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HomeMy WebLinkAboutReso 118-2019 (19-658)City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA City Council Resolution: RES 118-2019 File Number: 19-658 Enactment Number: RES 118-2019 RESOLUTION APPROVING A SECOND EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT BETWEEN THE CITY OF SOUTH SAN FRANCISCO, AND FIREHOUSE WORK, LLC AND HABITAT FOR HUMANITY GREATER SAN FRANCISCO, FOR THE PROPERTY LOCATED AT 201 BADEN AVENUE AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT. WHEREAS, The City -owned, retired firehouse at 201 Baden (the "Property") is approximately 22,460 square feet (0.51 acres) and consists of three parcels (APN 012-335-100, 012-335-110 and an unnamed parcel); and, WHEREAS, Firehouse Live, LLC and Firehouse Work, LLC (formerly Fire House Live/Work), were selected by Council as the developer for the site; and, WHEREAS, after the developer selection, the Housing Standing Committee directed staff to begin negotiations on an Exclusive Negotiating Rights Agreement ("ENRA") with the team; and, WHEREAS, at that time the Firehouse Work team was comprised of members Group 4 and Firehouse Live team was comprised of Lawlor Land Use; and, WHEREAS, the consortium agreed to offer 50% of the housing units at Below Market Rate ("BMR") prices in partnership with Habitat for Humanity Greater San Francisco ("HGSF"); and, WHEREAS, on February 27, 2019, the City Council approved the ENRA ("Original ENRA"); and, WHEREAS, the key terms negotiated in the ENRA included a 180 day term, three 90 day administrative extensions for a fee of $15,000, developer commitment to the BMR units, demonstrated financial feasibility, submission of a joint entitlement application ("Pre -App"), and the final purchase price determination; and, WHEREAS, the Original ENRA came into effect on March 4, 2019; and, WHEREAS, developer team has been working with City staff on meeting the obligations of the ENRA and troubleshooting the more complicated components of the proposed project; and, WHEREAS, Lawlor Land Use discovered they could not make the project financially feasible with only 12 market rate units; and, City of South San Francisco Page 1 File Number. 19-658 Enactment Number. RES 118-2019 WHEREAS, HGSF is prepared to entirely assume the Firehouse Live portion of the Project; and, WHEREAS, HGSF will develop 24 for -sale BMR units, targeting 60-80% of Area Median Income ("AMI") levels; and, WHEREAS, the Original ENRA expired and the City and development team are no longer in exclusive negotiations and the development team have requested a new ENRA; and, WHEREAS, the key business points and deviations from the Original ENRA include an increase in the number of BMR units from 50% to 100%, exchange of developers from Lawlor Land Use to HGSF, a term of 180 days, a joint Pre -App, and separate Purchase and Sale Agreements ("PSAs") and entitlement processes and HGSF to provide Financing Progress reports to the City every 30 days; and, WHEREAS, to address their different Project needs, the developer team has contemplated a path forward where the developers remain joined through the Pre -App and PSA negotiation phase; and, WHEREAS, prior to the PSA finalization, the developer team intends to resolve some of the issues that may bind the projects; and, WHEREAS, the ENRA provides the City with an option to replace one developer or terminate the ENRA as to both, subject to City Council's approval; and, NOW, THEREFORE, the City Council of the City of South San Francisco does hereby resolve as follows: 1. The Recitals set forth above are true and correct, and are incorporated herein by reference. 2. The Exclusive Negotiating Rights Agreement, substantially in the form attached as Exhibit A hereto, is hereby approved. 3. The City Manager or his designee is hereby authorized to execute it on behalf of the City Council; to make revisions to the Agreement, with review and approval by the City Attorney, which do not materially or substantially increase the City's obligations thereunder; to sign all documents; to make all approvals and take all actions necessary or appropriate to carry out and implement the intent of this Resolution. Exhibit A: Exclusive Negotiating Rights Agreement with Firehouse Work and Habitat for Humanity Greater San Francisco City of South San Francisco Page 2 File Number. 19-658 Enactment Number. RES 118-2019 At a meeting of the Special City Council on 9/25/2019, a motion was made by Richard Garbarino, seconded by Mark Addiego, that this Resolution be approved. The motion passed. Yes: 3 Councilmember Nagales, Councilmember Addiego, and Vice Mayor Garbarino No: 2 Mayor Matsumoto, and Councilmember Nicolas Attest by L93,a 1641� eLL- Vsa Govea Acosta City of South San Francisco Page 3 EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT by and between FIREHOUSE WORK, LLC, HABITAT FOR HUMANITY GREATER SAN FRANCISCO, INC. and CITY OF SOUTH SAN FRANCISCO 2 of 19 THIS EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT (this “Agreement”) is entered into by and between the CITY OF SOUTH SAN FRANCISCO, a municipal corporation (“City”), FIREHOUSE WORK, LLC, a California Limited Liability Company (“FHW”), and HABITAT FOR HUMANITY GREATER SAN FRANCISCO, INC., a California Non-Profit Corporation (“HGSF”; each a “Developer” and both collectively described as “Developers”) dated as of _________________, 2019 (the “Effective Date”). City and Developers are each referred to as (“Party”) or collectively referred to as the (“Parties”). WHEREAS, the City is the owner of certain real property located at 201 Baden Avenue, in the