HomeMy WebLinkAboutReso 31-2020 (50-54)City of South San Francisco P.O. Box 711 (City Hall,
• 400 Grand Avenue)
South San Francisco, CA
City Council
Resolution: RES 31-2020
File Number: 20-54 Enactment Number: RES 31-2020
RESOLUTION APPROVING THE FOURTH AMENDMENT TO THE
418 LINDEN PURCHASE AND SALE AGREEMENT WITH ROEM
DEVELOPMENT CORPORATION.
WHEREAS, the City of South San Francisco ("Seller") and ROEM Development Corporation ("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"); and,
WHEREAS, 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; and,
WHEREAS, on March 21, 2019, Seller and Buyer entered into that certain Third Amendment to
Purchase and Sale Agreement ("Third Amendment") based upon Buyer's proposal to modify the number
of below market rate units within the Project which was desirable to the Seller and whereby the parties
agreed to adjust the deadlines within the Buyer's Schedule of Performance for an additional 12 -month
period to allow Buyer to seek additional financing for such proposal; and,
WHEREAS, on December 3, 2019, Developer requested a fourth amendment to the Purchase and Sale
Agreement ("Fourth Amendment") to further extend the deadlines Buyer's Schedule of Performance
contained in the Third Amendment to the Purchase and Sale Agreements for the Project by 200 days in
order to secure the necessary affordable housing funding sources; and,
WHEREAS, the Seller and Buyer have determined that Buyer's Schedule of Performance does not
provide sufficient time to secure the necessary affordable housing funding sources and now desire to
amend certain provisions of the Agreement, as amended by the First and Second and Third Amendment,
to reflect this understanding, as set forth in the Fourth Amendment, attached hereto as Exhibit A; and,
WHEREAS, at the time the PSA was negotiated, Buyer offered Five Hundred Thousand Dollars
($500,000) for the purchase of the property and Seller committed grant funding of One Million Two
Hundred and Twenty Five Thousand Dollars ($1,225,000.00) from the City's Affordable Housing Asset
Fund to assist in the construction of the affordable housing units ("City Grant"); and,
WHEREAS, Buyer has requested that the City Grant be converted to a loan in order to leverage other
funding; and,
City of South San Francisco Page 1
File Number: 20-54 Enactment Number: RES 31-2020
WHEREAS, Seller has agreed to a One Million and Fifty Thousand Dollars ($1,050,000.00) loan from
the City's Affordable Housing Trust Fund; and,
WHEREAS, Buyer has increased the number of Below Market Rate ("BMR") units from eight to
thirty-six and requested a City donation of the land ("Land Donation"); and,
WHEREAS, in order to offset the loss of the Land Donation, Seller has agreed to forgive Five Hundred
and Fifty Thousand Dollars ($550,000) with Five Hundred Thousand Dollars ($500,000) being repaid
within five years; and,
WHEREAS, Buyer and Seller wish to amend the Schedule of Performance that provides additional time
to secure the necessary affordable housing funding sources and adjusts the overall Project completion
date by 200 days.,
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco as
follows:
1. The foregoing recitals are true and correct and incorporated herein as part of this Resolution.
2. The Fourth Amendment to the Purchase and Sale Agreement is attached hereto as Exhibit A,
and is incorporated herein and hereby approved.
3. The City Manager, or his designee, is authorized to execute the Fourth Amendment and any
necessary related documents.
4. The City Manager, or his designee, is authorized take any and all other actions necessary to
implement this intent of this Resolution, subject to approval as to form by the City
Attorney.
Exhibit A: Fourth Amendment to the 418 Linden Purchase and Sale Agreement
At a meeting of the City Council on 3/11/2020, a motion was made by Vice Mayor Addiego, seconded by
Councilmember Nicolas, that this Resolution be approved. The motion passed.
