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HomeMy WebLinkAboutReso 22-2019 (18-1059)File Number: 18-1059 Enactment Number: RES 22-2019 RESOLUTION APPROVING THE THIRD AMENDMENT' TO THE PURCHASE AND SALE AGREEMENTS WITH ROEM DEVE LOPMENT CORPORATION FOR. 201-219 GRAND AVENUE AND 418 LINDEN AVENUE PROPERTIES. WHEREAS, the City of South San Francisco ("City") is the owner of certain real property located in the City of South San Francisco, California, with the address of 418 Linden Avenue, known. as County Assessor'sParcel Numbers ("APN") 012-314-010 ("418 Linden"); and WHEREAS, the City is also the owner of fon.ner Redevelopment Agency property located in the City of South San. Francisco, California., with the address of 201-219 Grand Avenue, known as APNs 012-316-100, 012-316-110, 012-316-080 and 01.2-316-090 (collectively, "201 Grand Avenue"); and WHEREAS, in December 2015 the City approved entitlements for a residential project at 4.18 Linden Avenue and a, mixed-use project at 201 Grand Avenue ("Project"); and, WHEIUAS, in December 201.6, following a competitive process, the City and Agency selected a. developer, ROEM Development Corporation ("Developer"), to develop the 418 LindenAvenue and 201, Grand Avenue Projects; and, WHEREAS, the City Council certified an Environmental Impact Report ('E[R") on January 28, 2015 (State Clearinghouse number 2013102001) in accordance with the provisions of CEQA and CEQA Guidelines, which analy7ed the potential environmental impacts of the development of the Downtown Station Area Specific Plan; and, WHEREAS, the 41.8 Linden Avenue and 201 Grand Avenue Projects are both within the Downtown Station Area Specific Plan ("DSA SP") area and were found to be within the parameters analyzed within the DSA.SP EIR; and, WHEREAS, the Project will not result in any new significant environmental effects or a substantial increase in the severity of any previously identified effects beyond those disclosed and analyzed in the DSASP EIR, and wound not constitute a change in circumstances that would require additional environmental review; and, WHEREAS, the Planning Commission held a properly noticed public hearing on July 6, 201.7 to solicit public comment and consider the proposed entitlements, take public testimony, and make a recommendation to the City Council on the Project; and WHEREAS, oil September 6, 2017, the City Council ("Council") approved two Purchase and Sale City of South an Francisco Page I File Number. 18-1059 Enactment Number. RES 22-2019 Agreements, two Affordable Housing Agreements ("AHAs"), and a Development Agreement between the City and the Developer for the properties at 201 Grand Avenue and 418 Linden Avenue; and WHEREAS, in January 2018, Developer requested more time to develop a demolition strategy and demolition drawings and requested a 120 day extension to the Performance Schedule in the Purchase and Sale Agreements without adjusting the overall project completion date; and WHEREAS, on March 28, 2018, Developer and City entered into the First Administrative Amendments to the Purchase and Sale Agreements ("First Amendment") to modestly extend the deadlines within the Performance Schedule in order to provide sufficient time to undertake the complex demolition presented at 201-219 Grand Avenue; and WHEREAS, in July 2018, Developer entered into the Second Amendment to the Purchase and Sale Agreements extending the deadlines by a further 90 days; and WHEREAS, City staff has prepared documentation approving the one-year time extension, an adjustment in the Affordable Housing Agreement's AMI from 20 percent to 100 percent, and demolition prior to conveyance; and WHEREAS, the Performance Schedule in the Purchase and Sale Agreements now needs to be further amended in order to accommodate the one-year extension, as set forth in Exhibit A; and WHEREAS, the Developer has not requested a change in entitlements, and the Project as currently entitled is located within the DSASP area and remains within the parameters analyzed within the DSASP EIR; and, WHEREAS, the proposed Third Amendment to the Purchase and Sale Agreements will not result in any new significant environmental effects or a substantial increase in the severity of any previously identified effects beyond those disclosed and analyzed in the DSASP EIR, and wound not constitute a change in circumstances that would require additional environmental review. 