City of South San Francisco, California, known as County Assessor’s Parcel Numbers (“APN”) 012-335-100, 012-335-110, and the portion of Cypress Street that is to be vacated, with a combined lot size of 22,500 square feet, and more particularly shown attached hereto as Exhibit A, and incorporated herein by this reference (the “Property”); and WHEREAS, the Property, commonly known as the Old Firehouse, was decommissioned as a fire station in 2006 and has been used for interim storage uses since 2008; and WHEREAS, the City adopted the South San Francisco Downtown Station Area Specific Plan in 2015 which set forth a vision for the downtown focusing on revitalization, new residential developments, improvements along Grand Avenue and adjacent corridors, and encouraging Transit-Oriented Development projects that encourage bicycle and pedestrian links to regional transportation hubs; and WHEREAS in March 2016 the City followed the Surplus Land Act (California Government Codes Sections 54220 et seq.) noticing requirements and offered public entities an opportunity to notify the City of its interest in purchasing or leasing the property for the purpose of expanding parks and/or recreation services, open space public schools or affordable housing, and received no responses; and WHEREAS, in 2017, the City solicited proposals from qualified developers through an RFQ process, and upon review of the responsive proposals, the City’s Joint Housing Standing Committee made a recommendation at its November 19, 2018 meeting that the City pursue an Exclusive Negotiating Rights Agreement (“ENRA”) with the selected developer team, Fire House Live Work for the development of a commercial project and residential project, or projects, on the Property; and WHEREAS, on March 4, 2019, the City entered into an ENRA (the “Original ENRA”) with FHW and Firehouse Live, LLC (“FHL”) which authorized the parties to commence negotiating the terms of purchase agreements with FHW and FHL in connection with the rehabilitation of the existing Old Firehouse and the development of a mixed-use project; on the Property; and WHEREAS, the Original ENRA expired on August 31, 2019, and the Parties now desire to replace FHL with HGSF as the proponent of the residential component of the Project (as defined below), thereby necessitating the execution of a new ENRA to replace and supersede the Original ENRA; and 3 of 19 WHEREAS, FHW desires to rehabilitate the existing Old Firehouse structure into a 9,200 square foot commercial space, preserving its historical significance (the “Commercial Project”), and HGSF desires to construct approximately twenty-four (24) residential condominium units that will all be deed restricted as Below Market Rate (“BMR”) on the Property (the “Affordable Housing Project,” and collectively with the Commercial Project, the “Projects”), which is to be bifurcated into two separate parcels that will be sold to each Developer in separate transactions; and WHEREAS, FHW will be responsible for entitling and developing the Commercial Project and HGSF will be responsible for entitling and developing the Affordable Housing Project; and, WHEREAS, the Developers anticipate expending funds to prepare architectural and design drawings and conduct certain studies that are needed to assess the feasibility of the Projects and seek any additional land use entitlements, and therefore require a grant of exclusive negotiating rights in order to be willing to make such expenditures; and its is the intent of the Developers to work cooperatively and in good faith to meet the Performance Milestones set forth on Exhibit B to submit and process a joint pre-application and negotiate the terms of purchase and sale agreements and this process is material to the City entering this ENRA; and, WHEREAS, at its meeting on ____________________, 2019,the City approved this Agreement, and directed staff to commence negotiating the terms of two separate purchase agreements (collectively, the “Purchase Agreements”), in order for the Developers to pursue land use entitlements for the Projects and acquire the Property. NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows. 1. Good Faith Efforts to Negotiate. The Parties agree, for the term of this Agreement, to negotiate diligently and in good faith the terms of the Purchase Agreements setting forth the conditions and timetable for the sale of the Property (as may be subdivided by the Developers with any necessary street and utility vacations by the City) to the Developers. Furthermore, the Parties agree to diligently and in good faith pursue any third-party consent, authorization, approval, or exemption required in connection with the preparation and execution of the Purchase Agreements for the future development of the Projects. This Agreement does not, however, impose a binding obligation on City to convey any interest in the Property to the Developers, nor does it obligate City to grant any approvals or authorizations required for the development of the Projects on the Property. a. If City believes that either Developer is not negotiating diligently and in good faith, City will give written notice thereof to that particular Developer who will then have ten (10) business days to commence negotiating in good faith. Following the failure of that Developer to thereafter commence negotiating in good faith within such ten (10) business day period, City may terminate that Developer’s rights under this Agreement. The City Council may, in its reasonable discretion, determine that a default by one Developer under this Agreement shall not constitute a default by the other