreement, the parties agree that trial of such action shall be vested exclusively in the
state courts of California in the County of San Mateo or in the United States District Court for the
Northern District of California.
16. If a party to this Agreement brings any action, including an action for declaratory
relief, to enforce or interpret the provision of this Agreement, the prevailing party shall be entitled
to reasonable attorneys’ fees in addition to any other relief to which that party may be entitled.
The court may set such fees in the same action or in a separate action brought for that purpose.
17. If a court of competent jurisdiction finds or rules that any provision of this
Agreement is invalid, void, or unenforceable, the provisions of this Agreement not so adjudged
shall remain in full force and effect. The invalidity in whole or in part of any provision of this
Agreement shall not void or affect the validity of any other provision of this Agreement.
18. Any notice or demand shall be made by certified or registered mail, return receipt
requested, or reliable overnight courier to the address of the respective parties set forth below:
Developer: ______________________________
______________________________
______________________________
City: City of South San Francisco – Community Development Director
400 Grand Avenue
South San Francisco, CA 94080
19. Notwithstanding any previous provision of this Agreement, the terms of this
Agreement shall be interpreted in accordance with the provisions of Chapter 20.380 of the South
San Francisco Municipal Code.
SIGNATURES ON FOLLOWING PAGE.
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IN WITNESS THEREOF, the parties have executed this Agreement as of the date first written
above.
DEVELOPER :
By: ________________________________
Name Printed: _______________________
Its: _________________________________
CITY:
CITY OF SOUTH SAN FRANCISCO
By: ___________________________
Mike Futrell
City Manager
APPROVED AS TO FORM:
______________________________
Jason Rosenberg, City Attorney
SIGNATURES MUST BE NOTARIZED
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Exhibit A
Legal Description
PROPERTY
The land referred to is situated in the County of San Mateo, City of South San Francisco, State of
California, and is described as follows:
200 Linden Avenue
Parcel One:
Lots 11, 12, 13 and 14 in Block 140, as shown on that certain Map entitled "South San
Francisco, San Mateo Co. Cal., Plat No. 1", filed for record in the office of the County Recorder
of San Mateo County on March 1, 1892 in Book "B" of Maps, at Page 6, and copied into Book 2
of Maps at Page 52.
APN: 012-334-130
JPN: 012-033-334-13
Parcel Two:
Lots 9 and 10 in Block 140, as shown on that certain Map entitled "South San Francisco San
Mateo Co. Cal. Plat No. 1", filed in the office of the County Recorder of San Mateo County,
State of California, on March 1, 1892, in Book "B" of Maps, at Page 6 and copied into Book 2 of
Maps, at Page 52.
Joint Plant Nos. 012-033-334-13A
012-033-334-16A
APN: 012-334-160
JPN: 012-033-334-16
212 Baden Avenue
Lots 6 and 7, Block 140, as delineated upon that certain Map entitled "South San Francisco, San
Mateo County, California", filed for record in the office of the Recorder of the County of San
Mateo, State of California, on March 1st, 1892 in Book "B" of Maps, at Page 6, and a copy
entered in Book 2 of Maps at Page 52.
APN: 012-334-040
JPN: 012-033-334-04
216 Baden Avenue
Lot 8, Block 140, as delineated upon that certain Map entitled "South San Francisco, San Mateo
County, California", filed for record in the office of the Recorder of the County of San Mateo,
State of California, on March 1st, 1892 in Book "B" of Maps, at Page 6, and a copy entered in
Book 2 of Maps at Page 52.
APN: 012-334-030
JPN: 012-033-334-03
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Exhibit B
BMR Units Plan
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Exhibit C
Form of Resale Restriction Documents
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Exhibit D
Below Market Rate Sale Terms and Condition
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BELOW MARKET RATE SALE TERMS AND CONDITIONS
200 LINDEN AVENUE, SOUTH SAN FRANCISCO
Definitions and Key Terms
Administrator – the Developer may assign a designated BMR Program Administrator.
Applicant – household applying to secure eligibility and participate in the purchase of a BMR unit.
AMI – Area Median Income.
BMR – Below Market Rate.
CDHCD – California Department of Housing and Community Development.
City – City of South San Francisco.
City Resident – Currently living in the City of South San Francisco, or no longer lives in the City but
has lived in the City within the last 5 years.
City Worker – currently works in the City for 19 hours a week or more.
COO – Certificate of Occupancy.
Developer – Hisense REUS LLC.
Eligible Applicant or Household – individual or household who has received an eligibility
determination to participate in the lottery and/or purchase of a BMR unit.
