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HomeMy WebLinkAbout2014-08-13 e-packetSPECIAL MEETING H SUCCESSOR AGENCY o OF THE c�LoR�I� CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 Meeting to be held at: MUNICIPAL SERVICES BUILDING COUNCIL CHAMBERS 33 ARROYO DRIVE SOUTH SAN FRANCISCO, CA WEDNESDAY, AUGUST 13, 2014 6:00 P.M. NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of California, that the Successor Agency to the City of South San Francisco Redevelopment Agency will hold a Special Meeting on Wednesday, the 13ffi day of August, 2014, at 6:00 p.m., in the Municipal Services Building, Council Chambers, 33 Arroyo Drive, South San Francisco, California. Purpose of the meeting: 1. Call to Order. 2. Roll Call. 3. Agenda Review. 4. Public Comments — comments are limited to items on the Special Meeting Agenda. CONSENT CALENDAR 5. Motion to approve the Successor Agency Minutes for the meetings of July 23, 2014. 6. Motion confirming payment registers for Redevelopment Obligation Retirement Fund Payments for August 13, 2014. 7. Motion to cancel the regular Successor Agency Meeting of August 27, 2014. (Mike Futrell, City Manager) 8. Resolution approving the terms of a Revenue Sharing Agreement and directing staff to negotiate and prepare a Revenue Sharing Agreement for presentation to the Oversight Board and the Califomia Department of Finance. (Armando Sanchez, Housing Consultant) 9. Recommend Oversight Board adopt resolutions approving amendments to the lease agreements with Sitike Counseling Center and the County of San Mateo for the facility at 306 Spruce Avenue. (Armando Sanchez, Housing Consultant) ADMINISTRATIVE BUSINESS 10. Recommendation of the Successor Agency to the Oversight Board to approve an Exclusive Negotiating Rights Agreement (ENRA) with Miller Cypress SSF, LLC (Sares- Regis). (Armando Sanchez, Housing Consultant) CLOSED SESSION 11. Closed Session: Conference with Real Property Negotiators: (Pursuant to Government Code Section 54956.8) Properties: 401 & 315 Airport Blvd, 405 Cypress Ave, and 216 Miller Ave Agency Negotiators: Patrick O'Keeffe Negotiating Parties: Miller Cypress SSF, LLC (Sares- Regis) and South San Francisco Successor Agency Under Negotiations: Price and terms for disposition of the property ADJOURNMENT Anna M. Brown, Deputy City Clerk SPECIAL SUCCESSOR AGENCY MEETING AUGUST 13, 2011 AGENDA PAGE 2 MINUTE NTH SANF �' SUCCESSOR AGENCY n CITY OF SOUTH SAN FRANCISCO O'�l1FOR�A REGULAR MEETING MUNICIPAL SERVICES BUILDING COUNCIL CHAMBERS 33 ARROYO DRIVE SOUTH SAN FRANCISCO, CA WEDNESDAY, JULY 23, 2014 6:30 P.M. CALL TO ORDER TIME: 6:31 p.m. ROLL CALL PRESENT: Boardmembers Addiego, Gupta and Normandy, Vice Chair Garbarino and Chair Matsumoto. ABSENT: None. AGENDA REVIEW No changes. PUBLIC COMMENTS None. CONSENT CALENDAR 1. Motion to approve the minutes from the meeting of April 23, 2014 and July 9, 2014. 2. Motion confirming payment registers for Redevelopment Obligation Retirement Fund Payments for July 9, 2014 and July 23, 2014. Chair Matsumoto requested help be provided to the Deputy City Cleric to ensure a timelier submission of minutes. Chair Matsumoto also asked how the dates on the expense reports reconciled with the dates on the agenda. Finance Director Steele responded that there hadn't been a recent meeting at which to submit the reports for confirmation. Deputy City Clerk Brown explained the dates on the agenda represented the dates the reports were being submitted for confirmation. A report had already been generated for submission at the July 9 meeting but it had been pulled. The decision was made to submit the reports separately rather than generating a new, combined report. Chair Matsumoto requested greater clarity in the future. Motion — Boardmember Addiego /Second — Boardmember Gupta: to approve the Consent Calendar. Unanimously approved by voice vote. CLOSED SESSION 3. Conference with Real Property Negotiators: (Pursuant to Government Code Section 54956.8) Properties: 401 & 315 Airport Blvd, 405 Cypress Ave, and 216 Miller Ave Agency Negotiators: Patrick O'Keeffe Negotiating Parties: Sares -Regis and South San Francisco Successor Agency Under Negotiations: Price and terms for disposition of the property Enter Closed Session: 6:37 p.m. Return to Open Session: 7:05 Report out of Closed Session: Direction given. No reportable action taken. ADJOURNMENT Being no further business, Chair Matsumoto adjourned the meeting at 7:05 p.m. Submitted by: Anna M. Brown, Deputy City Clerk City of South San Francisco REGULAR SUCCESSOR AGENCY MEETING MINUTES Approved by: Karyl Matsumoto, Chairperson City of South San Francisco JULY 23, 2014 PAGE Listing of Redevelopment Obligation Retirement Fund Payments for Successor Agency Review I certify that the payments shown on this payment register are accurate and sufficient funds were available for payment.* DATED 8/7/2014 FINANC ; IRECTOR *Note: Items below do not Include payroll related payments Checks: Date 07/21/14 Electronic Payments: Date Total Payments $ Amount 17, 893.50 Amount To 17,893.50 Description V i N N m m m mU') Lr) LO LSD LC) LO to to Lo LO Lo Liz Lf) m H H M M m M M V r M L() N N N N N N Cl) It It V V It Kt Kt IT �t �t It �t LL LL !+ ti 1~ t• ti ti CO 00 „--, r- I+ t- f- rl_ f- 1~ rl- � I- r- � I- 1` 1~ t• � !+ � I+ W W r- I- f- ti ti I• N t-- D +J Cl) M Cl) CO M Cl) Cl) M M Cl) Cl) co co M co M Cl) M M M M Cl) M M co Cl) Cl) M r• W M M Cl) Cl) M Cl) co M M M Cl) CO Cl) M Cl) M m M Cl) Cr) M Cl) co M M Cl) Cl) M = N N N N N N N N N N N N N N N N N N N N N N N N N N N N V m d O CD m m (i r 00 m m m m ED C) m o m m m OD 6-] m Cl) r w If) V c� 000 IT 0 N� O N 0 CN N b 0 U M m I� L2 00 M 00 r b M f-- n O Q Lf) M O O It b O m b b r r r N LO r b N N m N M M CO CD CO 00 CO _ � Lt0 7 t9 -t 00 IT O' LO t N m m co 7 M 't m I` ��� M N co b b i CO CO d' � ' �' r r r r r r r r r r r [f} r CO co CO LO Cj' O N 00 Z m 0) ui LO U) L10 � N N N N N N N N N N N N� O C7 OODD co N OD 00 co O U O LIJ w-i a a a Q¢ a a¢ a Q¢ a 0- wxaof aG�axc,� cl� Q�xa F3 N o o o� o o o o o o o o o o o o o w w C) > >>>�> >�> > >> UU L) ZZUUOOGY U W W W W W W-i W � �XU Q O M ❑ O W -i CwI} -i -i -i _W_t Elf ❑ Z Cl) CO LU Q x( W C V W W❑ >- Z O cD O O M 0 0 O 0 O 0 b 0 b 0 CO Cl CD 0 b 0 O 0 O 0 O 0 Q C7 C7 12 O co o 2 Z Q ci M co M M co M co m M co co co E Z_ z_ �� Z 0 0 N _ Z W ¢ Z CC tr O Q' w' w' F � -i ❑ w [ L --1 _ O O O O O O O O O O O O O w J J w w Q) 00 co cco o O O H O W !