Developer, and the termination of one Developer’s rights under this Section 4 of 19 1(a) due to its default shall not affect the other Developer’s rights under this Agreement. The City will provide written confirmation to the Developers of this determination if so made. If this Agreement is terminated by City pursuant to this Section 1(a), Developers acknowledge and agree that City will suffer damages, including lost opportunities to pursue other development alternatives for the Property (or portion thereof). Therefore, as it pertains to FHW, FHW and the City agree that if this Agreement is terminated as provided above due to a default by FHW, City will retain the full Payment and Deposit amounts (as defined in Section 5 of this Agreement, infra), plus any interest thereon, as fixed and liquidated damages and not as a penalty, and following such termination neither Party will have any further rights against or liability to the other under this Agreement, except as set forth in Section 16 of this Agreement. b. If either Developer believes that City is not negotiating diligently and in good faith, that Developer will give written notice thereof to City which will then have ten (10) business days to commence negotiating in good faith. Following the failure of City to thereafter commence negotiating in good faith within such ten (10) business-day period, this Agreement may be terminated by the Developer who provided notice, but, subject to the determination by the City Council in its reasonable discretion, only for that Developer’s portion of the Project. In the event of such termination by a Developer, City will return a prorated portion of the Deposit and any remaining balance of the Payment, if any, to that Developer and neither Party will have any further rights against or liability to the other under this Agreement, except as set forth in Section 16 of this Agreement. Should such termination occur pursuant to this Section 1(b), the terms of this Agreement between the other Developer and City will remain in full force and effect. c. If FHW and City proceed to negotiate diligently and in good faith, but are unable to reach an agreement on the terms of FHW’s respective Purchase Agreement, then City will return a prorated portion of the Deposit, if any, to FHW in accordance with the provisions of Section 5(c) of this Agreement and neither FHW nor City will have any further rights against or liability to the other under this Agreement, except as set forth in Section 16 of this Agreement. Should that circumstance occur, the terms of this Agreement between HGSF and City will remain in full force and affect. 2. Developer’s Exclusive Right to Negotiate With City. City agrees that it will not, during the term of this Agreement, directly or indirectly, through any officer, employee, agent, or otherwise, solicit, initiate or encourage the submission of bids, offers or propo sals by any person or entity with respect to the acquisition of any interest in the Property or the development of the Property, and City will not engage any broker, financial adviser or consultant to initiate or encourage proposals or offers from other parties with respect to the disposition or development of the Property or any portion thereof. City may, at its discretion, continue to utilize the Property for public uses until the City conveys ownership of the Property. Furthermore, City will not, directly or indirectly, through any officer, employee, agent or otherwise, engage in negotiations concerning any such transaction with, or provide 5 of 19 information to, any person other than Developers and their representatives with a view to engaging, or preparing to engage, that person with respect to the disposition or development of the Property or any portion thereof. 3. Term. a. The term of this Agreement (“Term”) commences on the Effective Date, and will terminate one hundred and eighty (180) days from the Effective Date, unless extended or earlier terminated as provided herein. b. During the Term, Developers will each provide City with written reports every forty-five (45) days that summarize the Developer’s actions taken in furtherance of this Agreement, which may include to the following: negotiating the terms of the Purchase Agreements, due diligence review of the Property, commencement of any environmental requirements under the California Environmental Quality Act (“CEQA”), preparation of architectural and construction plans, attendance at City meetings, adherence to a mutually agreed upon master schedule, and general progress towards future entitlement of the Property. c. The Term of this Agreement may be administratively extended for up to a maximum of three separate ninety (90) day periods for each Developer or both Developers upon the request of either Developer. In the case of FHW, administrative approval of the request shall be contingent upon City’s receipt of an additional non-refundable payment by FHW of fifteen thousand dollars ($15,000) for each ninety day extension period (“ENRA Extension Payment”), and in the case of FHW or HGSF the consent of the City acting through and at the discretion of its City Manager or his/her designee (“City Manager”). Developers understand that the City will only consider extension(s) of the Term of this Agreement where Developers have demonstrated, to the City’s satisfaction, substantial progress toward development of the Property, which may include submittal of a joint pre- application, submittal of individual environmental review documents necessary to satisfy compliance with CEQA, submittal of individual architecture and construction plans, payment of any respective applicable processing and plan check fees, or pursuing land use entitlements for each component of the Project. 