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HomeMy WebLinkAboutReso 158-2020 (20-802)Confidential Real Property Negotiations- Working Draft Only RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager APNS: __________________________________ (Space Above This Line for Recorder’s Use Only) Exempt from Recording Fee per Government Code § 27383 TRANSFER OF DEVELOPMENT RIGHTS AGREEMENT THIS TRANSFER OF DEVELOPMENT RIGHTS AGREEMENT (the “Agreement”) is entered into as of _____________________, 20___ (“Effective Date”) by and between the City of South San Francisco (“City”), a municipal corporation, and KR Oyster Point I, LLC, a Delaware limited liability company (“Developer”). City and Developer are collectively referred to as “Parties”. RECITALS A. Developer has certain legal and/or equitable interests in the real property consisting of approximately forty-six (46) acres located in the Oyster Point area of the City of South San Francisco, San Mateo County, California, as more particularly described in Exhibit A and as diagrammed in Exhibit B, both attached hereto and incorporated herein (the “Developer Property”). Developer Property is located in the Oyster Point Specific Plan District, Planning Area 1, which consists largely of the western portion of the Oyster Point Specific Plan District, as defined under Chapter 20.230.002 of the South San Francisco Municipal Code. B. The City is the owner of the real property adjacent to the Developer Property, commonly known as the Oyster Point Marina property and more particularly described in Exhibit C attached hereto and incorporated herein. City Property is located in the Oyster Point Specific Plan District, Planning Area 2, which consists largely of the eastern portion of the Oyster Point Specific Plan District, as defined under Chapter 20.230.002 of the South San Francisco Municipal Code. C. Developer and City are parties to that certain Disposition and Development Agreement effective March 23, 2011, and a separate Development Agreement effective ___________ (San Mateo County Recorder’s Document No. ___________), where Developer acquired its interest thereunder by assignment pursuant to an Assignment Agreement dated __________ (San Mateo County Recorder’s Document No. ______) (collectively “Development Agreements”), for the development of certain office/research and development campus and substantial public amenities at the Developer and City properties. The development consists of development of the improvements, amenities, and facilities described in the Development Agreements as comprising the Phase I City (Phase IC) and Phases I, II, III, and IV Developer (Phases ID, IID, IIID, and IVD) Improvements. D. On March 23, 2011, the City of South San Francisco (“City”) adopted, among other entitlement approvals: Resolution No. 46-2011 certifying the 2011 Oyster Point Specific Plan and Phase 1 Project Environmental Impact Report (“EIR”) (State Clearinghouse No. 2010022070) 2 including certain Mitigation Monitoring and Reporting Plan (“MMRP”); Ordinance No. 1437-2011 repealing the then-existing Oyster Point Marina Specific Plan District, and adopting the Oyster Point Specific Plan; and Resolution 48-2011 approving a Specific Plan Appendix, Precise Plan, Design Review, and Preliminary Transportation Demand Management Plan, for the proposed developments described above. E. Under Phases ID – IVD, Developer intends to develop the Developer Property for mixed uses including a life sciences campus consisting of research and development and office buildings, and flexible use retail and/or amenity space, together with certain public amenities, including public open space and recreational areas and other uses (the “Project”). F. Chapter 20.230 of the South San Francisco Municipal Code sets forth certain development standards for the Oyster Point Specific Plan District, Planning Area 2, which provides, among other requirements, that: (1) allowable land uses includes business, professional, and walk-in clientele office uses, subject to approval of a Precise Plan; (2) an allowable Floor Area Ratio of 1.6 for hotel uses, 1.0 for office uses, and 0.5 for all other uses, which may be increased to 2.2 for hotel uses, 1.6 for office uses, and 1.0 for all other uses subject to approval of a transportation demand management plan and finding that the proposed development is consistent with the design standards established in the General Plan, including the East of 101 Area Plan; and (3) a maximum building coverage of sixty percent (60%) of the development site. G. Pursuant to the terms of the Development Agreements and in accordance with Chapter 20.230 requirements, Developer is entitled to develop Phases ID - IVD for up to Two Million Two Hundred and Twenty-Five Thousand (2,225,000) square feet of office and research and development (R&D) uses on Developer Property. H. Developer seeks development rights for an additional 150,000 square feet of development capacity in order to construct additional atriums, service areas, and campus amenities. AGREEMENT NOW, THEREFORE, in consideration of the premises, covenants and provisions set forth herein, the receipt and adequacy of which is hereby acknowledged, the parties agree as follows: Section 1. Transfer of Development Rights. a. Transfer of Development Capacity. Pursuant to the terms of this Agreement, an additional One Hundred and Fifty Thousand (150,000) square feet of development area capacity (“Transferred Development Rights”) shall be transferred from City Property located in Planning Area 2 and in the “Office” land use, as set forth in South San Francisco Municipal Code Section 20.230.004, allocated to Planning Area 2 of the Oyster Specific Plan District, to Developer Property located in Planning Area 1. Developer shall be entitled to develop the Transferred Development Rights square footage specifically for development of atriums, service areas, and campus amenities within Developer Property in Planning Area 1 in the Oyster Point Specific Plan District, and on the properties owned by Developer at 345-349 Oyster Point Blvd., South San Francisco. The Transferred Development Rights shall not be used to construct any other types of developments or improvements without prior written approval by the Chief Planner. 