Yes: 4 Mayor Garbarino, Vice Mayor Addiego, Councilmember Nagales, and
Councilmember Nicolas
No: 1 Councilmember Matsumoto
Attest by �4m 117vw 4�4k
�osa Govea Acosta, City Clerk
City of South San Francisco Page 2
FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT
This Fourth Amendment to Purchase and Sale Agreement (this “Fourth
Amendment”) is made effective as of _________, 2020 (“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.”
RECITALS
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.
C. On March 21, 2019, Seller and Buyer entered into that certain Third
Amendment to Purchase and Sale Agreement (“Third Amendment”) based upon
Buyer’s proposal to modify the number of below market rate units within the Project
which was desirable to the Seller and whereby the parties agreed to adjust the deadlines
within the Buyer’s Schedule of Performance for an additional 12-month period to allow
Buyer to seek additional financing for such proposal.
D. On December 3, 2019, Developer requested a fourth amendment to the
Purchase and Sale Agreement (“Fourth Amendment”) to further extend the deadlines
Buyer’s Schedule of Performance contained in the Third Amendment to the Purchase and
Sale Agreements for the Project by 200 days in order to secure the necessary affordable
housing funding sources.
E. The Seller and Buyer have determined that Buyer’s Schedule of
Performance does not provide sufficient time to secure the necessary affordable housing
funding sources and now desire to amend certain provisions of the Agreement, as
amended by the First and Second and Third 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
FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT –
418 LINDEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA
Page 2 of 8
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:
AMENDMENT TO AGREEMENT
1. Recitals. The foregoing recitals are true and correct and hereby incorporated
herein.
2. Defined Terms. All capitalized terms not defined herein shall have the
meanings ascribed to them in the Development Agreement.
3. Amendment to Recital B. Recital B of the Agreement is revised to read as
follows, with additions in double underline and deletions in strikethrough:
B. The City desires to sell the Linden Property to Buyer for the construction of a
high density, 387-unit multi-family apartment building (the “Linden Project”), eight (8)
thirty-six (36) units of which are required to be made available at below market rates as
further described in the Linden Affordable Housing Agreement substantially in the form
attached hereto as Exhibit B (the “AHA”). Development of the Linden Project is
described and defined in the Development Agreement between the City and Buyer,
substantially in the form attached hereto as Exhibit C (the “DA”). Upon Closing, the
AHA and the DA will be recorded in the official records of San Mateo County.
4. Amendment to Recital C. Recital C of the Agreement is revised to read as
follows, with additions in double underline and deletions in strikethrough:
C. In order to assist in the construction of affordable units, upon Closing, Seller will
provide Buyer a grant loan in the amount Five Hundred and Twenty Five Thousand
Dollars ($525,000.00) One Million and Fifty Thousand Dollars ($1,050,000.00) from
City Affordable Housing In-Lieu Fees, and a grant in the amount of One Million Two
Hundred and Twenty Five Thousand ($1,225,000.00) from City Affordable Housing
Bond Funds to partially finance the Project on the Linden Property (“City Grants
Loan”), as set forth in this Agreement, the Loan Agreement between the City and Buyer
substantially in the form attached hereto as Exhibit F (“Loan Agreement”) and the DA.
The terms and conditions associated with Buyer’s use of the City Grant Loan after the
Closing are set forth in the DA, the Loan Agreement and the AHA.
5. Amendment to Section 2.2. Section 2.2 of the Agreement is revised to read as
follows, with additions in double underline and deletions in strikethrough:
2.2 The purchase price for the Property to be paid by Buyer to City is five hundred
thousand dollars one dollar ($500,0001.00), payable in all cash at Closing.