First-time homebuyer – a buyer who has never owned a home, or has previously owned a home
but sold it 3 or more years ago.
HHS – Household Size.
Lottery – the placement of all eligible homebuyer applicants into a lottery to draw a purchase
priority.
Lottery Winner – eligible applicant chosen through lottery process.
Notice of Intent – notice of intent to sell the BMR units which is delivered by the developer to the
City.
Project – 200 Linden Avenue, South San Francisco.
I. Number of Units and Mix
The BMR units must be similar to market rate units in size and construction, and evenly distributed
throughout the development. Table 1 provides the BMR unit mix for the project.
Table 1
Bedrooms Number of Units Share of Total Average Sq. Ft.
1 15 79% 772
2 4 21% 1,047
TOTAL 19
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Further, the BMR units will be distributed by AMI levels, as described in Table 2.
Table 2
Bedroom Size 1 2
Income Designation Low Moderate
Unit count designated 15 4
AMI Allowance – pricing 70% 110%
AMI Allowance – eligibility 80% 120%
II. Minimum Household Size
The minimum occupancy allowance for the BMR units is depicted in Table 3.
*Exception may be given for live-in help.
III. Pricing
a. Household Size
Household sizes assumed for pricing the BMR are:
two (2) person household for one (1) bedroom units and
three (3) person household for two bedroom units.
b. Area Median Income
Area median income (AMI) is defined as the median household income for San Mateo County as published
by the State of California annually, pursuant to California Code of Regulations, Title 25, Section 6932. The
low income units will be priced assuming household income equal to 70% AMI. Households earning up to
80% AMI will be eligible for low income units. Similarly, the moderate income units will be priced
assuming household income equal to 110% AMI. Households earning up to 120% AMI will be eligible for
moderate income units. The AMI thresholds for pricing and eligibility for the BMR units are illustrated in
Table 4.
Table 4
Income Level Low Moderate
AMI Threshold – pricing 70% 110%
AMI Threshold – eligibility 80% 120%
Assumed incomes (for pricing) and maximum incomes (for eligibility) are calculated by multiplying the
AMI for each assumed household size by the targeted income. For example, the AMI for a household of
Table 3
Bedroom Size 1 2
Minimum occupancy 1 2*
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two in 2017 is $92,250. To calculate 70% AMI, $92,250 is multiplied by 70%, which results in an assumed
household income of $64,575 for pricing the low income one-bedroom units.
Table 5
Bedroom size 1 1 2 2
Household size 2 2 3 3
Unit Pricing AMI Max as% 70% 110% 70% 110%
Unit Pricing AMI Max as $ $64,575 $101,475 $72,625 $114,125
Buyer Purchase AMI Max as % 80% 120% 80% 120%
Buyer Purchase AMI Max as $ $73,800 $110,700 $83,000 $124,500
The AMI will be reviewed and adjusted for the pricing calculation at the time the City provides the
Developer a Certificate of Occupancy for the project or project phase. Pricing shall only be adjusted once
within a 12 month period, or if there is a change in AMI.
a. BMR Unit Pricing Parameters
The parameters for determining the deed restricted sales price of a BMR are represented below.
I. Interest Rate
II. Mortgage Term
III. Down payment %
IV. AMI Levels
V. Amount of Income available for housing
VI. Fees and Insurance (property tax, condo fees, property and hazard insurance, PMI)
VII. Utility allowance based on allowance schedule published annually by the San Mateo
County Department of Housing
b. Adjusting the Pricing at Time of Delivery of Units
Final pricing will be determined closer to delivering the units to market according to the following
protocol.
The Developer will work with the City to determine the sales of the BMR units ninety (90) days
prior to receiving a Certificate of Occupancy from the City.
The City shall approve and confirm adjustments to the BMR sales price, if any, within 10 Days of
developer receiving the Certificate of Occupancy.
Pricing will be adjusted to be consistent with the agreed upon parameters of the pricing formula
including adjustments, if any, to the Home Owners Association fees.
Pricing can be adjusted within a 12 month duration from the initial date that sales of the BMR
commence.
IV. Marketing and Outreach
Outreach and sales implementation activities should be executed to meet all Equal Housing Opportunity
requirements and in compliance with Fair Housing Laws. General conventions adhered to in executing
outreach and sales efforts will include:
A Form of Resale Restriction and Option to Purchase
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All outreach and marketing activity will be conducted without regard to race, color, national
origin, sex, religion, familial status or disability.
Outreach, intake, and screening function will be rendered in a fashion to assure long term
preservation of the BMR units; accordingly, procedures will be adopted to minimize defaults for
prospective homebuyers.