4. Relationship of the Parties. Nothing in this Agreement creates between the Parties the relationship of lessor and lessee, of buyer and seller, or of partners or joint venturers. 5. Deposit and Payment to City. a. In consideration for the right to exclusively negotiate under this Agreement, FHW has previously remitted to City a deposit in the amount of Fifty Thousand Dollars ($50,000) (the “Deposit”). The City agrees that such Deposit will accrue to FHW, and no portion of the Deposit shall be attributed to HGSF. If Purchase Agreements are executed, the Deposit will be credited toward FHW’s ultimate purchase price for the Property. City has deposited the Deposit in an interest bearing account of the City and any interest, when received by City, will become part of the Deposit. 6 of 19 During the term of this Agreement, FHW will also reimburse City for all staff and City consultant time incurred in preparing the Purchase Agreement, entitlements, and any other documents that relate to the purchase and disposition of the Historic Firehouse portion of the Property to FHW. FHW previously remitted to City an initial payment in the amount of Thirty Thousand Dollars ($30,000) in immediately available funds (“Payment”) in connection with the Original ENRA, which was subsequently drawn upon to reimburse City for work performed in connection with the Original ENRA. City has deposited the Payment in an interest bearing account of City and any interest, when received by City, will become part of the Payment. The Payment may be drawn upon by City to reimburse staff, City Attorney, and City consultant costs for preparing FHW’s Purchase Agreement, entitlements, and any other related documents, at their standard published hourly rates. Should the full amount of the Payment be exhausted during the Term of this Agreement, City may require FHW to provide additional funds necessary to reimburse staff and consultant costs expended in connection with preparation of the Purchase Agreement and any related documents as they relate to the Commercial Project only. Documentation of City’s rate schedule for staff, staff time spe nt, and consultant costs will be retained by City and provided to Developer upon request. The City agrees to waive all such costs or fees subject to this Payment to the extent such costs or fees pertain to HGSF’s 100% affordable residential component. b. City agrees to account for the Deposit and Payment, any other separate payments to City that relate to cost recovery for staff time, interest earnings, and any expenditures made in furtherance of this Agreement. Upon reasonable notice to City, FHW may receive copies of any records related to expenditures made in furtherance of this Agreement, subject to any appropriate redactions. c. In the event that FHW terminates this Agreement before the expiration of the Term pursuant to Section 1(b), Section 1(c) or Section 13(d), the City will return any prorated portion of the Deposit to FHW. The prorated Deposit will be calculated by dividing the full $50,000 Deposit by the number of months in the Agreement Term. This amount will be multiplied by the number of months remaining on the Term at the time of FHW’s termination. The resulting figure will be the prorated Deposit that the City will pay to FHW. d. In the event this Agreement is terminated by City or FHW with respect to the Commercial Project for any reason other than FHW’s breach of its obligations under this Agreement, the remaining balance of the Payment and any interest earned will be returned to FHW, minus amounts that the City retains attributable to the amount of costs and consulting fees actually and reasonably incurred and documented by City in implementing this Agreement, as set forth in subsection (a) of this Section 5. e. In addition to the payments to City discussed herein, Developers shall be subject to all applicable fees imposed by the City for processing land use entitlements as set forth in the City’s adopted Master Fee Resolution and any applicable cost recovery and indemnification agreements, except as may otherwise be provided through the 7 of 19 Purchase Agreement including, by way of example only, if the City agrees to waive processing fees, impact fees, or other fees for the Affordable Housing Project. 6. Terms and Conditions of the Purchase Agreements. The Parties agree to use diligent and good faith efforts to successfully negotiate separate Purchase Agreements which will address, among other things, the purchase price, the conditions of closing, and the scope of Developer’s obligations to design and construct improvements on the Property. The Parties agree that the terms of the Purchase Agreements shall be based on those terms set forth herein and in Exhibit B, attached hereto and incorporated herein by reference, and any other terms as may be agreed to by the respective Parties. In the event of an inconsistency between the body of this Agreement and Exhibit B, the language in the body of this Agreement shall prevail. 