3 b. Consideration. As consideration for the Transferred Development Rights, Developer agrees to pay City Two Million Five Hundred Thousand Dollars ($2,500,000), due and payable within ten (10) business days from the Effective Date of this Agreement. Such payment shall be available for City’s use for any purpose at its sole and absolute discretion subject to approval by its City Council. c. Excluded Development Area. Notwithstanding the foregoing, the allocation of development area herein shall exclude Forty Thousand (40,000) square feet of development area previously allocated to the San Mateo County Harbor District pursuant to the Agreement Between and Among the City of South San Francisco, the Redevelopment Agency of the City of South San Francisco, and the San Mateo County Harbor District dated March ___, 2011, and located on land jointly owned by the City and the South San Francisco Park and Recreation District. Section 2. Applicability of Other Development Standards. Except for Transferred Development Agreement rights conveyed herein and the addition of 150,000 square feet of development capacity allowed within Developer Phases ID through IVD and the related impact to Floor Area Ratio (FAR) standards specifically contemplated and provided for in this Agreement, the zoning, allowable land use, maximum building coverage, and other development standards set forth under South San Francisco Municipal Code Chapter 20.230, as applicable to the Oyster Point Specific Plan District, Planning Area 1, shall continue to apply to the Project. Section 3. Precise Plan Approval. Developer shall submit to City for approval a new Precise Plan or an amendment to the Phase ID Precise Plan or the Phase IID - IVD Precise Plan as approved by the City, as applicable, for the utilization of the Transferred Development Rights to develop additional atriums, service areas and campus amenities for each proposed development with Phases ID through IVD. The Precise Plan shall include all required application contents as set forth in the applicable provisions of the South San Francisco Zoning Code, including all required site plans for the atriums, service areas, or campus amenities proposed. Section 4. Environmental Review. In developing the Transferred Development Rights square footage, Developer shall continue to comply with the MMRP approved in conjunction with the EIR for the Project, as it may be modified from time to time in accordance with the MMRP or other law. However, to the extent that the development of the Transferred Development Rights square footage is subject to additional environmental review pursuant to CEQA, including but not limited to availability of new information or circumstances not previously analyzed as required by applicable statutes and guidelines, Developer shall be required to reimburse the City for all reasonable costs necessary to prepare any additional environmental analysis pursuant to CEQA as part of the Precise Plan or Precise Plan amendment to be considered by the City pursuant to Section 3 above. Section 5. Development Fees. For the development of the Transferred Development Rights square footages on Developer Property within Planning Area 1 for Phase ID - IVD, Developer shall pay development impact fees as set forth under the Development Agreements. For the development of the Transferred Development Rights square footages on properties owned by Developer at 345-349 Oyster Point Blvd., South San Francisco, Developer shall pay all those development impact fees that are: (i) actually adopted by the City by resolution or ordinance as of the Effective Date of this Agreement; and (ii) under consideration by the City as of the Effective Date of this Agreement, including but not limited to the proposed citywide Library Impact Fee and citywide Transportation Impact Fee. Developer shall pay all such development impact fees at a rate 4 based on the respective applicable formula for each fee in effect at the time of the issuance of any building permit by City for the development of the Transferred Development Rights square footage. All development impact fees to be paid by Developer shall be due upon issuance of issuance of such building permit. Section 6. City Fees. For the additional development of 150,000 square feet of Development Rights pursuant to this Agreement, Developer shall pay those processing, inspection and plan checking fees and charges required by the City for processing applications and requests for approvals under the applicable regulations in effect at the time such applications and requests are submitted to the City, and pursuant to the Master Fee Schedule as most recently adopted by the South San Francisco City Council at that time. Section 7. Indemnification and Hold Harmless. Developer shall indemnify, defend (with counsel acceptable to the City) and hold harmless City, its elected and appointed officials, officers, agents, employees, consultants, and representatives (collectively herein, “City”) from any and all loss, liability, fines, penalties, forfeitures, costs and damages (whether in contract, tort or strict liability, including but not limited to personal injury, death at any time and property damage) and from any and all claims, demands and actions in law or equity (including attorneys’ fees and litigation expenses) by any person or entity, directly or indirectly arising or alleged to have arisen out of or in any way related to: (i) the City’s approval and implementation of this Agreement (including but not limited to any proceeding brought in any state or federal court challenging the City’s actions with respect to the approval or execution of this Agreement); and (ii) the construction performed under this Agreement, except as solely arising out of the gross negligence or willful misconduct of City, its contractors, subcontractors, agents or employees. The indemnity under this Section shall survive expiration, termination or cancellation of this Agreement and shall be independent of other indemnity agreements. Section 8. Governing Law. This Agreement shall be construed and enforced 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. Section 9. Attorneys’ Fees. In any legal action or other proceeding brought by either party to enforce or interpret a provision of this Agreement, the prevailing party is entitled to reasonable attorneys’ fees and any other costs incurred in that proceeding in addition to any other relief to which it is