HomeMy WebLinkAboutReso 30-2020 (20-22)City of South San Francisco P.O. Box 711 (City Hall,
400 Grand Avenue)
South San Francisco, CA
City Council
Resolution: RES 30-2020
File Number: 20-22 Enactment Number: RES 30-2020
RESOLUTION APPROVING THE FOURTH AMENDMENT TO
THE DEVELOPMENT AGREEMENT FOR 201-219 GRAND
AVENUE AND 418 LINDEN AVENUE PROPERTIES WITH ROEM
DEVELOPMENT CORPORATION.
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's Parcel Numbers ("APN") 012-314-010 ("418 Linden"); and
WHEREAS, the 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, in December 2015 the City approved entitlements for a residential project at 418 Linden
Avenue and a mixed-use project at 201 Grand Avenue ("Project"); and,
WHEREAS, in December 2016, following a competitive process, the City and Agency selected a
developer, ROEM Development Corporation ("Developer"), to develop the 418 Linden Avenue and 201
Grand Avenue Projects; and,
WHEREAS, pursuant to City Council Ordinance No. 1541-2017 ("DA Ordinance"), the City entered
into a Development Agreement between City and Developer ("Development Agreement") for the
development of a residential project at 418 Linden Avenue and a mixed-use project at 201-219 Grand
Avenue (together, the "Project").
WHEREAS, on March 28, 2018, Developer and City entered into that certain First Administrative
Amendment to Development Agreement ("First Amendment"), whereby the parties agreed to adjust the
deadlines within the Performance Schedule contained within the Development Agreement by 120 days
in order to provide sufficient time to undertake the complex demolition presented at 201-219 Grand
Avenue. On August 23, 2018, Developer and City entered into a Second Amendment to the Development
Agreement ("Second Amendment") to further adjust the deadlines within the Schedule of Performance
contained in the First Amendment to the Development Agreement and First Amendment to the Purchase
and Sale Agreements for the Project by 90 days.
WHEREAS, on March 21, 2019, Developer and City entered into that certain Third Amendment to the
Development Agreement ("Third Amendment"), whereby the parties agreed to adjust the deadlines
within the Performance Schedule contained in the Development Agreement in order to secure the
necessary affordable housing funding sources and modify the number of below market rate units within
the Project to
City of South San Francisco Page 1
File Number. 20-22 Enactment Number. RES 30-2020
render the Project one -hundred percent (100%) affordable conditioned upon Developer's completion of
certain pre -construction activities, specifically causing improvements and structures located on the
Grand Property to be demolished. The parties agreement regarding Developer's completion of
pre -construction activities was set forth in that certain Pre -Construction Activity Right of Access
Agreement ("Pre -Construction Agreement") attached as Exhibit A to the Third Amendment which
Exhibit C thereto governed the Schedule of Performance of such pre -construction activities.
WHEREAS, because the additional time requested adjusted the overall Project completion date by one
year, the City determined that the Third Amendment required notice and public hearing, and approval by
ordinance pursuant to Section 7.2(b) of the Development Agreement.
WHEREAS, therefore, on January 13, 2019, following a duly noticed public hearing, the Planning
Commission adopted Resolution No. 2841-2019 recommending that the City Council approve the Third
Amendment. With the Planning Commission's recommendation set forth in its Resolution No.
2841-2019, the City Council, after conducting a duly noticed public hearing, found that the Third
Amendment was consistent with the General Plan and Zoning Ordinance and conducted all necessary
proceedings in accordance with the City's rules and regulations for the approval of the Third
Amendment. In accordance with SSFMC section 19.60.120, the City Council, at a duly noticed public
hearing, adopted Ordinance No. 1571-2019, approving and authorizing the execution of the Third
Amendment.
WHEREAS, on October 1, 2019, Developer requested an extension of the deadline to demolish the
existing buildings on 201-219 Grand Avenue by September 11, 2019 as required by the Schedule of
Performance contained in the Pre -Construction Agreement. On October 10, 2019, the City conditionally
approved Developer's request to extend this deadline to April, 2020 via a response letter from the City
Manager.