7. Developer’s Studies; Right of Entry. a. During the Term of this Agreement, Developers will bear all costs and expenses associated with preparing any studies, surveys, plans, specifications and reports (“Developer’s Studies”) Developers deems necessary or desirable for each of their respective projects, in each Developer’s sole discretion, to conduct due diligence for the Property. Developer’s Studies may include, without limitation, title investigation, marketing, feasibility, soils, seismic and environmental studies, financial feasibility analyses and design studies. Developers will have rights of access to the Property to prepare Developer’s Studies. b. Developers hereby agrees to notify the City seventy-two (72) hours in advance of its intention to enter the Property. c. Developers will provide the City with work plans, drawings, and descriptions of any intrusive sampling it intends to do. Developers must keep the Property in a safe condition during its entry. Developers shall repair, restore and return the Property to its condition immediately preceding each Developer’s entry thereon at that Developer’s sole expense. d. Without limiting any other indemnity provisions set forth in this Agreement, each Developer shall indemnify, defend (with counsel approved by City) and hold the City, its officials, officers, employees, and volunteers harmless from and against all claims resulting from or arising in connection with entry upon the Property by each Developer or Developer’s agents, employees, consultants, contractors or subcontractors pursuant to this Section 7. Developers’ indemnification obligations set forth in this Section 7 shall survive the termination of this Agreement. For the avoidance of doubt, FHW’s and HGSF’s indemnification obligations under this Section 7(d) relate only to their (or their agents) entry upon the Property; FHW shall not be obligated to indemnify the City in connection with the actions of HGSF, and HGSF shall not be obligated to indemnify the City in connection with the actions of FHW. e. If upon expiration of the Term of this Agreement either Developer has not successfully negotiated a Purchase Agreement, that Developer will, upon City’s 8 of 19 written request, provide City within fifteen (15) days following said date of expiration copies of any non-proprietary Developer’s Studies prepared by third parties completed by such date. The Developer subject to this Section 7(e) will also provide City with copies of any non-proprietary Developer’s Studies prepared by third parties completed after the expiration of the Term within fifteen (15) days following completion of such studies, or if Developer intends not to complete any such Developer Studies, Developer will provide City with copies of such uncompleted studies. 8. City’s Reports and Studies. Pursuant to terms of the Original ENRA, the City has provided to Developers, for review or copying at each Developer’s expense, all non-privileged studies, surveys, plans, specifications, reports, and other documents with respect to the Property that City is able to reasonably locate and has in its possession or control. Studies or documents prepared by City and its agents solely for the purpose of negotiating the terms of the Purchase Agreements and related documents are not required to be provided by City to Developer and are excluded from this requirement. 9. Developers’ Pro Forma, Evidence of Financing and Project Schedule Related to Potential Approval of a Purchase Agreement. a. The Parties agree that each Purchase Agreement will contain language that provides that: (1) not later than forty-five (45) days prior to the City consideration of Project entitlements, Developers will provide evidence satisfactory to City that Developers have identified potential sources and uses of funds to complete their respective Projects, subject only to commercially reasonable conditions, for all funding necessary for the successful completion of each Project, and (2) issuance of a building permit for each Project shall be a condition of closing for each Project, as further defined in the Purchase Agreements, provided that nothing in this Section 9(a) shall be construed as requiring concurrent closings for each Project. b. Prior to the end of the term of this Agreement, Developers will provide the City with the following deliverables: i. Demonstrate both a conditional financial and project commitment from HGSF to develop the Affordable Housing Project with 100% affordable housing units; and ii. Submit a joint planning pre-application for each component of the Project that has been deemed substantially complete by the City. iii. Final agreed upon Purchase Agreements. 10. Full Disclosure. Developers are required to make full disclosure to City of its principals; officers; major stockholders, partners or members; joint venturers; negotiators; development managers; consultants and directly involved managerial employees (collectively, “Developer Parties”). Any material change in the identity of the Developer Parties will be subject to the approval of City Manager and his or her designee, which will not be unreasonably withheld. Developers also agree to disclose both the type of planned 9 of 19 financing and identity of any lenders or mortgagees in connection with the financing of the Project. 11. Periodic Reporting to Governing Bodies. City will report periodically to the City Council and other local and regional agencies, on the status of negotiations, and Developers may be asked to attend such meetings to provide tho se bodies with a status update of their development efforts related to this Agreement. 12. No Binding Commitments. City has no legal obligation to grant any approvals or authorizations for the Purchase Agreements or any development thereon until the Purchase Agreements have been approved by the City Council. Such approvals, and any future approvals required as part of the entitlement process, are subject to completion of environmental review by City in accordance with CEQA, and City shall not take any discretionary actions committing it to a particular course of action in connection with each respective Project until City has completed, considered and certified/approved any additionally required CEQA environmental review documents for that particular Project. 