entitled. Section 10. No Agency, Joint Venture or Partnership. It is specifically understood and agreed to by and between the parties hereto that this Agreement does not create any form of agency relationship, joint venture or partnership between City and Developer and agree that nothing contained herein or in any document executed in connection herewith shall be construed as creating any such relationship between City and Developer. Neither Developer nor any of Developer’s agents or contractors are or shall be considered to be agents of the City in connection with the performance of Developer’s obligations under this Agreement. Section 11. Amendments. This Agreement may be amended in whole or in part, by mutual written consent of the Parties hereto or their successors in interest. Section 12. Severability. If any term or provision of this Agreement, or the application of any term or provision of this Agreement to a particular situation, is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining terms and provisions of this 5 Agreement, or the application of this Agreement to other situations, shall continue in full force and effect unless amended or modified by mutual consent of the parties. Section 13. Construction; Incorporation of Recitals; No Presumption. The Recitals contained in this Agreement are hereby incorporated into this Agreement as if fully set forth herein. Section headings in this Agreement are for convenience only and are not intended to be used in interpreting or construing the terms, covenants, or conditions of this Agreement. This Agreement has been reviewed and revised by legal counsel for both City and Developer, and no presumption or rule that ambiguities shall be construed against the drafting party shall apply to the interpretation or enforcement of this Agreement. Section 14. Covenants Running with the Land. All of the provisions contained in this Agreement shall be binding upon the parties and their respective heirs, successors and assigns, representatives, lessees, and all other persons acquiring all or a portion of the Developer Property, or any interest therein, whether by operation of law or in any manner whatsoever. All of the provisions contained in this Agreement shall be enforceable as equitable servitudes and shall constitute covenants running with the land pursuant to California law including, without limitation, Civil Code Section 1468. Each covenant herein to act or refrain from acting is for the benefit of or a burden upon the Project, as appropriate, runs with the Developer Property and is binding upon the owner of all or a portion of the Developer Property and each successive owner during its ownership of such property. Section 15. Notices. Any notice or communication required hereunder between City or Developer must be in writing, and may be given either personally, by registered or certified mail (return receipt requested), or by Federal or other similar courier promising overnight delivery, by email or by facsimile. a. If personally delivered, a notice shall be deemed to have been given when delivered to the party to whom it is addressed. b. If given by email or facsimile transmission, a notice or communication shall be deemed to have been given and received upon actual receipt of the entire document by the receiving party’s facsimile machine or email server; provided, however, that notice given by email or facsimile shall not be effective unless either (i) a duplicate copy of such email or fax notice is promptly given by one of the other methods described in this Section 15 or (ii) the receiving party delivers a written confirmation of receipt for such notice either by email or fax or any other method described in this Section 15. c. Notices transmitted by email or facsimile after 5:00 p.m. on a normal business day or on a Saturday, Sunday or holiday shall be deemed to have been given and received on the next normal business day. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of (i) actual receipt by any of the addressees designated below as the party to whom notices are to be sent, or (ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. d. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. Any party hereto may at any time, by giving ten (10) days written notice to the other party hereto, designate any other address in substitution of the address to which 6 such notice or communication shall be given. Such notices or communications shall be given to the parties at their addresses set forth below: If to City, to: City Manager City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Phone: (650) 829-6629 Fax: (650) 829-6623 Email: [email protected] With a copy to: Meyers Nave 1999 Harrison Street, 9th Floor Oakland, CA 94612 Attn: Sky Woodruff, City Attorney Phone: (510) 808-2000 Fax: (510) 444-1108 Email: [email protected] If to Developer, to: KR Oyster Pt I, LLC 100 First Street, Suite 250 Attn: Matt Griffin San Francisco, CA 94105 Email: [email protected] With a copy to: Kilroy Realty Corporation 12200 W. Olympic Boulevard, Suite 200 Attn: Legal Department Los Angeles, CA 90064 Phone: (310) 481-8400 Fax: (310) 481-6539 Section 16. Entire Agreement, Counterparts and Exhibits. This Agreement may be executed counterparts, each of which is deemed to be an original. This Agreement constitutes the final and exclusive understanding and agreement of the parties and supersedes all negotiations or previous agreements of the parties with respect to all or any part of the subject matter hereof. Section 17. Recordation of Agreement. City Clerk shall record or cause to be recorded an executed copy of this Agreement in the Official Records of the County of San Mateo. IN WITNESS WHEREOF, this Agreement has been entered into by and between Developer and City as of the day and year first above written. [SIGNATURES ON NEXT PAGE] 7 CITY OF SOUTH SAN FRANCISCO A municipal corporation By: Name: Its: [Notary Acknowledgment Required] DEVELOPER KR OYSTER POINT I, LLC, a Delaware limited liability company By: Kilroy Realty, L.P., a Delaware limited partnership, its Sole Member By: Kilroy Realty Corporation, a Maryland Corporation, its General Partner By: Name: Title: By: Name: Title: [Notary Acknowledgment Required] Confidential Real Property Negotiations- Working Draft Only Exhibit ___ [exhibits to be inserted in accordance with final agreement] 3620578.1