� LL w LL IL Lt_ w LL LL LL LL ° O U rn [Y 6 m m 0 0 w W w W w w w w w w w w w❑ C❑iJ z C=f1 z Q o Z o �o) om z UUc ncnw�pZZZZZZZZZZZZzQ0������w`' LLJ co 0 >> w U Z Z Z Z Z Z Z Z Z Z Z Z N N Z Z Z¢ W W a ww�O0nEK �0'CN Lli FFFFFFFFFFFF� = =��wwaQ�U t� p O R (n U? �11-1 W E Z Z Z Z Z Z Z Z Z Z Z Z U U 0 m 0 > LL r V O 0 ~ ; Q Q Q ¢ `¢ ¢ Q ¢ ¢ ¢ ¢ `¢ ¢ ¢ ~ U U U z < Q w Z Z w W w .� Q w Cr) CfJ H H F- Q U LU ° ¢ a��� O� m z CD ~ 0 o o o o o o o o o o o o o o o°°° p a w U U M M M w F- f- f- F- F- f- F- F- i- I- f- I- 0- z z a �_ Er a Z ° 0 ° CN o a� O ©❑ to {n > > j j j j>> >> w< Q Q Q Q Q J w o w (!j o > Z Z CO CO cD c0 W W W W W W W W W W W W b LL) En Lf) >n cq Z U Z w Z a J 0 J 0 0 co 0 co o O J J U W w J w J w J w J W J W J W J W J W J W J W O co x a CC Q M M M M m- co co i) V o Z b b CO M O o 0 0 0 0 0 0 0 0 0 0 0 o t9 o LS 1 N m N m I- m b m m {D M C4 o O O co M m m m Cl) co M m M m m O f-- 0 m LO O [O N b LO O O O LO r N LO m m 6 LO LO n LO LO LO LO m LO m LO m LO m LO LL') O M N V' CO O LO m 0 OO C M M N CO m 0 N M� r r r ti m M M CD r r r r r r r r r r r r r— M V co Y) Q �i' N N r M J ? W C V CL 0 Z I13 - d z IL w IL Li H OU Z U) Q W FL Z� O U U w j Q ¢ ❑ z Cl) C� N � o } z o W Z J 2 m U W o Q v v' �U Law o zC� Z ❑ Q J O OU X o Q Z z Q Z ❑ LU O w o J O U cj U z❑ U U Q Y Z 0 = ° w U)w LU z a) N J cUnmF w W m w0 Ow O cnco o > ° m U ❑ Y Q co co ❑ a1 r L4� 4O7 LI� 0$ C4 C4 00 00 00 f-S 6% N U. lld U. Q o o� Z �W LLI y � Z � O o � � a � � w w m 1� ro 4 Successor Agency to the Redevelopment Agency Staff Report DATE: August 13, 2014 TO: Chair, Vice Chair and Board Members FROM: Mike Futrell, Executive Director SUBJECT: CANCELLATION OF THE REGULAR SUCCESSOR AGENCY MEETING OF AUGUST 27, 2014 RECOMMENDATION It is recommended that the City Council, by motion, cancel the regular Successor Agency meeting of August 27, 2014. CONCLUSION Cancellation of the August 27, 2014 Successor Agency meeting will not have an adverse effect on City business. By: Mike Futrell Executive Di ector DATE: August 13, 2014 TO: Chair, Vice Chair and Boardmembers FROM: Patrick O'Keeffe, Economic and Community Development Consultant SUBJECT: RESOLUTION APPROVING THE TERMS OF A REVENUE SHARING AGREEMENT AND DIRECTING STAFF TO NEGOTIATE AND PREPARE A REVENUE SHARING AGREEMENT FOR PRESENTATION TO THE OVERSIGHT BOARD AND THE CALIFORNIA DEPARTMENT OF FINANCE. RECOMMENDATION Accept Staff Report conveying information to the City Council and Oversight Board regarding adopting resolutions approving the terms of a Revenue Sharing Agreement for the Commercial Space at 636 El Camino Real. BACKGROUND The property at 636 El Camino Real contains a mixed -use affordable housing development constructed by Mid - Peninsula Housing Coalition (Mid -Pen) and sponsored by the Redevelopment Agency of the City of South San Francisco (RDA). Pursuant to the dissolution statutes, the California Department of Finance (DOF) authorized the transfer of the land and Mid -Pen's $9.9 million loan to the City as housing successor. Mid -Pen as developer owns the building improvements. However, because the housing project contains approximately 5,160 square feet of retail space, it is subject to Health and Safety Code section 34176 (f ): "If a development includes both low- and moderate- income housing that meets the definition of a housing asset under subdivision (e) and other types of property use, including, but not limited to, commercial use, governmental use, open space, and parks, the oversight board shall consider the overall value to the community as well as the benefit to taxing entities of keeping the entire development intact or dividing the title and control over the property between the housing successor and the successor agency or other public or private agencies. The disposition of those assets may be accomplished by a revenue- sharing arrangement as approved by the oversight board on behalf of the affected taxing entities." Pursuant to a Master Lease Agreement, the RDA leased back from Mid -Pen the retail space for a term of 75 years. The Oversight Board and DOF authorized the assignment of the lease to the City. The City has entered into sub - leases agreements for two of the three commercial spaces and is in the process of completing the tenant improvements for these spaces. With occupancy expected to occur in August, 2014, it is necessary for the City and the Oversight Board to settle matters with respect to Health and Safety Code Section 34176 (f) requiring a shared revenue agreement. Previously, in April 2013, City staff asked the Oversight Board to relinquish its interest in the commercial space but the Board declined to do so. As a result, the Oversight Board is schedule to discuss and consider the proposed terms of a shard revenue agreement on August 19, 2014. Staff Report Subject: Revenue Sharing Agreement Terms for Commercial Space at 636 El Camino Real Page 2 of 2 DISCUSSION The City and Oversight Board need to determine how to proportionately distribute the commercial rent revenue between the housing fund and the taxing agencies (the "Parties "). With the City Council's concurrence, staff is proposing to present to the Oversight Board the following terms for a shared revenue agreement: 1. The amount of revenue shared by the Parties shall be revenues net of operating expenses and reserves. Annual rent at stabilization in year 3 will be $111,703 with 3% annual increases. At stabilization, operating expenses are estimated at $34,954 per year and reserves at $18,981 for a total of $53,935. This means $57,768 will be available annually for sharing between the City's affordable housing fund and the taxing agencies (see attached 636 ECR Retail Pro - forma). 