13. Termination. a. Either Developer’s rights and obligations under this Agreement may be terminated with regard to a particular Developer by mutual consent of City and that particular Developer. b. City has the right to terminate this Agreement upon its good faith determination that a particular Developer is not proceeding diligently and in good faith to carry out its obligations pursuant to this Agreement in accordance with the provisions set forth in Section 1 of this Agreement, but only as to that particular Developer’s component of the Project. The City has the right to make this determination as to both Developers and accordingly has the right to terminate this Agremeent as to both Developers. If the City only terminates one Developer pursuant to this subsection, the rights of the non-terminated Developer under this Agreement shall not be affected. The City will provide written confirmation to the Developers of its determination as the case may be. c. Each Developer will have the right to terminate its rights and obligations under this Agreement as it pertains to their respective Project upon its good faith determination that City is not proceeding diligently and in good faith to carry out its obligations pursuant to this Agreement in accordance with the provisions set forth in Section 1 of this Agreement. Expressly subject to the City Council’s determination in its reasonable discretion which the City Council may exercise to terminate this Agreement as to both Developers, one Developer’s decision to terminate shall not affect the other Developer’s rights and obligations under this Agreement. d. Each Developer will have the right to terminate this Agreement if the results of that Developer’s investigation of the Property are unsatisfactory, in that Developer’s sole and absolute discretion, with respect to that Developer’s desired development activities, or if that Developer is unable to obtain other necessary approvals, rights or interests. If either Developer terminates under this provision, the City has the right to terminate the Agreement as to one or both Developers. If the City only 10 of 19 terminates one Developer pursuant to this subsection, the rights of the non- terminated Developer under this Agreement shall not be affected. The City will provide written confirmation to the Developers of its determination as the case may be. If FHW terminates this Agreement pursuant to this Section 13(d), then City will return a prorated portion of the Deposit as applicable to FHW in accordance with the provisions of Section 5(c) of this Agreement and the remaining balance of the Payment as applicable in accordance with the provisions of Section 5(d), and neither FHW nor City will have any further rights against or liability to each other under this Agreement, except as set forth in Section 16 of this Agreement. e. Neither Party will have the right to seek an award of damages if this Agreement is terminated pursuant to this Section. 14. Effect of Termination. Upon termination as provided herein, or upon the expiration of the Term and any extensions thereof without the respective affected Developers having successfully negotiated Purchase Agreements for their particular component of the Project, this Agreement will terminate, and there will be no further liability or obligation on the part of either of the Parties or their respective officers, employees, agents or other representatives; provided however, the provisions of Section 5 (Payment to City), Section 7(d) (Indemnification), Section 16 (Indemnification), and Section 20 (Brokers) will survive such termination. Provided further, that upon termination or expiration of this Agreement with respect to either Developer without the Parties having successfully negotiated a Purchase Agreement, that respective Developer will deliver to City any non -proprietary Developer’s Studies pursuant to the provisions of Section 7 of this Agreement. 15. Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement will be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Parties in accordance with this Section. All such notices will be sent by: a. Personal delivery, in which case notice is effective upon delivery; b. Certified or registered mail, return receipt requested, in which case notice will be deemed delivered on receipt if delivery is confirmed by a return receipt; c. Nationally recognized overnight courier, with charges prepaid or charged to the sender’s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; d. Facsimile transmission, in which case notice will be deemed delivered upon transmittal, provided that i. A duplicate copy of the notice is promptly delivered by first -class or certified mail or by overnight delivery, or ii. A transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile will be considered to have been received on the next business day if it is received after 5:00 p.m. recipient’s time or on a nonbusiness day. 11 of 19 City : City of South San Francisco Attn: City Manager 400 Grand Avenue South San Francisco, CA 94080 Tel (650) 877-8501 [email protected] with a copy to: City of South San Francisco Attn: ECD Director 400 Grand Avenue South San Francisco, CA 94080 Tel (650) 829-6620 [email protected] cc: [email protected] with a copy to: Meyers Nave Attn: Sky Woodruff 555 12th Street, Suite 1500 Oakland, CA 94607 Tel (510) 808-200 Fax (510) 444-1108 [email protected] FHW: Firehouse Work, LLC Attn: Dawn Merkes 211 