HomeMy WebLinkAboutReso 160-2018 (18-865)City of South San Francisco P.O. Box 711 (City Hall,
400 Grand Avenue)
South San Francisco, CA
City Council
Resolution: RES 160 -2018
File Number: 18 -865 Enactment Number: RES 160 -2018
RESOLUTION APPROVING THE SECOND 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 AGREEMENT.
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
WHEREAS, on February 8, 2017, the City adopted Resolution 16 -2017 approving the transfer of the
City of South San Francisco Page 1
File Number: 18 -865
Enactment Number: RES 160 -2018
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.
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 Second Amendment to the Disposition and Development Agreement, attached hereto as Exhibit A
and incorporated herein, is hereby approved.
The City Manager, or his designee, is authorized to execute the Second Amendment to the Disposition
and Development Agreement, attached hereto as Exhibit A and incorporated herein, and execute any
necessary documents related to the Second Amendment to the Disposition and Development 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.
City of South San Francisco Page 2
File Number. 18 -865 Enactment Number: RES 160 -2018
At a meeting of the City Council on 9/26/2018, a motion was made by Richard Garbarino, seconded by Mark
Addiego, that this Resolution be approved. The motion passed.
Yes: 5 Mayor Normandy, Mayor Pro Tern Matsumoto, Councilmember Garbarino,
Councilmember Gupta, and Councilmember Addiego
Attest by !'
Krista M i 1
City of South San Francisco Page 3
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SECOND AMENDMENT
TO DISPOSITION AND DEVELOPMENT AGREEMENT
This Second Amendment to the Disposition and Development Agreement (“Second
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 June 27, 2018, Developer and City agreed to amend the DDA and entered into
the First Amendment 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 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
to Developer, and in no event later than October 31 , 2018 December 15, 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
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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.
4. Section 5.17. Section 5.17 of the DDA is hereby repealed and replaced in its entirety
and amended to read as follows:
5.17 Performance and Payment Bonds. Prior to Close of Escrow, Developer shall
provide, 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.
5.17.1 Alternative to Performance and Payment Bonds. In lieu of such
performance and payment bonds, Developer may submit documents and evidence
satisfactory to the City of Developer’s and contractor’s ability to commence and
complete construction of the Project, subject to City’s approval of the form and
substance of the documents (“Approved Performance Bond Alternative”). Such
Approved Performance Bond Alternative shall be approved by Developer prior to
submission to City for City’s approval, and may be in the form of an irrevocable letter of
credit, pledge of cash deposit, certificate of deposit, secured pledge of personal property
collateral, 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. Developer shall submit documents and
evidence sufficient to demonstrate an Approved Performance Bond Alternative in
compliance with this subsection 5.17.1 to the City in sufficient time to allow for City
review, but no less than fifteen (15) days prior to Developer beginning demolition on the
Property, in order to allow for review and approval prior to the scheduled demolition
start date.
5.17.1.1 Post-Closing Approval of Approved Performance Bond
Alternative. In lieu of providing an Approved Performance Bond Alternative prior to Close of
Escrow, Developer may elect to deliver Two Million dollars ($2,000,000) into escrow as a good
faith security deposit to permit the close of escrow prior to the City’s approval of the Approved
Performance Bond Alternative in compliance with Subsection 5.17.1. If Developer provides an
Approved Performance Bond Alternative that has been approved by the City, pursuant to Section
5.17.1 and Developer commences construction before December 15, 2018, then the deposit shall
be returned to the Developer. If, in City’s sole discretion, Developer fails to provide the City with
an Approved Performance Bond Alternative pursuant to Section 5.17.1 prior to December 15,
2018, Developer shall be in default under this Agreement, and, in addition to the City’s other
remedies, the City would retain the entire deposit, following a 60 calendar day cure period. If
Developer is able to timely cure the default, the deposit will be returned to Developer, less any
costs incurred by the City related to the enforcement of this provision at a not to exceed amount
of Fifteen Thousand Dollars ($15,000).
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5. Section 9.10. Section 9.10 of the DDA is hereby amended to read as follows with
additions in double underline and deletions in strikethrough:
9.10. Future Sale of Property. If the City exercises the Repurchase Option
pursuant to Section 9.9, the City will make reasonable efforts to remarket the property
for development consistent with the LRPMP. In the event that the City sells the property
following exercise of the Repurchase Option, the City shall pay to the Developer cash in
an amount equal to:
1. Sale proceeds from the sale of the Property, or Three Million, Five
Hundred Thousand Dollars ($3,500,000) Three Million, Fifty Thousand Dollars
($3,050,000), whichever is lower; minus
2. The amount paid to the Developer pursuant to Section 9.9; minus
3. The City’s costs incurred in selling the property, including but not limited
to staff time, attorney’s fees and any third party consultants.
6. Effect of Second Amendment. Except as expressly modified by this Second
Amendment, the DDA and First Amendment 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, 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 Second Amendment or the First Amendment or the
DDA, the provisions of this Second Amendment shall govern.
7. Binding Agreement. This Second 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 Second 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 Second
Amendment or under law.
8. Counterparts. This Second 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 Second Amendment shall be governed by and interpreted in
accordance with the laws of the State of California.
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10. Invalidity. Any provision of this Second Amendment that is determined by a court of
competent jurisdiction to be invalid or unenforceable shall be deemed severed from this
Second 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 Second Amendment are for convenience only and
shall be disregarded in interpreting the substantive provisions of this Second
Amendment.
IN WITNESS WHEREOF, this Second 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