2. To calculate how the net revenue is divided, the agreement shall dictate that the share each Party receives shall be based on the percentage of commercial square footage versus total project square footage. The property contains 5,160 square feet of commercial space and a total project built area of 229,776 square feet (see Exhibit A). The commercial space represents 2.25% of the total built area, therefore the taxing agencies will receive 2.25% of net revenue. Based on the figures above, at stabilization the taxing agencies will receive approximately $1,300 per year (2.25% x $57,768) and increase 3% annually. Upon approval of the terms by the City, Oversight Board and DOF the City Attorney will draft one agreement to be signed by each of the taxing entities that sets forth the overall formula and the percentage going to each taxing entity. The proceeds from the rent will be distributed to all of the taxing entities on a pro rata basis in proportion to each taxing entity's share of the base property tax revenues, as determined by the County Auditor - Controller. CONCLUSION Accept Staff Report conveying information to the City Council and Oversight Board regarding adopting resolutions approving the terms of a Revenue Sharing Agreement for the Commercial Space at 636 El Camino Real. By: Patrick O'Keeffe Economic and Community Development Consultant Exhibits: City Council Resolution 636 ECR Retail Pro -Forma 636 El Camino Project Data By: � ff . Mike Futrell Executive Director FOR INFORMATION ONLY RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING THE TERMS OF A REVENUE SHARING AGREEMENT AND DIRECTING STAFF TO NEGOTIATE AND PREPARE A REVENUE SHARING AGREEMENT FOR PRESENTATION TO THE OVERSIGHT BOARD NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO ( "AGENCY ") THAT THE CITY COUNCIL DOES HEREBY RESOLVE, ORDER AND DETERMINE AS FOLLOWS: WHEREAS, the property at 636 El Camino Real (the "Property ") contains a mixed -use affordable housing development constructed by Mid - Peninsula Housing Coalition and sponsored by the former Redevelopment Agency of the City of South San Francisco (the "RDA "); and WHEREAS, the Property was transferred to the City of South San Francisco (the "City ") as Housing Successor to the former RDA, pursuant to Health and Safety Code Section 34176; and WHEREAS, the Property contains approximately 5,160 square feet of retail space: and WHEREAS, pursuant to a Master Lease Agreement for the Property, the RDA leased the retail space back from Mid -Pen pursuant to a 75 -year lease; and WHEREAS, pursuant to Health and Safety Code Section 34176(1), the Oversight Board for the Successor Agency to the RDA (the "Oversight Board "), and the State Department of Finance ( "DOF "), authorized the assignment of the lease to the City, on the condition that the disposition of lease revenue be accomplished by a revenue sharing agreement with the affected taxing entities, as approved by the Oversight Board; and WHEREAS, pursuant to two subleases for three of the commercial spaces, with occupancy expected to occur this month, a revenue sharing agreement must be prepared and presented to the Oversight Board; and WHEREAS, based upon projections, at rent stabilization in year 3, of net revenue for the commercial square footage at the Property, City staff calculates that $1,300 will be available annually for distribution to the taxing entities, and will increase by 3% annually thereafter; and WHEREAS, the net rental revenue for the commercial space square footage will be distributed to the taxing entities on a pro rata basis in proportion to each taxing entity's share of the base property tax revenues, as determined by the San Mateo County Auditor - Controller. NOW, THEREFORE, the City Council of the City of South San Francisco hereby: (1) -1- approves the terms of a revenue sharing agreement with the affected taxing entities as set forth herein and in the accompanying staff report; (2) authorizes City staff to negotiate and prepare a revenue sharing agreement with the affected taxing entities for the net rental revenue from the commercial space square footage at 636 El Camino Real; and (3) authorizes City staff to present the terms thereof and the subsequent revenue sharing agreement to the Oversight Board and DOF for approval. I hereby certify that the foregoing is a full, true, and correct copy of a resolution duly and regularly adopted by the City Council of the City of South San Francisco at a Regular Meeting held on the 13th day of August, 2014 by the following vote: AYES: NOES: ABSTAIN: ABSENT: 2312981.1 ATTEST: -2- City Clerk �a�rs N ¢ 1 ¢ m h � VLLJ h VJIN r m m m m u] ¢ W wE3�4 hmE d oo d000r �s¢d Z ¢¢p a a ♦ 9dd d�° o v iii m O f- V W 7 O CL zz a W W M �O ■ r I 0 0 z r *z 1^�1� V 1� F Li f e N R R R R R R3ly Ff fy 17 W 17 ff et IK o, ., N w w g � 4 9 F Qt 6 6 � � s m � ° p ° � � S�FL7 S � �� � 3s 2 � m m A'�Wj * ���IP q9 ■�. ° k'• S° Cv S S � a ¢ � � a' p ug � � 'V,' ® � � Si � y � u SX do °fir® zc�� �g�52� 11N�� ? � �� M S �4 pyr 1 SC�zg3�i z c3.iS Sffgg�n5c°d¢YJi� S s p vR — o o "' is i L5 d S N g 9 m^ A R%P g o f 5? St i J W Qs U j Z m ae ae 2e p m p L E O E y 4{L,� O h�- �yY Fj z i Q i� F r y 2 iR iR C �a�rs N ¢ 1 ¢ m h � VLLJ h VJIN r m m m m u] ¢ W wE3�4 hmE d oo d000r �s¢d Z ¢¢p a a ♦ 9dd d�° o v iii m O f- V W 7 O CL zz a W W M �O ■ r I 0 0 z r *z 1^�1� V 1� F Li f e N R R R R R R3ly Ff fy 17 W 17 ff et IK o, ., N w w g � ffi g N Npl at 5Ro m MO � m m � m 11N�� p 5 m d Z O _Y W Qs U m 4 O F ? Tq O E p y aaZ l4�/JJ 4{L,� h�- jJ f.■ C ■d ¢� d¢ ��' aZ =x m ha��' d �� aa��ia m ^ O y �jrzyy JJ Z O ¢p O OAR C O O O O•s 2 m Q Q 7� O�� C9 m O W Y W Q U� q$ ? � LL G7 U y� �a�rs N ¢ 1 ¢ m h � VLLJ h VJIN r m m m m u] ¢ W wE3�4 hmE d oo d000r �s¢d Z ¢¢p a a ♦ 9dd d�° o v iii m O f- V W 7 O CL zz a W W M �O ■ r I 0 0 z r *z 1^�1� V 1� F Li f e N R R R R R R3ly Ff fy 17 W 17 ff et IK o, ., N w w g p 5 m d Z O Qs m 4 O F ? Tq O E p y S h�- �a�rs N ¢ 1 ¢ m h � VLLJ h VJIN r m m m m u] ¢ W wE3�4 hmE d oo d000r �s¢d Z ¢¢p a a ♦ 9dd d�° o v iii m O f- V W 7 O CL zz a W W M �O ■ r I 0 0 z r *z 1^�1� V 1� F Li f e N R R R R R R3ly Ff fy 17 W 17 ff et IK o, ., 133815 V 7 1t if Li jl_— fu Z__ o A II SO CL G7 CD 13 b--4 (S O p� 636 ECR Retail Pro-forma Soft Costs Management Fee Security Deposits Held Gross Income $ 9,000 $ 60,019 $61,830 $111,703 Expenses Service Contracts Property Management (3rd party) Grounds /Parking (3rd party) Repairs /Maintenance Janitorial /Common Areas (3rd party) Extermination Fire Detection System Monitoring (3rd party) Fire Extinguishers (3rd party) Security 10.0% $ 6,000 Calculation $ 11,165 3.0% $ Monthly Base Factors 1 2 3 Income - $ - $ - 2.0% Gross Rents 1,200 $ 1,236 $ 2,233 0.0% Unit 1 1600 SF $ 3,000 3% $ 36,000 $37,080 $ 38,192 Unit 2 1387 SF $ 2,000 3% $ 24,000 $24,720 $ 25,462 Unit 3 2360 SF $ 4,000 3% $ - $ - $ 48,000 Soft Costs Management Fee Security Deposits Held Gross Income $ 9,000 $ 60,019 $61,830 $111,703 Expenses Service Contracts Property Management (3rd party) Grounds /Parking (3rd party) Repairs /Maintenance Janitorial /Common Areas (3rd party) Extermination Fire Detection System Monitoring (3rd party) Fire Extinguishers (3rd party) Security 10.0% $ 6,000 $ 6,180 $ 11,165 3.0% $ 1,800 $ 1,854 $ 3,350 0.0% $ - $ - $ - 2.0% $ 1,200 $ 1,236 $ 