6. Amendment to Section 3.2. Section 3.2 of the Agreement is revised to read as
follows, with additions in double underline and deletions in strikethrough:
FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT –
418 LINDEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA
Page 3 of 8
3.2 Opening of Escrow; Effective Date. Within three (3) business days of the date that
Seller has obtained approval of this executed Agreement by the City Council, approval of
the sale price by the Oversight Board, and approval of the executed DA and the executed
AHA by the City Council, Seller shall open an escrow account with Escrow Holder by
depositing this executed Agreement, the executed DA and the executed AHA into
Escrow. The date the executed Agreement, DA and AHA are received by Escrow Holder,
as established and confirmed by Escrow Holder, shall be deemed the “Effective Date.”
By such deposit Escrow Holder is authorized and instructed to act in accordance with the
provisions of this Agreement, which Agreement shall constitute Escrow Holder’s escrow
instructions.
7. Further Amendment to Section 5.1. Section 5.1 of the Agreement is revised to
read as follows, with additions in double underline and deletions in
strikethrough:
5.1 Buyer’s Schedule of Performance. 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:
FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT –
418 LINDEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA
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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) June 18, 2020
November 30, 2019
Buyer shall have secured Construction Financing and
executed a contract with a general contractor for
demolition and construction of the Project in
accordance with the final plans
(d) By July 8, 2020
December 21, 2019
Within 10 days
from satisfaction
of all
contingencies on
December 11, 2019
Buyer and Seller shall have satisfied (or waived in
writing) all contingencies to Closing set forth in this
Agreement, and be prepared to Close Escrow
8. Amendment to Section 6.1. Section 6.1 of the Agreement is revised to read as
follows, with additions in double underline and deletions in strikethrough:
6.1 Closing. The close of escrow (the “Closing” or “Close of Escrow”) shall be
deemed to occur on the date the Grant Deed is recorded and Buyer’s funds are released to
Seller and the City Grants Loan are is released to Buyer, which shall occur within ten (10)
days of the date that all of Buyer’s contingencies to Closing set forth in Section 6.2 and
Seller’s contingencies to Closing set forth in Section 6.3 have been satisfied, or waived in
writing, or such other date that the Parties agree in writing, each in their sole discretion.
FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT –
418 LINDEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA
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9. Amendment to Section 6.2(e). Section 6.1(e) of the Agreement is revised to read
as follows, with additions in double underline and deletions in strikethrough:
6.2 (e) Seller has deposited the City Grants Loan into Escrow with
instructions to release the City Grants Loan to Buyer, only upon the Closing.
10. Amendment to Section 6.4.1.1. Section 6.4.1.1 of the Agreement is revised to
read as follows, with additions in double underline and deletions in strikethrough:
6.4.1.1 Deliveries by Seller. At or before Closing, Seller shall deposit the
following into escrow: (i) one (1) original executed and acknowledged Grant Deed; (ii)
one (1) duly executed non-foreign certification for the Property in accordance with the
requirements of Section 1445 of the Internal Revenue Code of 1986, as amended; (iii) one
(1) duly executed California Form 593-W Certificate for the Property or comparable non-
foreign person affidavit to satisfy the requirements of California Revenue and Taxation
Code Section 18805(b) and 26131; (iv) title to all Bridging Documents; and (v) funds in
the total amount of One Million Seven Hundred Fifty Thousand Dollars ($1,7050,000.00)
for the City Grants Loan.
11. Amendment to Section 6.4.1.2. Section 6.4.1.2 of the Agreement is revised to
read as follows, with additions in double underline and deletions in strikethrough:
6.4.1.2 Condition to disbursement of City GrantsLoan. City’s obligation to
provide Seller with City Grants Loan in the total amount of One Million Seven Hundred
Fifty Thousand Dollars ($1,7050,000.00) at the Closing Date is conditioned upon Close of
Escrow. If the Closing does not occur, for any reason whatsoever, the City has no obligation
to deliver the City Grants Loan to Buyer.
12. Amendment to Section 6.4.3(d) Section 6.4.3(d) of the Agreement is revised to
read as follows, with additions in double underline and deletions in strikethrough:
6.4.3(d) Disburse to Buyer the City Grants Loan.
