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HomeMy WebLinkAboutReso 175-2020 (20-833)City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA City Council Resolution: RES 175-2020 File Number: 20-833 Enactment Number: RES 175-2020 RESOLUTION APPROVING A FIRST AMENDMENT TO THE EXCLUSIVE NEGOTIATING RIGHT AGREEMENT WITH FIREHOUSE WORK LLC AND ANTON DEVCO INC., FOR THE OLD FIREHOUSE PROPERTY, LOCATED AT 201 BADEN AVENUE WHEREAS, The City owns certain real property located at 201 Baden (the "Property"), where an old firehouse is located, and the size of the lot 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, the City Council previously selected Firehouse Live, LLC ("FHL") and Firehouse Work, LLC ("FHW") (formerly Fire House Live/Work), were selected by Council as the developers for the Property; and WHEREAS, on March 4, 2019, pursuant to City Council approval, the City entered into an Exclusive Negotiating Rights Agreement ("Original ENRA") with FHL and FHW, which authorized the parties to commence negotiating the terms of purchase agreements relating to the rehabilitation of the Old Firehouse and developing a mixed-use residential and commercial project ("Project") on the Property; and WHEREAS, on October 3, 2019, the City, FHW, and Habitat for Humanity Greater San Francisco, Inc. ("HGSF") entered into a subsequent ENRA ("Second ENRA" and "Agreement"), to replace FHL with HGSF as the developer for the residential component of the Project, and to set the term of the Agreement for one hundred and eighty (180) days with two administrative extensions of ninety (90) days each; and WHEREAS, the Agreement was administratively extended on March 26, 2020 to June 29, 2020 with respect to both FHW and HGSF, and again on June 23, 2020 to December 26, 2020 with respect to FHW only; 'and WHEREAS, as the term of the Agreement with respect to HGSF expired on June 29, 2020, the City and FHW now desire to execute a First Amendment to the Agreement to replace HGSF with Anton DevCo as the developer for the residential component of the Project; and WHEREAS, the First Amendment to the Agreement will also provide for a 180 -day negotiation period and three (3) ninety (90) day extensions; and WHEREAS, as described in the Agreement, the Project will consist of FHW rehabilitating the existing Old City of South San Francisco Page 1 File Number. 20-833 Enactment Number., RES 175-2020 Firehouse structure into a 9,200 square foot commercial space to preserve its historical significance, and Anton DevCo constructing approximately eighty-two (82) residential condominium units that will all be deed restricted as Below Market Rate on the Property, which is to be bifurcated into two separate parcels that will be sold to each Developer in separate transactions and each Developer would be responsible for entitling and developing their respective portions of the Project; and WHEREAS, City and FHW have pursued such negotiations diligently and in good faith, have formulated proposed terms and conditions of the Project, but have determined that additional time is necessary to discuss Project details including to engage in discussions with Anton DevCo for the residential development component of the Project; WHEREAS, it is the intent of both developers to continue assuming the obligations in the Agreement and to continue working cooperatively and in good faith to meet the performance milestones set forth in the Agreement and negotiate the terms of purchase and sale agreements, which are material considerations to the City in executing this First Amendment; and WHEREAS, by approval of the First Amendment to the Agreement, City has no legal obligation to grant any approvals or authorizations for a purchase and sale agreement or development thereon until such agreement has been separately approved by the City Council. 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 First Amendment to the Exclusive Negotiating Rights Agreement, attached hereto and incorporated herein as Exhibit A, is hereby approved. 3. The City Manager is hereby authorized to execute the First Amendment on behalf of the City Council; to make revisions to the First Amendment, 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: First Amendment to the Exclusive Negotiating Rights Agreement with Firehouse Work and Anton DevCo Inc. City of South San Francisco Page 2 File Number: 20-833 Enactment Number: RES 175-2020 At a meeting of the City Council on 12/1/2020, a motion was made by Councilmember Matsumoto, seconded by Councilmember Nicolas, that this Resolution be approved. The motion passed. Yes: 5 Mayor Garbarino, Vice Mayor Addiego, Councilmember Nagales, Councilmember Nicolas, and Councilmember Matsumoto Attest by 40,00 & �sa Govea Acosta, City Clerk City of South San Francisco Page 3 FIRST AMENDMENT TO EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT This First Amendment to the Exclusive Negotiating Rights Agreement dated October 3, 2019 (“First Amendment”) is entered into by and between the City of South San Francisco, a California municipal corporation (the “City”), Firehouse Work, LLC, a California Limited Liability Company (“FHW”), and Anton DevCo Inc., a California Corporation, (“Anton DevCo ”; each a “Developer” and both collectively described as “Developers”) dated as of ____________, 2020 (the “Effective Date”). City and Developers are each referred to as “Party” or collectively referred to as “Parties”. RECITALS A. The City is the owner of certain real property located at 201 Baden Avenue, South San Francisco, 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, collectively