2,233 0.0% $ - $ - $ - 1.0% $ 600 $ 618 $ 1,117 0.5% $ 300 $ 309 $ 558 0.0% $ - $ - $ Utilities Gas /Electric Common Areas $ 300.00 5% $ 3,600 $ 3,780 $ 3,969 Water /Sewer $ 5% $ _ $ _ $ _ Gargbage $ - 5% $ _ $ _ $ Tax & Insurance Possessory Tax 0% $ _ $ _ $ _ Property Liability Insurance 2% $ 1,200 $ 1,237 $ 1,261 City Operating and Admin Fees Operating (Staff) 5.0% $ 3,000 $ 3,090 $ 5,583 Overhead 0.0% $ - $ - $ Accounting (Staff) 5.0% $ 3,000 $ 3,090 $ 5,583 Management Fee 0.0% $ - $ - $ _ Security Deposits Security Deposits Held Interest 1.5% $ 135 $ 135 $ 135 Reserves Vacancy 2.0% $ 1,200 $ 1,236 $ 2,233 Operating 0.0% $ - $ _ $ - Replacement 15.0% $ 9,000 $ 9,270 $ 16,748 Total Operating Expenses $ 31,035 $11,035 $ 53,935 Net Operating Income -5- $ 28,984 $50,795 $ 57,768 4Zx sAN Successor Agency to the Redevelopment Agency o c�LIFOR Staff ReDOft DATE: August 13, 2014 TO: Chair, Vice Chair and Boardmembers FROM: Patrick O'Keeffe, Economic and Community Development Consultant SUBJECT: RECOMMEND OVERSIGHT BOARD ADOPT RESOLUTIONS APPROVING AMENDMENTS TO THE LEASE AGREEMENTS WITH SITIKE COUNSELING CENTER AND THE COUNTY OF SAN MATEO FOR THE FACILITY AT 306 SPRUCE AVENUE RECOMMENDATION That the Successor Agency Board recommend that the Oversight Board adopt resolutions authorizing amendments to the lease agreements with Sitike Counseling Center and the County of San Mateo for the facility at 306 Spruce Avenue and authorize the Successor Agency Executive Director or his designee to execute the Lease Amendments. BACKGROUND The medical facility located at 306 Spruce Avenue /472 Grand Avenue, is a 14,000 square foot parcel containing a three story building and an adjacent parking lot. The facility also has a dedicated parking lot at 468 Miller Avenue. The basement level of the building contains vacant office space, the building's mechanical systems (electrical, fire alarms, HVAC and boiler) and restrooms. The San Mateo County Health Center occupies the second floor and Sitike Counseling Center occupies the first floor. The roof of the building contains cell tower equipment installed by Sprint and the building's exhaust fans. Sitike's tenant space is partitioned into office spaces and counseling rooms, with an entry lobby, kitchen, child care facility, two disabled accessible restrooms, and access to an outdoor patio. Their lease includes four (4) on -site parking spaces and seven (7) spaces at the Miller Avenue parking lot. The Health Center is a primary care medical facility with exam rooms, a large office area, counseling rooms, a lobby, a computer server room, a meeting room and kitchen, and two disabled (men's and women's) accessible restrooms. The Health Center lease includes five (5) parking spaces in the adjacent lot and eleven (11) spaces in the lot on Miller Avenue DISCUSSION The San Mateo County Health Center and Sitike Counseling Center have held leases for 17 years and 18 years respectively. The Lease Agreements for both tenants require the Lessees to pay for all their utilities and to provide janitorial services while landscaping and all maintenance and repairs are the responsibility of the Successor Agency (Lessor). On August 20, 2013 the Oversight Board approved one year lease extensions for Sitike and the Health Center and the California State Department of Staff Report Subject: Sitike and Health Center Lease Amendments for 306 Spruce Avenue Page 2 Finance (DOF) affirmed the lease extensions. Sitike's current lease expires on August 31, 2014 and the County's lease will expire on October 31, 2014. The property at 306 Spruce Avenue is still subject to the provision of AB 1484 which requires the DOF's approval of a Long Range Property Management Plan (LRPMP). Until DOF approves the LRPMP, the Successor Agency may not take actions that affect the long term uses of 306 Spruce Avenue. Therefore, staff recommends that the Oversight Board approve one -year Lease Amendments for both Sitike and the Health Center. Market rent conditions have not significantly changed from last year; therefore staff recommends that the Oversight Board maintain the tenants' rent at their current rates. Sitike will continue to pay $1.03 per square foot for a total payment of $5,858.64 per month. The County will continue to pay $1.34 per square foot for a total payment of $8,370.89 per month. Staff believes that the rental rate of $1.03 to $1.34 per square foot is reasonable for an older building in the downtown core. Both tenants will continue to have lease provisions giving them 6 -month notices to vacate. This is a reasonable provision given the complexities of moving large operations and the difficulty involved in securing a suitable space that meets their size and accessibility requirements. CONCLUSION: Staff is recommending that the Successor Agency Board recommend to the Oversight Board that it approve one year lease extension amendments with a six -month notice to vacate without cause for Sitike Counseling Center and the County Health Center. Sitike will continue to pay $5,858.64 per month and the Health Center $8,370.89 per month. Combined, the tenants will generate $170,754.40 per year in revenues. Funds will be deposited into the Redevelopment Property Tax Trust Fund (RPTTF) to pay for expenditures approved in the City's Recognized Payment Obligation Schedule (ROPS). It is recommended that Successor Agency Board by motion recommend to the Oversight Board that it adopt resolutions authorizing amendments to the Lease Agreements with Sitike Counseling Center and the County of San Mateo for the facility at 306 Spruce Avenue and authorize the Successor Agency Executive Director or his designee to execute the Lease Amendments. The final form of the sublease agreeme ts, however, is subject to Successor Agency Attorney pproval. By: L By: Patrick O'Keeffe Mike Futrell Economic and Community Development Executive Director Consultant Attachments: Resolutions Sitike Lease Amendment San Mateo County Lease Amendment 2123836.1 FOR INFORMATION ONLY OVERSIGHT RESOLUTION NO. OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE CITY OF SOUTH SAN FRANCISCO REDEVELOPMENT AGENCY RESOLUTION OF OVERSIGHT BOARD APPROVING AN AMENDMENT TO THE LEASE AGREEMENT WITH THE COUNTY OF SAN MATEO FOR THE FACILITY AT 306 SPRUCE AVENUE WHEREAS, on May 2, 2011, the City of South San Francisco ( "City ") acquired that certain real property located at 306 Spruce Avenue in South San Francisco, California ( "Property ") from the