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 incorporated herein as part of this Resolution. The proposed actions in this Resolution are consistent with the Long Range Property Management Plan. The Third Amendments to the Purchase and Sale Agreements, attached hereto as Exhibit A and Exhibit B respectively, are incorporated herein and hereby approved. The City Manager, or his designee, is authorized to execute Third Amendments to the Purchase and Sale Agreements and any necessary related documents. City of South San Francisco Page 2 File Number: 18...1059 Enactrnent Nurrber.RES 22-2019 The City Manager, or his designee, is authorized take any and all other actions necessary to implement Iffis intent of t1fis Resolution, subject to approval as to forin. by the City Attorney. BE ITFURTHER RESOLVED that this Resolution shall become effective immediately upon its passage and adoption,, At a meeting of the City Council on 2/27/2019, a motion was made by Richard Garbarino, seconded by Buenaflor Nicolas, that this Resolution be approved. The motion passed. Yes: 5 Mayor Matsumoto, Vice Mayor Garbarino, Councilmember Addiego, Councilmember Nagales, and Councilmember Nicolas Attest by osa Govea Acosta City of South Sari Francisco Page 3 THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT This Third Amendment to Purchase and Sale Agreement (this "Third Amendment") is made effective as of 2019 ("Effective Date") by and between CITY OF SOUTH SAN FRANCISCO, a municipal corporation ("Seller") and ROEM Development Corporation, a California Corporation ("Buyer"). Seller and Buyer are sometimes individually referred to herein as a "party" and collectively as "the parties." A. Seller and Buyer entered into that certain Purchase and Sale Agreement dated November 14, 2017 (the "Agreement") with respect to that certain real property located at 201-219 Grand Avenue, South San Francisco, California (Assessor's Parcel Numbers 0 12-316-110, 012 316-100, 012-316-090 and 012-316-080) (collectively, the "Property"). B. On March 28, 2018, Seller and Buyer entered into that certain First Amendment to Purchase and Sale Agreement dated March 28, 20 18 (the "First Amendment"), whereby the parties agreed to adjust the deadlines within the Buyer's Schedule of Performance as set forth in Section 5 of the Agreement. On August 22, 2018 Seller and Buyer entered into Second Amendment, whereby the parties agreed to further adjust the deadlines within Buyer's Schedule of Perfbrmance, as set forth therein ("Second Amendment"). C. On November 9, 2018, Buyer submitted a letter to City detailing its desire and proposal to modify the number of below market rate units within the Pro.ject and outlining the corresponding need for a 12 -month extension of time to secure the necessary funding sources. The City has determined that additional affordable housing is desirable to the City and. agreeable, and it is willing to extend the Schedule of Performance for an additional 12 -month period soluyer may secure such financing. D. Seller and Buyer now desire to amend certain provisions of the Agreement, as amended. by the First and Second Amendment, to reflect this understanding, 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. Revision to Schedule of Performance. The Schedule of Performance set forth in Section 5 of the Agreement, as amended by the First and Second Amendment, is arnended to read as follows: THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT — 201-219 GRAND AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA 5.1 B . Subject to Force Majeure Delays (as defined in Section 8.4) and Buyer and Seller's closing conditions (as set forth in Section 6.2 and 6.3), Buyer shall complete the following milestones in furtherance of the Closing, in accordance with the following schedule: Page 2 of 5 THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT — 201-219 GRAND AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA 2. Affordability Component of Project. Seller approves Buyer's proposal to re -purpose the units of the Project to all below market rate (affordable) housing (except for any "manager units"). Upon Buyer's acquisition of the Property, Buyer shall re - Page 3 of 5 Deadline Milestone (a) May 15, 2018 Buyer shall have completed 50% of the Construction Drawings and submitted the Financial Proforma to _ Seller (Completed) (b) July 14, 2018 Buyer shall have completed all Final Plans and submitted 100% construction drawings to the City for building permits, and submitted an Updated Proforma to Seller (Completed) (c) May 14, 2019 Buyer shall have started the required demolition of existing structures in accordance with the Pre - Construction Activity Agreement executed by the parties (d) November 30, 2019 Buyer shall have secured Construction Financing and executed a contract with a general contractor for %dew ei"bei. 42, 2048 construction of the Project in accordance with the fl._,,est 43, 2048 final plans (e) By December 21, Buyer and Seiler shall have satisfied (or waived in 2019 writing) all contingencies to Closing set forth in this Agreement, and be prepared to Close Escrow Within 10 days from satisfaction of all contingencies on December 11, 2019 Deeeinber 'a 2048 ' in tiSf ..