and commonly known as the Old Firehouse (“Property”). B. On March 4, 2019, pursuant to a solicitation process, the City entered into an Exclusive Negotiating Rights Agreement (“First ENRA”) with FHW and Firehouse Live, LLC (“FHL”), which authorized the parties to commence negotiating the terms of purchase agreements relating to the rehabilitation of the Old Firehouse and developing a mixed-use residential and commercial project (“Project”) on the Property. C. After the First ENRA expired on August 31, 2019, the City, FHW, and Habitat for Humanity Greater San Francisco, Inc. (“HGSF”) entered into a subsequent ENRA on October 3, 2019 (“Second ENRA” and “Agreement”), attached hereto and incorporated as Exhibit A, to replace FHL with HGSF as the developer for the residential component of the Project, and to set the term of the Agreement for one hundred and eighty (180) days with two administrative extensions of ninety (90) days each. D. The Agreement was administratively extended on March 26, 2020 to June 29, 2020 with respect to both FHW and HGSF, and again on June 23, 2020 to December 26, 2020 with respect to FHW only. E. As the term of the Agreement with respect to HGSF expired on June 29, 2020, the Parties now desire to replace HGSF with Anton DevCo as the developer for the residential component of the Project subject to the terms and conditions of the Agreement, and further extending the term of that agreement. F. As described in the Agreement, the Project will consist of FHW rehabilitating the existing Old Firehouse structure into a 9,200 square foot commercial space to preserve its historical significance, and Anton DevCo constructing approximately eighty-two (82) residential units that will have some deed restricted Below Market Rate units, in compliance with the City’s Inclusionary Housing Ordinance, and potential commercial uses on the Property, which is to be bifurcated into two separate parcels that will be sold to each Developer in separate transactions and each Developer would be responsible for entitling and developing their respective portions of the Project. G. City and FHW have pursued such negotiations diligently and in good faith, have formulated proposed terms and conditions of the Project, but have determined that additional time is necessary to discuss Project details including to engage in discussions with Anton DevCo for the residential development component of the Project, and it is the intent of the Developers to continue working cooperatively and in good faith to meet the performance milestones set forth in the Agreement and negotiate the terms of purchase and sale agreements, which are material considerations to the City in executing this First Amendment. H. At its meeting on ______________, the City Council approved this First Amendment and directed staff to continue negotiating the terms of two separate 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. Parties to the Agreement. The Agreement is amended to include Anton DevCo as a Party and replacing HGSF as the developer for the residential component of the Project , for the Parties to continue negotiating the terms of purchase agreements relating to the Project as described herein and in the Agreement. 2. Extension of Term. The Term of the Agreement pursuant to Section 3 of the Agreement is hereby extended for an additional one hundred eighty (180) days from the Effective Date. The extended Term may be administratively extended for up to a maximum of three (3) separate ninety (90) day periods for each Developer or both Developers upon the request of either Developer. 3. No Modification or Waiver. Except as otherwise expressly set forth herein, all other terms, provisions, and conditions of the Agreement remain unmodified and shall continue in full force and effect. 4. Construction; General Provisions. Each Party hereto has received independent legal advice from its attorneys with respect to the advisability of executing this First Amendment and the meaning of the provisions hereof. The provisions of this First 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. Each Party hereby ratify and affirm all their respective rights and obligations under the Agreement. Any capitalized terms not defined herein shall have the meaning ascribed to them in the Agreement. In the event of any conflict between this First Amendment and the Agreement, this First Amendment shall govern. The terms and provisions of this First Amendment, together with the Agreement, shall constitute all of the terms and provisions to which the Parties have agreed with respect to the transaction governed hereby, and there are no other terms and provisions, oral or written, that apply to the Agreement and/or the Property other than as set forth in the Agreement as modified by this First Amendment. The provisions of this First Amendment shall apply to, be binding upon, and inure to the benefit of the parties hereto and to their respective successors and assigns. This First Amendment may be executed in multiple counterparts, all of which shall constitute an original, and all of which together shall constitute a single instrument. Counterparts of this First Amendment executed and delivered by facsimile, email or other means of electronic delivery shall constitute originals for all purposes. [Signatures on Next Page] IN WITNESS WHEREOF, City and Developer have executed this Extension as of the date first written above. 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 Anton DevCo By: _______________________________ Name: Trisha Malone Title: Chief Financial Officer EXHIBIT A [Second ENRA] 3620077.2