former City of South San Francisco Redevelopment Agency ( "Agency "); and WHEREAS, the Property succeeded to and was acquired by the Successor Agency to the City of South San Francisco Redevelopment Agency ( "Successor Agency ") pursuant to ABx1 26 and AB 1484; and WHEREAS, a portion of the Property is leased to the County of San Mateo ( "Lessee ") for a Health Center, pursuant to that certain Retail Lease Agreement dated April 4, 2000, as amended from time to time ( "Lease Agreement "); and WHEREAS, on August 14, 2012, the Oversight Board for the Successor Agency approved an amendment to the Lease Agreement extending the term thereof for one year, to and including October 31, 2013; and WHEREAS, on August 20, 2013, the Oversight'Board for the Successor Agency approved an amendment to the Lease Agreement extending the term thereof for one year, to and including October 31, 2014; and WHEREAS, the Successor Agency and Lessee desire to extend the term of the Lease Agreement for an additional year, to and including October 31, 2015, pending the Successor Agency's preparation of a Long Term Property Management Plan ( "LTPMP ') and approval of the LTPMP by the Oversight Board and the California Department of Finance; and WHEREAS, the Successor Agency recommends amending the Lease Agreement, including extending the term of the Lease Agreement for one (1) year at the current rent, and permitting the Successor Agency to terminate the Lease Agreement without cause upon six months' written notice to Lessee. NOW, THEREFORE, the Oversight Board, does hereby: Approve an Amendment to the Lease Agreement with the County of San -I- Mateo, conditioned on Lessee's timely execution and submission of all required documents. 2. Authorize the Successor Agency's Executive Director or designee to (i) execute the Amendment to the Lease Agreement on behalf of the Successor Agency and Oversight Board, (ii) subject to the approval of the Successor Agency Attorney, make revisions to the Sublease that do not materially or substantially increase the Successor Agency's obligations thereunder; and (iii) take such other actions reasonably necessary to carry out the intent of this Resolution. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Oversight Board for the Successor Agency to the City of South San Francisco Redevelopment Agency at a meeting held on the 19' day of August, 2014 by the following vote: AYES: NOES: ABSTAIN. ABSENT. 2123819.1 ATTEST: -2- City Clerk FOR INFORMATION ONLY OVERSIGHT BOARD RESOLUTION NO. OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE CITY OF SOUTH SAN FRANCISCO REDEVELOPMENT AGENCY RESOLUTION OF OVERSIGHT BOARD APPROVING AN AMENDMENT TO THE LEASE AGREEMENT WITH SITIKE COUNSELING CENTER FOR THE FACILITY AT 306 SPRUCE AVENUE WHEREAS, on May 2, 2011, the City of South San Francisco ( "City ") acquired that certain real property located at 306 Spruce Avenue in South San Francisco, California ( "Property ") from the former City of South San Francisco Redevelopment Agency ( "Agency "); and WHEREAS, the Property succeeded to and was acquired by the Successor Agency to the City of South San Francisco Redevelopment Agency ( "Successor Agency ") pursuant to ABxl 26 and AB 1484; a WHEREAS, a portion of the Property is leased to the Sitike Counseling Center ( "Lessee ") pursuant to that certain Retail Lease Agreement dated December 2, 1996, as amended from time to time ( "Lease Agreement "); and WHEREAS, in 2007 Lessee exercised its option to extend the term of the Lease Agreement for five (5) years through February 28, 2012, continuing month to month thereafter; and, WHEREAS, on August 14, 2012, the Oversight Board for the Successor Agency approved an amendment to the Lease Agreement extending the term thereof for one year, to and including August 31, 2013; and WHEREAS, on August 20, 2013, the Oversight Board for the Successor Agency approved an amendment to the Lease Agreement extending the term thereof for one year, to and including August 31, 2014; and WHEREAS, the Successor Agency and Lessee desire to extend the term of the Lease Agreement for an additional year, to and including August 31, 2015, pending the Successor Agency's preparation of a Long Term Property Management Plan ( "LTPMP ") and approval of the LTPMP by the Oversight Board and the California Department of Finance. and WHEREAS, the Successor Agency recommends amending the Lease Agreement, including extending the term of the Lease Agreement for one (1) year at the current rent, and permitting the Successor Agency to terminate the Lease Agreement without cause upon six months' written notice to Lessee. -3- NOW, THEREFORE, the Oversight Board, does hereby: 1. Approve an Amendment to the Lease Agreement with the Sitike Counseling Center, conditioned on Lessee's timely execution and submission of all required documents. 2. Authorize the Successor Agency's Executive Director or designee to (i) execute the Amendment to the Lease Agreement on behalf of the Successor Agency and Oversight Board, (ii) subject to the approval of the Successor Agency Attorney, make revisions to the Sublease that do not materially or substantially increase the Successor Agency's obligations thereunder; and (iii) take such other actions reasonably necessary to carry out the intent of this Resolution. I hereby certify that the Foregoing Resolution was regularly introduced and adopted by the Oversight Board for the Successor Agency to the City of South San Francisco Redevelopment Agency at a meeting held on the 190' day of August, 2014 by the following vote: AYES: NOES: ABSTAIN: ABSENT: 2123800.1 ATTEST: -4- City Clerk AMENDMENT TO LEASE AGREEMENT THIS AMENDMENT TO LEASE AGREEMENT ( "Amendment ") is entered into effective as of September 1, 2014 ( "Effective Date "), by and between the Successor Agency to the City of South San Francisco Redevelopment Agency, a public entity ( "Lessor ") and Sitike Counseling Center, a California nonprofit public benefit corporation ( "Lessee "). Lessor and Lessee are hereinafter collectively referred to as the "Parties ". RECITALS A. The Lessee and Janet Siniora entered into that certain Retail Lease Agreement dated December 2, 1996 (the "Lease ") pursuant to which Lessee leases the entire first floor (the "Premises ") of that certain building located at 306 Spruce Avenue, South San Francisco, CA (the "Building'). B. On March 13, 2013, the Lessor acquired fee ownership of that certain real property located at 306 Spruce Avenue in South San Francisco, California ( "Property ") from the City of South San Francisco pursuant to Resolution No. 6 -2013. C. The original term of the Lease expired February 28, 2007. D. Lessee exercised its option to extend the term of the Lease for an additional period of five (5) years commencing March 1, 2007, through February 28, 2012. E. In 2012 the Lease was amended to extend the term thereof for one year, commencing on September 1, 2012, through August 31, 2013. F. In 2013 the Lease was amended to extend the term thereof for one year, commencing on September 1, 2013, through August 31, 2014. G. The Parties now desire to further amend the Lease pursuant to the terms and conditions set forth in this Amendment. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Term of the Lease. Notwithstanding anything to the contrary contained in the Lease, as amended from time to time, the term of the Lease shall be extended for one (1) year, commencing on September 1, 2013 and continuing through August 31, 2014 under the same terms and conditions as contained in the Lease and any amendment(s) thereto except as specifically set forth herein. 2. Rent. Commencing on September 1, 2014 the monthly rental payment shall be $5,858.64. -5- 3. 6 -Month Notice to Terminate. Notwithstanding anything to the contrary contained in the Lease, commencing on March 1, 2015, Lessor may terminate the Lease six (6) months after delivery of a written notice to vacate the Premises. Termination of the Lease will be effective six (6) months after Lessee's receipt of written notice. 4. Amendment. The Lease may be further amended or modified only by a written instrument executed by the Parties. 5. Construction. The section headings and captions used herein are solely for convenience and shall not be used to interpret this Amendment. 6. Action or Av roval. Whenever action and/or approval by Lessor is required under this Lease as amended hereby, Lessor's Executive Director or his or her designee may act on and/or approve such matter unless specifically provided otherwise, or unless the Executive Director determines in his or her discretion that such action or approval requires referral to Lessor's Governing Body for consideration. 7. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be an original and all of which taken together shall constitute one instrument. 8. Severability. If any term, provision, or condition of this Amendment is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Amendment shall continue in full force and effect unless an essential purpose of this Amendment is defeated by such invalidity or unenforceability. 9. No Third Party Beneficiaries. Nothing contained in this Amendment is intended to or shall be deemed to confer upon any person, other than the Parties and their respective successors and assigns, any rights or remedies hereunder. 10. Entire Agreement. This Amendment contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior oral or written agreements between the Parties with respect thereto. 11. Authorization. The undersigned each hereby represent and warrant that each is duly authorized to execute this Amendment. 12. Effectiveness of Lease. Except as expressly set forth in this Amendment, the Lease remains unmodified and in full force and effect. SIGNATURES ON FOLLOWING PAGE. 2 -6- IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment as of the date first written above. ATTEST: : City Clerk APPROVED AS TO FORM: LM City Attorney 2123849.1 Successor Agency to the Redevelopment Agency of the City of South San Francisco, a public entity Its: Sitike Counseling Center, a California nonprofit public benefit corporation LM Its 3 -7- AMENDMENT TO LEASE THIS AMENDMENT TO LEASE ( "Amendment ") is entered into effective as of October 1, 2014 ( "Effective Date "), by and between the Successor Agency to the City of South San Francisco Redevelopment Agency, a public entity ( "Lessor" or "Successor Agency ") and the County of San Mateo, a political subdivision of the State of California ( "Lessee "). Lessor and Lessee are hereinafter collectively referred to as the "Parties ". RECITALS A. On March 13, 2013, the Lessor acquired that certain real property located at 306 Spruce Avenue in South San Francisco, California ( "Property ") from the City of South San Francisco pursuant to Resolution No. 6 -2013. B. The Property is subject to that certain Lease Agreement ( "Lease ") dated April 4, 2000 by and between the Agency and the County of San Mateo ( "County ") pursuant to which the County leased the second floor of that certain building located on the Property ( "Premises ") f to operate a health services clinic. C. On March 13, 2013, the Successor Agency assumed the Lease from the City of South San Francisco pursuant to Resolution No. 6 -2013. D. The original term of the Lease expired on September 30, 2011 and was extended for one year through September 30, 2012. E. The term of the Lease was extended a second time for one year through October 31, 2013. F. The term of the Lease was extended a third time for one year through October 31, 2014. G. The Parties now desire to further amend the Lease pursuant to the terms and conditions set forth in this Amendment. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Term of the Lease. The Term of the Lease shall be extended for one (1) year, commencing on November 1, 2014 and continuing through October 31, 2015 under the same terms and conditions as contained in the Lease and any amendment thereto except as specifically set forth herein. 2. Rent. Commencing on the Effective Date, the Base Rent shall be $8,370.89 per month. 3. 6 -Month Notice to Terminate. Notwithstanding anything to the contrary contained in the 2123859.1 -8- Lease, commencing on May 1, 2015, Lessor may terminate the Lease six (6) months after delivery of a written notice to vacate the Premises. Termination of the Lease will be effective six (6) months after Lessee's receipt of written notice. 4. Parties. The term "Agency" as used in the Lease shall mean the Successor Agency as the Redevelopment Agency's and City's successor in interest. 5. Amendment. The Lease may be further amended or modified only by a written instrument executed by the Parties. 6. Construction. The section headings and captions used herein are solely for convenience and shall not be used to interpret this Amendment. 