WHEREAS, in particular, the City conditioned its approval on Developer's completion of accomplish
certain tasks by November 11, 2019. In conformance with the City's conditional approval, Developer
has now completed the tasks identified in the City's October 10, 2019 letter approving the extension of
the demolish deadline to April, 2020. The proposed amendment to Exhibit E to the Development
Agreement set forth herein reflects the City's prior approval of modification to this deadline.
WHEREAS, on December 3, 2019, Developer requested a fourth amendment to the Development
Agreement ("Fourth Amendment") to further extend the deadlines within the Schedule of Performance
contained in the Third Amendment to the Development Agreement and Third Amendment to the
Purchase and Sale Agreements for the Project by 200 days in order to secure the necessary affordable
housing funding sources.
WHEREAS, the City and the Developer have determined that the Schedule of Performance attached to
the Third Amendment as Exhibit E does not provide sufficient time to secure the necessary affordable
housing funding sources_
WHEREAS, the additional time requested in the Fourth Amendment to secure the necessary affordable
housing funding sources adjusts the overall Project completion date by 200 days. Pursuant to Section 7.2
of
City of South San Francisco Page 2
File Number: 20-22
Enactment Number: RES 30-2020
the Development Agreement, the City has determined that the amendment is minor and does not
substantially affect the existing term and schedule of performance, and the Fourth Amendment does not
require notice or public hearing and may be approved by City resolution.
NOW THEREFORE IT BE RESOLVED that the City Council of the City of South San Francisco does
hereby resolve as follows:
1. Determines that the recitals are true and correct.
2. Approves the Fourth Amendment to the Development Agreement for 201-219 Grand
Avenue and 418 Linden Avenue properties with ROEM Development Corporation, attached
hereto as Exhibit A.
Exhibit A: Fourth Amendment to the Development Agreement between ROEM Development
Corporation and the City of South San Francisco
At a meeting of the City Council on 3/11/2020, a motion was made by Councilmember Nagales, 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
Rosa Govea Acosta, City Clerk
City of South San Francisco Page 3
Recording Requested by
and when Recorded, return to:
City of South San Francisco
400 Grand Ave
South San Francisco, CA 94080
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
(SPACE ABOVE THIS LINE RESERVED FOR RECORDER’S USE)
FOURTH AMENDMENT
TO DEVELOPMENT AGREEMENT
This Fourth Amendment to Development Agreement (“Fourth Amendment”) is entered
into by and between ROEM Development Corporation, a California corporation (“Developer”) and
the CITY OF SOUTH SAN FRANCISCO, a municipal corporation (“City”) on this _____ day of
_________________, 2020.
RECITALS
A. Pursuant to City Council Ordinance No. 1541-2017 (“DA Ordinance”), the City entered
into a Development Agreement between City and Developer (“Development Agreement”) for the
development of a residential project at 418 Linden Avenue and a mixed-use project at 201-219
Grand Avenue (together, the “Project”).
B. On March 28, 2018, Developer and City entered into that certain First Administrative
Amendment to Development Agreement (“First Amendment”), whereby the parties agreed to
adjust the deadlines within the Performance Schedule contained within the Development Agreement
by 120 days in order to provide sufficient time to undertake the complex demolition presented at
201-219 Grand Avenue. On August 23, 2018, Developer and City entered into a Second
Amendment to the Development Agreement (“Second Amendment”) to further adjust the deadlines
within the Schedule of Performance contained in the First Amendment to the Development
Agreement and First Amendment to the Purchase and Sale Agreements for the Project by 90 days.