Linden Ave South San Francisco, CA 94080 Tel (650) 871-0709 Fax (650) 871-7911 [email protected] with a copy to: Arent Fox LLP Attn: Frank Petrilli 55 2nd Street, 22st Floor San Francisco, CA 94105 Tel (415) 805-7970 [email protected] HGSF: Habitat for Humanity Greater San Francisco Attn: Maureen Sedonaen 500 Washington Street, Suite 250 San Francisco, CA 94111 Tel (415)625-1001 [email protected] with a copy to: Holland & Knight LLP Attn: Tamsen Plume 50 California Street, Suite 2800 12 of 19 San Francisco, CA 94111 Tel (415) 743-6941 [email protected] 16. Indemnification. Each Developer hereby covenants, on behalf of itself and its permitted successors and assigns, to indemnify, hold harmless and defend City and its elected and appointed officials, officers, agents, representatives and employees (“Indemnitees”) from and against all claims, costs (including without limitation reasonable attorneys’ fees and litigation costs) and liability, arising out of any breach of this Agreement by that respective Developer or arising out of or in connection with that respective Developer’s access to and entry on the Property pursuant to Section 7 of this Agreement; provided however, that neither Developer will have any indemnification obligation with respect to the gross negligence or willful misconduct of any Indemnitee, and that FHW shall not be obligated to indemnify the City in connection with the actions of HGSF, and HGSF shall not be obligated to indemnify the City in connection with the actions of FHW. 17. Severability. If any term or provision of this Agreement or the application thereof will, to any extent, be held to be invalid or unenforceable, such term or provision will be ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining terms and provisions of this Agreement or the application of such terms and provisions to circumstances other than those as to which it is held invalid or unenforceable unless an essential purpose of this Agreement would be defeated by loss of the invalid or unenforceable provision. 18. Entire Agreement; Amendments In Writing; Counterparts. This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral and written, between the Parties with respect to such subject matter. This Agreement may be amended onl y by a written instrument executed by the Parties or their successors in interest. This Agreement may be executed in multiple counterparts, each of which will be an original and all of which together will constitute one agreement. 19. Successors and Assigns; No Third-Party Beneficiaries. This Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and assigns; provided however, that neither Party will transfer or assign any of such Party’s rights hereunder by operation of law or otherwise without the prior written consent of the other Party, and any such transfer or assignment without such consent will be void. Notwithstanding the foregoing, each Developer is permitted to assign this Agreement without such written consent, provided that Developer assigns this Agreement to an entity that is controlled by that particular Developer. Subject to the immediately preceding sentence, this Agreement is not intended to benefit, and will not run to the benefit of or be enforceable by, any other person or entity other than the Parties and their permitted successors and assigns. 20. Brokers. Each Party warrants and represents to the other that no brokers have been retained or consulted in connection with the selection of the Developers. Each Party agrees to defend, indemnify and hold harmless the other Party from any claims, expenses, costs or 13 of 19 liabilities arising in connection with a breach of this warranty and representation. The terms of this Section will survive the expiration or earlier termination of this Agreement. 21. Amendments. Unless otherwise provided in this Agreement, the City Manager will be authorized to enter into all written amendments, consents or waivers under this Agreement on behalf of the City without further authorization by the City Council. Nothing herein, however, will be deemed to prevent the City Manager from requesting formal approval by the City Council if the City Manager, in his or her sole discretion, determines to seek such approval. 22. Captions. The captions of the sections and articles of this Agreement are for convenience only and are not intended to affect the interpretation or construction of the provisions hereof. 23. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. SIGNATURES ON FOLLOWING PAGE 14 of 19 CITY By: _______________________________ Mike Futrell City Manager ATTEST: By: _______________________________ Rosa Acosta City Clerk APPROVED AS TO FORM: By: _______________________________ Sky Woodruff City Attorney FHW By: _______________________________ Dawn Merkes, member Firehouse Work, LLC HGSF By: _______________________________ Maureen Sedonaen Habitat For Humanity Greater San Francisco, Inc. 15 of 19 Exhibit A 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: PARCEL ONE: Lots 26 and 27, in Block 141, as designated on the Map entitled "South San Francisco, San Mateo Co. Cal. Plat No. 1", which Map was filed in the Office of the Recorder of the County of San Mateo, State of California, on March 1, 1892, in Book 2 of Maps, Page 52, San Mateo County Records. APN: 012-335-100 PARCEL TWO: Beginning at a point marking the intersection of the Southwesterly line of Baden Avenue and the Southeasterly line of Cypress Avenue, said point being the most Northerly corner of Lot twelve (12) in Block 145, as said Avenues, Lot, and Block are designated on the Map entitled "South San Francisco, San Mateo