*6-R... Of Q11 13ee�er 4-r�-04 8 Septeffiber 42, 2048 2. Affordability Component of Project. Seller approves Buyer's proposal to re -purpose the units of the Project to all below market rate (affordable) housing (except for any "manager units"). Upon Buyer's acquisition of the Property, Buyer shall re - Page 3 of 5 THIRD AMENDMENTTO PURCHASE AND SAI, E AGREEMENT - 201-219 GRAND AVENUE, SOUTH' SAN FRANCISCO), CA11FORNIA develop the Property into a high-density, mixed-use project including below market rate residential units, as further described in the A.14 s. 1 Demolition. Pursuant to that certain Pre - Construction Activity Access Agreement dated attached to and incorporated therein to the Third Amendment to the Development Agreement, Seller will retain a general contractor to demolish all structures located on the Property prior to the anticipated Closing. As such, upon the Closing, the Property will be delivered. in a "bare -land" condition, with all buildings and improvements demolished and removed. 4. General Provisions. Each party has received independent legal advice from its attorneys with respect to the advisability of executing this Third Amendment and the meaning of the provisions hereof. The provisions of this Third 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 "Third 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 Linder the Agreement. Any capitalized terms not defined herein shall have the meaning ascribed to the in the Agreement. In the event of any conflict between this 'Third. Amendment and the Agreement, this Third Amendment shall govern. The terms and provisions of this Third 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 Third Amendment. The provisions of this Third Amendment shall apply to, be binding upon, and inure to the benefit of the parties hereto and to their respective successors and assigns. This Third Amendment may be executed in multiple counterparts, all of'which shall constitute an original, and all orwhich together shall constitute a single instrument. Counterparts of this Third Amendment executed and delivered by facsimile, email or other means of electronic delivery shall constitute originals fir all purposes. (Signatures on Following Pagel Page 4 of 5 THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT — 201-219 GRAND AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA IN WITNESS WHEREOF, the parties have executed this Third Amendment as of the Effective Date. 131VA049 ROEM Development Corporation, a California corporation By: Name: Alex Sanchez Its Executive Vice President 004"N of CITY OF SOUTH SAN FRANCISCO, a municipal corporation ■ Charles Michael Futrell. City Manager The Title Company has executed this Third Amendment to acknowledge its agreement to act in accordance with the terms of this Third. Amendment, Chicago Title Insurance Company M Name: Sherri Keller Title: Escrow Officer Page 5 of 5 THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT This Third Amendment to Purchase and Sale Agreernent (this "Third Amendment"') is made effective as of' 2019 ("Effective Date") by arid between CITY OF SOIJTFI SAN FRANCISCO, a municipal corporation ("Seller") and ROEM Development Corporation, a California Corporation ("Buyer"). Seller and Buyer are sometimes individually referred to herein as a "party" and collectively as "the parties." Runiffm M A. Seller and Buyer entered into that certain Purchase and Sale Agreement dated November 14, 2017 (the "Agreement") with respect to that certain real property located at 418 Linden Avenue, South San Francisco, California (Assessor's Parcel Numbers 012-314-010) (the "Property"); B. On March 28, 2018, Seller and Buyer entered into that certain First Amendment to Purchase and Sale Agreement ("First Amendment"), whereby the parties agreed to adjust the deadlines within the Buyer's Schedule of Performance as set forth in Section 5 of the Agreement. On August 22, 2018, Seller and Buyer entered into that certain Second Amendment to Purchase and Sale Agreement ("Second. Amendment"), whereby the parties agreed to further adjust the deadlines within Buyer's Schedule of Performance, as set forth therein ("Second Amendment"). C. On November 9, 2018, Buyer submitted