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HomeMy WebLinkAboutSuccessor Reso 04-2018 (18-1022)City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) lip South San Francisco, CA Successor Agency Resolution: RES 04 -2018 File Number: 18 -1022 Enactment Number: RES 04 -2018 RESOLUTION APPROVING THE FIRST AMENDMENT TO THE PURCHASE AND SALE AGREEMENT BETWEEN THE SOUTH SAN FRANCISCO SUCCESSOR AGENCY AND SSF MILLER CYPRESS PHASE 2, LLC AMENDING THE SUPPLEMENTAL PURCHASE PRICE FOR 216 MILLER AVENUE (APN 012- 314 -220) TO A FIXED AMOUNT OF $2,000,000. 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, were 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 1 File Number: 18 -1022 Enactment Number: RES 04 -2018 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 Successor Agency was the owner of certain real property located in the City of South San Francisco ( "City "), California, known as County Assessor' s Parcel Number 012- 317 -110 ( "401 Airport Boulevard ") and 012 - 317 -100 ( "411 Airport Boulevard ") (collectively "Parcel A "), 012 - 317 -090 ( "421 Airport Boulevard "), 012 -314- 100 ( "405 Cypress Avenue ") (collectively "Parcel B ") 012- 314 -220 ( "216 Miller Avenue" or "Parcel C "), 012 - 318 -080 ( "315 Airport Boulevard" or "Parcel D ") and collectively referred to as the "Properties "; and, WHEREAS, on February 10, 2016, the Agency adopted Resolution number 03 -2016 approving the Purchase and Sale Agreement ( "PSA ") with Miller Cypress SSF, LLC ( "Developer ") for the acquisition and development of the Properties; and WHEREAS, the PSA was executed and became effective on February 23, 2016; and WHEREAS, the Properties were conveyed to the Developer; and WHEREAS, on February 10, 2016, entitlements were approved by the City Council for 260 market rate rental apartments on two assembled sites, Parcel A and D, a parking lot on Parcel B, and 12 townhomes on Parcel C; and WHEREAS, the Developer purchased six sites, comprising Parcel A, B, C and D, from the Successor Agency /City of South San Francisco ( "City ") for $4,000,000; and WHEREAS, pursuant to the terms of the PSA, Parcel C was transferred to Developer, but was not included in the $4,000,000 sale price; and WHEREAS, Developer has indicated it is pursuing the Land Assembly Option, as contemplated in the PSA; and WHEREAS, the appraisal, dated July 3, 2018, valued Parcel C at $3,700,000 as part of a larger development; and WHEREAS, due to increases in construction costs, the cost to assemble neighboring properties for the development, and slow growth in rental revenues Developer has informed the Successor Agency that it is unable to pay the appraised value; and WHEREAS, upon issuance of a building permit for Phase 2 of the Cadence project, the taxing entities will receive sale proceeds consistent with the Compensation Agreement; and WHEREAS, pursuant to the terms of the Compensation Agreement, the Oversight Board must approve the final sale price; and City of South San Francisco Page 2 File Number: 18 -1022 Enactment Number. RES 04 -2018 WHEREAS, at the November 26, 2018 the Oversight Board amended and approved the sale price of $2,000,000, subject to Successor Agency approval NOW, THEREFORE, BE IT RESOLVED that the South San Francisco Successor Agency 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 Purchase and Sale Agreement, amending the supplemental purchase price for 216 Miller Avenue (APN 012 - 314 -220) to a fixed amount of $2,000,000, a draft of which is attached hereto as Exhibit A and incorporated herein, is hereby approved. The Executive Director, or his designee, is authorized to execute the First Amendment to the Purchase and Sale Agreement, a draft of which is attached hereto as Exhibit A and incorporated herein, subject to minor amendments that do not materially increase the Successor Agency's obligations. The Executive Director, or his designee, is authorized to execute any necessary documents related to the First Amendment to the Purchase and Sale Agreement. The Executive Director, 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 Agency Counsel. At a meeting of the Special Successor Agency to the Redevelopment Agency on 11/28/2018, a motion was made by Pradeep Gupta, seconded by Richard Garbarino, that this Resolution be adopted. The motion passed. Yes: 5 Gupta, Matsumoto,,Addiego, Garbarino, and Normandy by Krista City of South San Francisco Page 3 FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS This First Amendment to the Purchase and Sale Agreement and Joint Escrow Instructions (this “First Amendment”) is made effective as of _________________, 2018 (“Effective Date”) by and between the South San Francisco Successor Agency, a public agency (“Seller” or “Agency”) and SSF Miller Cypress Phase 2, LLC(“Buyer”), successor-in-interest to Miller Cypress SSF, LLC, which is the date this Agreement was approved by the South San Francisco Oversight Board ("Oversight Board"). Seller and Buyer are each individually referred to herein as a “Party” and, collectively, as the “Parties.” RECITALS A. WHEREAS, Seller and Miller Cypress SSF, LLC entered into that certain Purchase and Sale Agreement dated August 23, 2016 (the “Agreement”) with respect to that certain real property located at known as County Assessor’s Parcel Numbers 012- 317-110 (401 Airport Boulevard)(“Parcel A.1”), 012-317-100 (411 Airport Boulevard) (“Parcel A.2”), 012-317-090 (421 Airport Boulevard) (“Parcel A.3”), 012-318-030 (315 Airport Boulevard) (“Parcel D”), 012-314-100 (405 Cypress Avenue) “(Parcel B”), and 012-314-220 (216 Miller Avenue parking lot) (“Parcel C”). Parcel A.1, Parcel A.2 and Parcel A.3 are collectively, “Parcel A.” Parcel A, Parcel B, Parcel C, and Parcel D are collectively the “Property.” B. WHEREAS, the Agreement was approved by the Oversight Board by Resolution 4-2016 which also authorized the transfer of the property to the City of South San Francisco (“City”) for subsequent conveyance to Miller Cypress SSF, LLC pursuant to the terms of the Agreement. C. WHEREAS, Miller Cypress SSF, LLC subsequently assigned its interest and obligations under the Agreement and the related development agreement to Miller Cypress PRI, LLC. D. WHEREAS, at a joint meeting of the City Council and the Agency held on November 30, 2016, the City Council and the Agency approved, by motion, a Memorandum of Understanding between the City and the Agency whereby the Agency agreed to convey the Property to the City as part of the Close of Escrow as set forth in Section 5 of the Agreement and the City agreed that it would subsequently convey the Property to SSF Miller Cypress PRI, LLC pursuant to the terms and at the times set forth in the Agreement as part of the Close of Escrow. E. WHEREAS, the Agency and City entered into a grant deed to convey the Property to the City as part of the Close of Escrow as set forth in Section 5 of the Agreement solely for the purpose of allowing the City to thereafter convey the applicable Property to SSF Miller Cypress PRI, LLC pursuant to the terms and at the times set forth in the Agreement. FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT – 401 AIRPORT BLVD, 411 AIRPORT BLVD, 421 AIRPORT BLVD, 315 AIRPORT BLVD, 405 CYPRESS AVE AND 216 MILLER AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA Page 2 of 4 F. WHEREAS, SSF Miller Cypress PRI LLC changed its name to BIT SSF Miller Cypress, LLC. G. WHEREAS, BIT SSF Miller Cypress, LLC subsequently assigned its interest and obligations under the Agreement and the related development agreement to Buyer for the portion of the Property known as Parcel C (also known as 216 Miller Avenue). H. WHEREAS, pursuant to the grant deed between the Successor Agency and the City, the Parties agree that the City conveyed the property in accordance with the above-described Memorandum of Understanding and did not assume any obligations or liabilities of the Agency as set forth in the Agreement and that such obligations and liabilities remain the obligations and liabilities of the Agency. I. WHEREAS, Buyer has notified the City and the Agency of its intent to pursue the Land Assembly Option, as defined in Section 5.6 of the Agreement. J. Seller and Buyer now desire to amend certain provisions of the Agreement, as set forth herein. AGREEMENT NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and incorporating all of the above as though set forth in full herein and in consideration of all the recitals, conditions and agreements contained herein, the parties agree to amend the Agreement as follows: 1. Section 2.3 of the Agreement is hereby deleted in its entirety and replaced with the following: 2.3 Supplemental Purchase Price for Parcel C. If the Buyer constructs Parcel C (whether as (i) a 12-unit town home development consistent with the Project Approvals (“12 Unit Project”) or (ii) as part of a revised development under the potential Land Assembly Option