Co. Cal. Plat No. 1", which Map was filed in the Office of the Recorder of the County of San Mateo, State of California, on March 1, 1892, in Book B of Maps, at Page 6 and a copy thereof entered in Book 2 of Maps, Page 52, San Mateo County Records. running thence from said point of beginning South 74° 27' East along said line of Baden Avenue 50 feet to a point thereon; thence leaving said last mentioned line South 15° 33' West 140 feet; thence North 74° 27' West 66.44 feet to the Southeasterly line of Cypress Avenue above mentioned; thence North 22° 14' 50" East along said last mentioned line 140.96 feet to the point of beginning. APN: 012-335-110 PARCEL THREE: Beginning at the Southwest corner of the intersection of Baden Avenue with Cypress Avenue, as shown upon that certain Map entitled: "South San Francisco San Mateo Co. Cal. Plat No. 1", which Map was filed in the Office of the County Recorder of the County of San Mateo, California, March 1, 1892, and recorded in Map Book No. 2 at Page 52; thence. Southerly along the Easterly line of Lot numbered, twenty-seven (27) in Block numbered one hundred forty-one (141), as shown upon said Map, to the Southerly line of said Lot numbered twenty- seven (27); thence Easterly and parallel to the Southerly line of Baden Avenue to the Westerly boundary line of Block numbered one hundred forty-five (145); thence Northerly along said Westerly boundary line of said Block numbered one hundred forty-five (145) to the Southerly boundary line of Baden Avenue; thence Westerly along the Southerly boundary line of Baden Avenue to the point of beginning. 16 of 19 17 of 19 Exhibit B DEVELOPMENT PROPOSAL 18 of 19 Exhibit B: Schedule of Performance Term / Performance Milestone Description Term of ENRA  180 days Parties Involved  Firehouse Work, LLC (FHW)  Habitat For Humanity Greater San Francisco, Inc. (HGSF) Proposed Project  Rehabilitation of existing Old Firehouse structure into a 9,200 square foot commercial space  Preserve historical significance of Old Firehouse structure  Construct an approximate 24-unit family-sized condominium project, of which 100% of the units will be affordable Price Offer  Purchase price for the FHW parcel to be determined during the ENRA period Deposit  $50,000 Deposit to be credited against future purchase price for the FHW parcel Payment  $30,000 for reimbursement of staff time expended towards FHW; if exhausted, FHW will be required to provide additional funds. City will waive Payment for staff time expended towards HGSF 100% affordable portion Entitlements  Begin pursuing during the ENRA period by filing a joint Pre-application  Separate entitlements for FHW and HGSF Lot Line Adjustment and ROW Vacation  City shall vacate Cypress Street Right of Way  Lot Line Adjustment creating two separate parcels shall occur prior to execution of Purchase Agreements. Purchase Agreements  Separate Purchase Agreements for FHW and HGSF  Execution of Purchase Agreements after submittal of a joint pre-application and completion of Lot Line Adjustment creating two separate parcels. Separate Projects  Purchase Agreements shall include provisions to be negotiated to allow the FHW and HGSF components of the Project to proceed independent of each other. Escrow  Separate Close of Escrows for FHW and HGSF to occur concurrent with issuance of respective Building Permits Development Schedule  To be determined during the ENRA and will be included as a Schedule of Performance in the Purchase Agreements 19 of 19 Prevailing Wage  HGSF’s self-help ownership model exempts HGSF projects from prevailing wage or union labor requirements.  FHW portion will be exempt from prevailing wage or union labor requirements. HGSF Financing Progress Reports  To be provided to the City every 30 days. These should outline any and all sources of financing the Developer has pursued in the previous 30 days. Progress Reports  To be provided to the City every 45 days, except for HGSD financing progress reports which shall be provided every 30 days. Performance Milestones  Negotiation of Purchase Agreements  Pro forma showing sources and uses of funds for the Project  Show evidence of how the Project is pursuing entitlements by providing a joint pre-application Due Diligence During the term of the ENRA the City and Developers shall further define and evaluate the project parameters:  The City shall provide Developers with any and all reports, studies and other documentation including any existing title policies, surveys, leases, structural reports, hazardous material reports, appraisals and other documents relating to the Property, Baden Avenue, and Airport Boulevard that are in City’s possession and control.  Developers shall have the opportunity to conduct due diligence in which to inspect the Property and to conduct any engineering, environmental, physical inspection and any other kind of investigation or study deems necessary.  Developers may at their own expense, conduct structural or hazardous material investigations of the existing improvements on the Property and City will allow access to the Property for this purpose.  Developers may at their own expense, conduct a subsurface investigation to confirm the findings in the Phase I environmental site assessment report provided by the City.  If a particular Developer is not satisfied with the results of any information it learns during this Due Diligence phase they may terminate their involvement in the ENRA without affecting the rights and obligations of the other Developer. In the case of FHW, the Deposit will be refunded to FHW, in accordance with Sections 5 and 13 of this Agreement. 3350831.2