13. Amendment to Section 7.1(b). Section 7.1(b) of the Agreement is revised to read
as follows, with additions in double underline and deletions in strikethrough:
7.1(b) Encumbrances. Other than the approval and recordation of the DA, the
Loan Agreement, Deed of Trust, Note and AHA at Closing, Seller has not alienated,
encumbered, transferred, mortgaged, assigned, pledged, or otherwise conveyed its interest
in the Property or any portion thereof, nor entered into any Agreement to do so, and there
are no liens, encumbrances, mortgages, covenants, conditions, reservations, restrictions,
easements or other matters affecting the Property, except for the Permitted Exceptions.
Seller will not, directly or indirectly, alienate, encumber, transfer, mortgage, assign, pledge
or otherwise convey its interest prior to the Close of Escrow, as long as this Agreement is
in force.
FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT –
418 LINDEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA
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14. Amendment to Section 7.3(c). Section 7.3(c) of the Agreement is revised to read
as follows, with additions in double underline and deletions in strikethrough:
7.3(c). Buyer accepts and acknowledges that after the Closing, the Property will be
subject to the DA, Loan Agreement, Deed of Trust, Note and AHA, which will be recorded
against the Property at Closing.
GENERAL PROVISIONS
1. No Interpretation Against Drafter. Each party has received independent
legal advice from its attorneys with respect to the advisability of executing this Fourth
Amendment and the meaning of the provisions hereof. The provisions of this Fourth
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.
2. Effect of Fourth Amendment. Except as expressly modified by this
Fourth Amendment, the Agreement shall continue in full force and effect according to its
terms, and Buyer and Seller hereby ratify and affirm all their respective rights and
obligations under the Agreement, including but not limited to Buyer’s indemnification
obligations as set forth in Sections 11 and 15.5 of the Agreement. In the event of any
conflict between the Fourth Amendment or the Agreement, the provisions of this Fourth
Amendment shall govern.
3. Binding Agreement. This Fourth Amendment shall be binding upon and
inure to the benefit of the heirs, administrators, executors, successors in interest, and
assigns of each of the parties hereto. Any reference in this Fourth Amendment to a
specifically named party shall be deemed to apply to any successor, administrator,
executor, or assign of such party who has acquired an interest in compliance with the terms
of this Fourth Amendment or under law.
4. Recordation. The City shall record a copy of this Fourth Amendment
together with recordation of the Agreement.
5. Counterparts. This Fourth Amendment may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which, when taken
together, shall constitute the same document.
6. California Law. This Fourth Amendment shall be governed by and
interpreted in accordance with the laws of the State of California. Any action to enforce or
interpret this Agreement shall be filed and heard in the Superior Court of San Mateo
County, California.
7. Invalidity. Any provision of this Fourth Amendment that is determined by
a court of competent jurisdiction to be invalid or unenforceable shall be deemed severed
from this Fourth Amendment, and the remaining provisions shall remain in full force and
effect as if the invalid or unenforceable provision had not been a part hereof
FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT –
418 LINDEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA
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8. Headings. The headings used in this Fourth Amendment are for
convenience only and shall be disregarded in interpreting the substantive provisions of this
Fourth Amendment.
[SIGNATURES ON THE FOLLOWING PAGE]
FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT –
418 LINDEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA
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IN WITNESS WHEREOF, the parties have executed this Fourth Amendment as
of the Effective Date.
BUYER:
ROEM Development Corporation,
a California corporation
By: ______________________
Name: Alex Sanchez
Its Executive Vice President
SELLER:
CITY OF SOUTH SAN FRANCISCO,
a municipal corporation
By: __________________________
Name: Charles Michael Futrell
Its City Manager
The Title Company has executed this Fourth Amendment to acknowledge its agreement to
act in accordance with the terms of this Fourth Amendment.
Chicago Title Insurance Company
By:
Name: Sherri Keller
Title: Escrow Officer
3463896.1