C. On March 21, 2019, Developer and City entered into that certain Third Amendment to the
Development Agreement (“Third Amendment”), whereby the parties agreed to adjust the deadlines
within the Performance Schedule contained in the Development Agreement in order to secure the
necessary affordable housing funding sources and modify the number of below market rate units
within the Project to render the Project one-hundred percent (100%) affordable conditioned upon
Developer’s completion of certain pre-construction activities, specifically causing improvements
and structures located on the Grand Property to be demolished. The parties agreement regarding
Developer’s completion of pre-construction activities was set forth in that certain Pre-Construction
Activity Right of Access Agreement (“Pre-Construction Agreement”) attached as Exhibit A to the
Third Amendment which Exhibit C thereto governed the Schedule of Performance of such pre-
construction activities.
D. Because the additional time requested adjusted the overall Project completion date by one
year, the City determined that the Third Amendment required notice and public hearing, and
approval by ordinance pursuant to Section 7.2(b) of the Development Agreement.
E. Therefore, on January 13, 2019, following a duly noticed public hearing, the Planning
Commission adopted Resolution No. 2841-2019 recommending that the City Council approve
the Third Amendment. With the Planning Commission’s recommendation set forth in its
Resolution No. 2841-2019, the City Council, after conducting a duly noticed public hearing, found
that the Third Amendment was consistent with the General Plan and Zoning Ordinance and
conducted all necessary proceedings in accordance with the City’s rules and regulations for the
approval of the Third Amendment. In accordance with SSFMC section 19.60.120, the City Council,
at a duly noticed public hearing, adopted Ordinance No. 1571-2019, approving and authorizing the
execution of the Third Amendment.
F. On October 1, 2019, Developer requested an extension of the deadline to demolish the
existing buildings on 201-219 Grand Avenue by September 11, 2019 as required by the Schedule of
Performance contained in the Pre-Construction Agreement. On October 10, 2019, the City
conditionally approved Developer’s request to extend this deadline to April, 2020 via a response
letter from the City Manager.
G. In particular, the City conditioned its approval on Developer’s completion of accomplish
certain tasks by November 11, 2019. In conformance with the City’s conditional approval,
Developer has now completed the tasks identified in the City’s October 10, 2019 letter approving
the extension of the demolish deadline to April, 2020. The proposed amendment to Exhibit E to
the Development Agreement set forth herein reflects the City’s prior approval of modification to
this deadline.
H. On December 3, 2019, Developer requested a fourth amendment to the Development
Agreement (“Fourth Amendment”) to further extend the deadlines within the Schedule of
Performance contained in the Third Amendment to the Development Agreement and Third
Amendment to the Purchase and Sale Agreements for the Project by 200 days in order to secure the
necessary affordable housing funding sources.
I. The City and the Developer have determined that the Schedule of Performance attached
to the Third Amendment as Exhibit E does not provide sufficient time to secure the necessary
affordable housing funding sources.
J. The additional time requested in the Fourth Amendment to secure the necessary
affordable housing funding sources adjusts the overall Project completion date by 200 days.
Pursuant to Section 7.2 of the Development Agreement, the City has determined that the
amendment is minor and does not substantially affect the existing term and schedule of
performance, and the Fourth Amendment does not require notice or public hearing and may be
approved by City resolution.