Fair and equitable protocols to assure the greatest level of representation and fairness in working
with all interested and prospective homebuyers.
Assure the delivery and adherence of City’s program objectives and guidelines when promoting
and executing the sale of the BMR units.
a. Administrator
The Developer shall contract with an experienced Below Market Rate consultant to act as the Developer’s
Program Administrator.
b. BMR Homebuyer Priorities
The Developer has structured a priority scoring preference system to use in concert with a lottery
selection process. Any household member on title is eligible to count toward meeting a priority
parameter. The priority structure will be as follows.
Purchase Priority Parameters
Lives in South San Francisco 10
Works in South San Francisco 10
First time homebuyer 10
Total points 30
c. Outreach Efforts
The outreach efforts listed below must begin 90 days prior to conducting a lottery for the BMR units.
Developer will place the BMR units on the San Mateo Counties Association of Realtor (SAMCAR)
Multiple Listing Service.
Developer will provide City with project and lottery information, which will be posted on the City’s
website.
Developer will create a website to promote and inform the public about the BMR information,
lottery timelines, open houses, and availability of the units.
Regional BMR unit homeownership workshop.
Press releases will be delivered to all local media sources, including television, radio, and print
sources.
Developer will hold at least three open houses to show the BMR units. Developer will also provide
access to all interested homebuyers on an appointment basis.
V. Executing the Sale of the Units: Timelines
All scheduling references in the attached Exhibit A to this BMR Sale Terms and Conditions are based on
the date the Certificate of Occupancy issued by the City.
A Form of Resale Restriction and Option to Purchase
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VI. Prospective Homebuyer Review and Sale Process
Developer will provide the City all documents required to bring the BMR units to market. The City will
review and approve all documents prior to use in the sale of the BMR units. This will assure that: a) all
prospective homebuyers are within compliance of protocols and restrictions associated with the sale and
delivery of the BMR units and b) the appropriate selection of take-out first lenders that are able to comply
with the BMR resale restriction.
a. Take out Financing
The developer will secure financing resources that will uphold and comply with the resale restrictions
mandated by the City. Financing strategies and sources should also maximize the capacity for eligible
homebuyers to purchase the home while minimizing home ownership costs. Financing structures will
promote strategies that ensure the greatest level of long-term safety and stability for homeowners while
reducing short and long-term risks of default and foreclosure.
The homebuyer and Developer have the discretion to choose their preferred lender(s), subject to City
approval. The Developer will seek lenders with the following qualifications and loan products.
The lender has a successful record of financing BMR units.
The lender offers a competitive interest rate and loan origination costs for the loan provided.
Experience with homebuyer subsidy programs, such as the Federal Home Loan Bank WISH
Program and the County’s Mortgage Credit Certificate Program.
Loan products must be fixed through the duration of the maturity term of the loan without any
balloon payments.
Lender must accept the City’s form resale restriction “as is”.
b. Pre-screen BMR Applications
All households interested in purchasing a BMR unit must submit a BMR prescreen Program eligibility
application to the Administrator. The applications will be reviewed by the Developer and its Administrator.
The requirements will be communicated to the public in outreach material as described above. Copies of
prescreen applications and materials shall be provided to the City upon request.
c. Preliminary Eligibility Determination to Participate in the Lottery
The Developer and the City will agree on pre-screen eligibility parameters and the lottery process 120
days prior to Developer receiving their Certificate of Occupancy.
d. Lottery
Administrator will conduct a lottery if the number of eligible homebuyers exceeds the number of BMR
units available. City will provide a venue and attend the event.
e. Final Loan and Program Approval
Administrator will contact all lottery winners to request additional documents required to advance and
complete the Program eligibility approval performed by the City. Additional information may be requested
by the Administrator or the City.
A Form of Resale Restriction and Option to Purchase
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EXHIBIT A: SALE OF UNITS AND TIMELINES
Activity Schedule Performed By
Confirm with the City that all BMR eligibility
parameters and lottery process
120 days prior to COO Developer and City
Secure take out financing sources to finance
the sale of the BMRs
120 days prior to COO Developer/Administrator
General outreach activity commences 90 days prior to COO Developer/Administrator
Units Pricing 90 days prior to COO Developer/Administrator and
City
Unit Pricing Adjustments 10 days following COO Developer/Administrator and
City
Start collecting eligibility screening
applications
60 days prior to COO Developer/Administrator
Preliminary eligibility determination and
notice of eligibility submitted to City.
30 days prior to COO Developer/Administrator
Priority lottery winners are placed into
contract
At time COO is issued Developers Sales Team
2975012.2