defined in Section 5.6 (“Cadence Phase 2 Project”)), Buyer shall pay Seller a fixed Supplemental Purchase Price of Two Million Dollars ($2,000,000) (the “Supplemental Purchase Price”), which amount shall be paid in full at the issuance of the first building permit for the Cadence Phase 2 Project. the additional land value payable to the Seller for Parcel C shall be One Million Dollars will be determined either by (X) a residual land value appraisal for Parcel C or, at Seller’s discretion, (Y) on a comparison sales based appraisal both of which will be prepared by a certified appraiser mutually selected by the Seller and Buyer within sixty (60) days of the date Buyer provides written notice of either its intent to pursue the Revised Parcel C Entitlements its intent to abandon the Revised Parcel C Entitlements and proceed with construction of the 12 Unit Project (“Supplemental Purchase Price”). In the event that the parties do not agree on an appraiser, the Seller shall identify FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT – 401 AIRPORT BLVD, 411 AIRPORT BLVD, 421 AIRPORT BLVD, 315 AIRPORT BLVD, 405 CYPRESS AVE AND 216 MILLER AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA Page 3 of 4 three certified appraisers with experience appraising properties in San Mateo County and each Party shall strike one appraiser and the remaining appraiser shall be retained to conduct the appraisal. The costs of the appraisal shall be shared equally between the Seller and Buyer. Buyer shall pay Seller the Supplemental Purchase Price prior to the earlier of ninety (90) days after completion of the appraisal or issuance of the first building permit by the City for Parcel C. This provision shall not apply if Buyer re-conveys Parcel C to Seller pursuant to Section 5.6(e)(v). 2. General Provisions. Each party hereto has received independent legal advice from its attorneys with respect to the advisability of executing this First Amendment and the meaning of the provisions hereof. The provisions of this First Amendment shall be construed as to the fair meaning and not for or against any party based upon any attribution of such party as the sole source of the language in question. Except as expressly amended pursuant to this First Amendment, the terms and provisions of the Agreement shall remain unmodified and shall continue in full force and effect, and Buyer and Seller hereby ratify and affirm all their respective rights and obligations under the Agreement. Any capitalized terms not defined herein shall have the meaning ascribed to them in the Agreement. In the event of any conflict between this First Amendment and the Agreement, this First Amendment shall govern. The terms and provisions of this First Amendment, together with the Agreement, shall constitute all of the terms and provisions to which Buyer and Seller have agreed with respect to the transaction governed hereby, and there are no other terms and provisions, oral or written, that apply to the Agreement and/or the Property other than as set forth in the Agreement as modified by this First Amendment. The provisions of this First Amendment shall apply to, be binding upon, and inure to the benefit of the parties hereto and to their respective successors and assigns. This First Amendment may be executed in multiple counterparts, all of which shall constitute an original, and all of which together shall constitute a single instrument. Counterparts of this First Amendment executed and delivered by facsimile, email or other means of electronic delivery shall constitute originals for all purposes. IN WITNESS WHEREOF, the parties have executed this First Amendment as of the Effective Date. SIGNATURES ON FOLLOWING PAGES. FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT – 401 AIRPORT BLVD, 411 AIRPORT BLVD, 421 AIRPORT BLVD, 315 AIRPORT BLVD, 405 CYPRESS AVE AND 216 MILLER AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA Page 4 of 4 SELLER SOUTH SAN FRANCISCO SUCCESSOR AGENCY By: _______________________________ Mike Futrell Executive Director ATTEST: By: _______________________________ Agency Clerk APPROVED AS TO FORM: By: _______________________________ Jason Rosenberg Agency Counsel BUYER: SSF MILLER CYPRESS PHASE 2, LLC a Delaware limited liability company By: SRGNC MF Miller Cypress Phase 2, LLC, a Delaware limited liability company Sole Member By: SRGNC MF, LLC a Delaware limited liability company Sole Member By: Mark R. Kroll President