NOW, THEREFORE, in consideration of the mutual covenants and promises of the
parties herein contained, the City and Developer agree 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 Section 3.6. Section 3.6 to the Development Agreement is revised to read
as follows, with additions in double underline and deletions in strikethrough:
4. 3.6 Affordable Housing. Developer acknowledges that as required by density bonus
requirements and the City’s provision of financial assistance, upon Developer's acquisition
of the Properties, the Properties will be subject to recorded covenants that will restrict use
of the Properties for a term of not less than fifty-five (55) years, commencing upon the
issuance of a final certificate of occupancy for the Project, as further set forth in the Linden
Affordable Housing Agreement (“Linden AHA”) and the Grand Affordable Housing
Agreement (“Grand AHA''), each substantially in the forms attached hereto as Exhibits C
and D (the “AHAs''), each of which shall be recorded in the Official Records on the date
that Developer acquires the Project Site. The AHAs shall provide that not less than twenty
percent (20%) of the residential units in the Project as a whole shall be rented at an
affordable cost (as defined in the respective AHA) and also shall ensure that use of any city
financial assistance shall be utilized by Developer in a manner consistent with those terms
imposed on the use of said City financial assistance. The AHAs shall provide that one
hundred percent (100%) of the residential units in the Project not used as a “manger unit”
shall be rented at an affordable cost (as defined in the respective AHA).Amendment to
Section 6.12. Section 6.12 to the Development Agreement is revised to read as follows,
with additions in double underline and deletions in strikethrough:
6.2 No Condominium Conversion. City acknowledges and agrees that the
residential component of the Project, other than the manager’s units the Below Market
Rate (BMR) units, is proposed for, approved as, and will be constructed as market-rate
rental Below Market Rate (BMR) housing. Developer shall not convert the residential
units in the Project to condominium or cooperative ownership or sell condominium or
cooperative rights to the residential portion of the Project or any part thereof unless
Developer obtains the City's consent and meets the City’s affordability requirements in
effect at the time. City prior written consent shall be required with respect to the sale or
condominium conversion of the retail/commercial portion of the Project or any part
thereof, and shall not be unreasonably withheld, conditioned or delayed provided that
Developer meets all applicable requirements.
5. Further Amendment to Exhibit E. Exhibit E to the Development Agreement is revised
to read as follows, with additions in double underline and deletions in strikethrough as set
forth below. Upon request of the Developer, the City Manager may extend any of the dates
set forth on Exhibit E in the City Manager’s reasonable discretion up to an additional 90
days:
EXHIBIT E
Developer’s Project Schedule of Performance
Milestone Deadline
1 50% Construction Drawings (CDs) and
Proforma
May 15, 2018
(Completed)
2 100% CDs submitted for building permits
and Updated Proforma
July 14, 2018
(Completed)
3 Construction Financing Secured and
Construction Contract Executed
June 18, 2020
November 30, 2019
4 If building permit application and 100%
CDs were completed in #2, building permit
ready for issuance
June 29, 2020
December 11, 2019
5 Close of Escrow and Property Conveyance By July 8, 2020
By December 21, 2019
Within Ten (10) Days from Satisfaction
of All Contingencies
6a Grand Avenue Demolition Start May 14, 2019
(Completed)
6b Grand Avenue Demolition Complete on or before October 22, 2020
September 11, 2019
7 Construction Start October 22, 2020
April 5, 2020
8 Construction Completion March 17, 2022
August 31, 2021
6. Effect of Fourth Amendment. Except as expressly modified by this Fourth Amendment,
the Development Agreement shall continue in full force and effect according to its terms,
and Developer and City hereby ratify and affirm all their respective rights and obligations
under the Development Agreement, including but not limited to Developer’s indemnification
obligations as set forth in Section 13 of the Development Agreement. In the event of any
conflict between the Fourth Amendment or the Development Agreement, the provisions of
this Fourth Amendment shall govern.
7. 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.
8. Recordation. The City shall record a copy of this Fourth Amendment together with
recordation of the Development Agreement.
9. 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.
10. 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.
11. 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
12. 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.
IN WITNESS WHEREOF, this Fourth Amendment has been entered into by and between
Developer and City as of the date and year first above written.
[SIGNATURES ON THE FOLLOWING PAGE]
ROEM Development Corporation,
a California Corporation
By: ROEM Development Corporation,
a California Corporation, President
By: ______________________________________________________________
Name: ____________________________________________________________
Title: _____________________________________________________________
Date: _____________________________________________________________
CITY OF SOUTH SAN FRANCISCO
By:
Name: Charles Michael Futrell
Title: City Manager
Date:
APPROVED AS TO FORM:
By: ___________________
Sky Woodruff,
City Attorney
ATTEST:
By: ____________________
Rosa Govea Acosta
City Clerk
3490952.1