Loading...
HomeMy WebLinkAboutReso 32-2020 (20-55)City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA City Council Resolution: RES 32-2020 File Number: 20-55 Enactment Number: RES 32-2020 RESOLUTION APPROVING THE FOURTH AMENDMENT TO THE 201-219 GRAND AVENUE PURCHASE AND SALE AGREEMENT WITH ROEM DEVELOPMENT CORPORATION. WHEREAS, on June 29, 2011, the Legislature of the State of California ("State") adopted Assembly Bill xl 26 ("AB 26"), which amended provisions of the State's Community Redevelopment Law (Health and Safety Code sections 33000 et seq.) ("Dissolution Law"), pursuant to which the former Redevelopment Agency of the City of South San Francisco ("City") was dissolved on February 1, 2012; and WHEREAS, the City elected to become the Successor Agency to the Redevelopment Agency of the City of South San Francisco ("Successor Agency"); and WHEREAS, pursuant to Health and Safety Code Section 34191.5(c)(2)(C), property shall not be transferred to a successor agency, city, county or city and county, unless a Long Range Property Management Plan ("LRPMP") has been approved by the Oversight Board and the California Department of Finance ("DOF"); and WHEREAS, in accordance with the Dissolution Law, the Successor Agency prepared a LRPMP, which was approved by a resolution of the Oversight Board for the Successor Agency to the Redevelopment Agency of the City of South San Francisco ("Oversight Board") on May 21, 2015, and was approved by the DOF on October 1, 2015; and WHEREAS, consistent with the Dissolution Law and the LRPMP, certain real properties located in the City of South San Francisco, that were previously owned by the former Redevelopment Agency, were transferred to the Successor Agency ("Agency Properties"); and WHEREAS, on October 18, 2016, the City entered into an Amended and Restated Master Agreement for Taxing Entity Compensation ("Compensation Agreement") with the various local agencies who receive shares of property tax revenues from the former redevelopment project area ("Taxing Entities"), which provides that upon approval by the Oversight Board of the sale price, and consistent with the LRPMP, the proceeds from the sale of any of the Agency Properties will be distributed to the Taxing Entities in accordance with their proportionate contributions to the Real Property Tax Trust Fund for the former Redevelopment Agency; and WHEREAS, on February 8, 2017, the City adopted Resolution 16-2017 approving the transfer of the Agency Properties from the Successor Agency to the City and in accordance with the requirements set City of South San Francisco Page 1 File Number., 20-55 Enactment Number. RES 32-2020 forth in the LRPMP, and on February 21, 2017, the Oversight Board adopted a resolution approving the transfer of the redevelopment properties from the Successor Agency to the City; and WHEREAS, consistent with the LRPMP and the Oversight Board resolution, the Successor Agency and City executed and recorded grant deeds transferring the Agency Properties to the City; and WHEREAS, the City of South San Francisco ("City") is also the owner of former 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 012-316-090 (collectively, "201 Grand Avenue"); 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 ("BMR") 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 Seller committed grant funding of Two Million Four Hundred and Fifty Thousand Dollars ($2,450,000) 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, WHEREAS, Seller has agreed to a Two Million Four Hundred and Fifty Thousand Dollars ($2,450,000) loan from the City's Affordable Housing Asset Fund; and, City of South San Francisco Page 2 File Number: 20-55 Enactment Number: RES 32-2020 WHEREAS, Buyer has increased the number of Below Market Rate ("BMR") units from nine (9) to forty-six (46) and has not requested to change the purchase price of $1,200,000; 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 proposed actions in this Resolution are consistent with the Long Range Property Management Plan. 3. The Fourth Amendment to the Purchase and Sale Agreement is attached hereto as Exhibit A, and is incorporated herein and hereby approved. 4. The City Manager, or his designee, is authorized to execute the Fourth Amendment and any necessary related documents. 5. 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 201 Grand Purchase and Sale Agreement At a meeting of the City Council on 3/11/2020, a motion was made by Councilmember Nicolas, seconded by Councilmember Nagales, 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 4L 1,3,4 �4k fsa Govea Acosta, City Clerk City of South San Francisco Page 3 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 201-219 Grand Avenue, South San Francisco, California (Assessor’s Parcel Numbers 012-316-110, 012-316-100, 012-316-090 and 012-316-080) (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 – 201-219 GRAND AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA Page 2 of 7 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 F. Recital F of the Agreement is revised to read as follows, with additions in double underline and deletions in strikethrough: F. The City desires to sell the Grand Property to Buyer for the construction of a high density, mixed use project including 467- residential units, nine (9) forty-six (46) of which are required to be made available at below market rates, and approximately 6,000 square feet of ground floor commercial units (the “Grand Project”) as further described in the Grand 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 G. Recital G of the Agreement is revised to read as follows, with additions in double underline and deletions in strikethrough: G. 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) Two Million and Four Hundred and Fifty Thousand Dollars ($2,450,000.00) 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 Grand 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: FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT – 201-219 GRAND AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA Page 3 of 7 6. 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: 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 7. 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) FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT – 201-219 GRAND AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA Page 4 of 7 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. 8. 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. 9. 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 OneTwo Million Seven Hundred Four Hundred and Fifty Thousand Dollars ($12,7450,000.00) for the City Grants Loan. 10. 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 OneTwo Million Seven Hundred Four Hundred and Fifty Thousand Dollars ($12,7450,000.00) 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. 11. 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. 12. 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 FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT – 201-219 GRAND AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA Page 5 of 7 or otherwise convey its interest prior to the Close of Escrow, as long as this Agreement is in force. 13. 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 FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT – 201-219 GRAND AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA Page 6 of 7 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 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 – 201-219 GRAND AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA Page 7 of 7 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 3464066.1