7. Action or Approval. Whenever action and/or approval by Lessor is required under this Lease as amended hereby, Lessor's Executive Director or his or her designee may act on and/or approve such matter unless specifically provided otherwise, or unless the Executive Director determines in his or her discretion that such action or approval requires referral to Lessor's Governing Board for consideration. 8. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be an original and all of which taken together shall constitute one instrument. 9. Severability. If any term, provision, or condition of this Amendment is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Amendment shall continue in full force and effect unless an essential purpose of this Amendment is defeated by such invalidity or unenforceability. 10. No Third Party Beneficiaries. Nothing contained in this Amendment is intended to or shall be deemed to confer upon any person, other than the Parties and their respective successors and assigns, any rights or remedies hereunder. 11. Entire Agreement. This Amendment contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior oral or written agreements between the Parties with respect thereto. 12. Authorization. The undersigned each hereby represent and warrant that each is duly authorized to execute this Amendment. 13. Effectiveness of Lease. Except as expressly set forth in this Amendment, the Lease remains unmodified and in full force and effect. SIGNATURES ON FOLLOWING PAGE. 2123859.1 2 -9- IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment as of the date first written above. Successor Agency to the Redevelopment Agency of the City of South San Francisco, a public entity Its: ATTEST: LN City Clerk APPROVED AS TO FORM: City Attorney County of San Mateo, a political subdivision of the State of California LN Its: ATTEST: By: County Clerk APPROVED AS TO FORM: By: County Counsel 2123859.1 3 -10- Successor Agency to the Redevelopment Agency Staff Report DATE: August 13, 2014 TO: Mayor and City Council FROM: Patrick O'Keeffe, Economic & Community Development Consultant SUBJECT: RECOMMENDATION OF THE SUCCESSOR AGENCY TO THE OVERSIGHT BOARD TO APPROVE AN EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT (ENRA) WITH SARES -REGIS RECOMMENDATION It is recommended that the City Council review an Exclusive Negotiating Rights Agreement (ENRA) with Miller Cypress SSF, LLC (Sares- Regis) for the development of the former Ford properties and make a recommendation to the Oversight Board it adopt a resolution authorizing the Successor Agency Executive Director to execute the ENRA with Miller Cypress SSF, LLC (Sares- Regis) that will lead to a Disposition and Development Agreement. BACKGROUND /DISCUSSION The attached provides the City Council information on the residential developments Sares -Regis is proposing to develop in the Downtown. This information, attached to this report as Exhibits A -1, A- 2 and A -3, includes a description of the project sites, the proposed project, a schedule and a draft Exclusive Negotiating Rights Agreement. These documents were prepared by staff and the developer following City Council selection of Sares -Regis as the preferred developer for the redevelopment of the Ford parcels. The City Council directed staff to work with the developer to confirm and /or modify the ENRA terms as noted in Table 1 below. Staff met with Sares -Regis to discuss the City Council's proposed changes, confirm assumptions and to consider any change Sares -Regis was interested in making to the draft ENRA. Table 1 below summarizes the terms Council asked staff to negotiate. The revised terms are included in detail in the attached ENRA (Exhibit B). Table 1 City Council Direction Resolution 1. $11.5 million proposed purchase price is Confirmed, may be modified for offsite capital acceptable as a starting point for further improvement contributions per 43 below. negotiations. 2. Shorten the proposed time schedule for the Schedule shortened by several months per 44 development to reduce time for entitlements. below. Staff Report Subject: Exclusive Negotiating Rights Agreement with Miller Cypress SSl~, LLC (Sares- Regis) for Properties 401, 411, 421 & 315 Airport Blvd, 405 Cypress Ave, and 216 Miller Ave. Page 2 Table 1 (continued) City Council Direction Resolution 3. Negotiate developer funded offsite The ENRA includes language that the Developer improvements to include: a) contribute to will make a contribution in an amount to be pedestrian path to CALTRAIN station; b) on - determined during negotiation of purchase site public art; c) or other public capital agreement for offsite improvements. improvements. 4. Negotiate a shorter ERNA period of 6 months The ENRA includes language that recognizes that to terminate February 28, 2015 (instead of the adoption of the Downtown Station Area Plan 12131115) (DSAP) and related Environmental Impact Report (EIR) are critical to the developer's ability to advance the project. Therefore, the term of the ENRA shall end eight (8) months from the date the City Council approves the Station Area Plan (and related EIR and Rezoning). 5. Negotiate additional deposit payments for any The ENRA includes language that the term of the time extensions beyond six months. ENRA may be extended for ninety (90) days upon the mutual agreement of Developer and Agency and a payment of $25,000 by the Developer. 6. Negotiate requirement for developer market Developer will conduct these studies and share studies to be completed within first 6 months them with the City. and results shared with the SA. 7. Negotiate the inclusion of a portion (up to Developer agreed to make eight units affordable at 20 %, or 8 units) of the units on site 3.5 the request income level for 55 years. The (assessor's parcel # 22 on Miller Ave.) as developer, however, will have the flexibility to affordable (income restricted for 55 years) to determine where the units will be located. This requirement will be incorporated into the purchase moderate income households (80- 120% agreement. AMI); and to market these units for initial rental to for public employees (school district and municipal). 