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