a letter to City detailing its desire and proposal to modify the number of below market rate units within the Project and outlining the corresponding need for a 12 -month extension of time to secure time necessary funding sources. The City has determined that additional affordable housing is desirable to the City and agreeable, and it is willing to extend the Schedule of Performance for an additional 12 -month period so Buyer may secure such financing. D. Seller and Buyer now desire to amend certain provisions ofthe Agreement, as amended by the First and Second Amendment, to reflect this understanding, as set fbrth 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. Revision to Schedule of Performance. The Schedule of Perfbrmance set forth in Section 5 of the Agreement, as amended by the First and Second Amendment, is amended to read as follows: THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT — 4 ] 8 418 LINDEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA 5.1 B . Subject to Force Majeure Delays (as defined in Section 8.4) and Buyer and Seller's closing conditions (as set forth in Section 6.2 and 6.3), Buyer shall complete the following milestones in furtherance of the Closing, in accordance with the following schedule: 2. Affordability Component of Project. Seller approves Buyer's proposal to re -purpose the units of the Project not used as a "manager's unit" to all below market rate (affordable) housing. Upon Buyer's acquisition of the Property, Buyer shall re -develop the Page 2 of 4 Deadline - - ---- - --------- - - - Milestone (a) May 15, 2018 Buyer shall have completed 50% of the Construction Drawings and submitted the Financial Proforma to Seller (Completed) (b) July 14, 2018 Buyer shall have completed all Final Plans and submitted 100% construction drawings to the City for building permits, and submitted an Updated Proforma to Seller (Completed) (c) November 30, 2019 Buyer shall have secured Construction Financing and executed a contract with a general contractor for rev efnber 42, 204-8 demolition and construction of the Project in August 13, 2048 accordance with the final plans (d) By December 21, Buyer and Seller shall have satisfied (or waived in 2019 writing) all contingencies to Closing set forth in this Agreement, and be prepared to Close Escrow Within 10 days from satisfaction of all contingencies on December 11, 2019 Peeetnber 24, 2049 w4hift 10 dft" from S ft t i 9 46 f ft 11 44, 2048 Sep tefnber 42, 2048 2. Affordability Component of Project. Seller approves Buyer's proposal to re -purpose the units of the Project not used as a "manager's unit" to all below market rate (affordable) housing. Upon Buyer's acquisition of the Property, Buyer shall re -develop the Page 2 of 4 THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT — 418 LINDEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA Property into a high-density, residential use -only project, with some flexibility for live/work spaces, including below market rate residential units, as further described in the A14A. 3. General Provisions. Each party has received independent legal advice from its attorneys with respect to the advisability of executing this Third Amendment and the meaning of the provisions hereof. The provisions of this Third 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 ,rhird 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 Third Amendment and the Agreement, this Third Amendment shall govern. The terms and provisions of this Third 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 Third Amendment. The provisions of this Third Amendment shall apply to, be binding upon, and inure to the benefit of the parties hereto and to their respective successors and assigns. This"I'hird 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 'Third Amendment executed and delivered by facsimile, email or other means of electronic delivery shall constitute originals for all purposes. INWITNESS WHEREOF, the parties have executed this Third Amendment as ofthe Effective Date. BUYER: SELLER: R.OEM Development Corporation, CITY OF SOUTH SAN FRANCISCO, a California corporation a municipal. corporation By: By: Name: Alex Sanchez Name: Its Executive Vice President Its Page 3 of 4 Charles Michael Futrell City Manager THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT — 418 LINDEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA The Title Company has executed this Third Amendment to acknowledge its agreement to act in accordance with the terms of this Third Amendment. Chicago Title Insurance Company Name: Sherri Keller Title: Escrow Officer Page 4 of 4