8. Direct staff to negotiate the start of To ensure all of the sites are developed, the ENRA construction on the smaller Miller Ave. sites includes language stating that the properties will be 3.5 and 2.4 (assessor's parcels 22 & 10) entitled as one project and constructed as one immediately following construction of the project per a construction phasing schedule set forth in a development agreement. In addition, the larger parcels. Developer must have (1) approved project financing and (2) obtained building permits for all units prior issuance of certificate of occupancy for any units. Staff Report Subject: Exclusive Negotiating Rights Agreement with Miller Cypress SSF, LLC (Sares- Regis) for Properties 401, 411, 421 & 315 Airport Blvd, 405 Cypress Ave, and 216 Miller Ave. Page 3 If the revised ENRA terms are acceptable to the City Council, the next step is to forward the ENRA to the Oversight Board. The Oversight Board will review the ENRA and if it agrees with the terms adopt a resolution authorizing the Successor Agency Executive Director to execute the ENRA. Staff will then submit the ENRA to the California Department of Finance (DOF) for review. Table 2 below summarizes the actions every entity needs to take to advance this project. Table 2 — Disposition Process Ford Properties Disposition Approvals. • Successor Agency Approves ENRA • Oversight Board approves ENRA • DOF approves ENRA • Successor Agency Executive Director executes ENRA • DOF approves Successor Agency's Long Range Property Management Plan authorizing transferring the properties to the City • City Council approves Compensation Agreement with Taxing Agencies • Taxing Agencies approve Compensation Agreement • DOF Approves Compensation Agreement • City Approves DDA CONCLUSION It is recommended that the City Council review an Exclusive Negotiating Rights Agreement (ENRA) with Miller Cypress SSF, LLC (Sares- Regis) for the development of the former Ford properties and make a recommendation to the Oversight Board it adopt a resolution authorizing the Successor Agency Executive Director to execute the ENRA with Miller Cypress SSF, LLC (Sares- Regis) that will lead to a Disposition and Development Agreement. B ('C Y� Patrick O'Keeffe Economic Development Consultant Attachment: Exhibit A -1 —Map of Properties Exhibit A -2 — Project Description Exhibit A -3 — Project Concept Plans Exhibit B — ENRA / 9 Approved: L/ Mike Futrell City Manager Exhibit C — Oversight Board Resolution Exhibit A Ford Property Description The former Ford properties (as described in Table 1 below and Exhibit 1) consist of four development sites totaling approximately 2.18 acres. Table 1 Site ID Address Acres 2.1 401 -421 Airport Blvd. 1.06 2.2 315 Airport Blvd. 0.51 2.4 405 Cypress Ave. 0.20 3.5 216 Miller Ave. 0.41 Development Proposal Attached as Exhibit 2 is a description of the Sares- Regis' proposed development ENRA terms including a preliminary price offered for the property, the number of units and unit type composition, the project's amenities and other pertinent information. In summary Sares -Regis will develop all of the sites with approximately 266 units (see concept plans attached as Exhibit 3). Its preliminary purchase price offer is $11.5 million. Schedule Sares -Regis estimates that from the date it executes a DDA with the Successor Agency, it will take 18 months to entitle the project(s). Sares -Regis estimates construction will take 24 months. Based on their initial proposed phasing plan, this means 315 Airport Blvd. and the 400 block of Airport Blvd. will be completed in approximately 3% years from the date the Successor Agency (or City) and Sares -Regis execute the DDA. To ensure all of the sites are developed, the ENRA includes language stating that the properties will be entitled as one project and constructed as one project per a construction phasing schedule set forth in a development agreement. In addition, the Developer must have (1) approved project financing and (2) obtained building permits for all units prior issuance of certificate of occupancy for any units. Purchase Price Sares - Regis's preliminary purchase offer is $11.5 million. The proposed purchase price amounts to approximately $121 per square foot. This amount is significantly higher than the $95 per square foot the Redevelopment Agency paid for the land ($9 million in 2011) and the $65 per square foot staff estimated in the Long Range Property Management Plan (LRPMP). In order to reach this valuation, Sares -Regis would need to be able to achieve rent revenue in the range of $3.11 - $3.20 per square foot (roughly $2,400+ for a one - bedroom and $3,000+ for a two - bedroom). This offer price also takes into account paying union wages during construction. Exclusive Negotiating Rights Agreement (ENRA) The purpose of the ENRA is to give the Successor Agency and Sares -Regis time to negotiate a Purchase Agreement that will describe the terms and conditions governing the purchase of the properties and a Development Agreement that will set forth requirements and entitlements for the Project. -3- During the ENRA term, Sares -Regis will perform its due diligence on the properties including environmental reviews, surveys, soils reports, market studies and zoning requirements. These studies will enable the developer to more accurately determine the development potential of the site and any conditions it needs to remediate. An ENRA is necessary during this period because the developer is spending a significant amount of money conducting these studies and wants to be assured the Successor Agency is not in discussions with other developers for the property. Upon completion of its due diligence, Sares -Regis and the Successor Agency will negotiate a final purchase price for the property that takes into account the developer's due diligence results. Key components of the ENRA are: The proposed term for the ENRA shall end eight (8) months from the date the City Council approves the Station Area Plan (and related EIR and Rezoning). The ENRA can be extended 90 days. • The developer will submit to the Successor Agency a nonrefundable deposit of $50,000 that will provide for Successor Agency costs in preparing the purchase and sale agreement. Any funds remaining will be applied to the purchase price. • During negotiations the City and developer will negotiate a final purchase price based on the preliminary offer of $11.5 million with possible adjustments for factors such as: 1) a reduction in the number of units approved by the Planning Commission from what was proposed; 2) the results of a City appraisal of the land value; 3) clean -up costs for possible toxic contamination from prior uses; and developer studies on market rents and construction casts. • Developer will make progress reports to the Successor Agency every 90 days. • Developer will provide the Successor Agency its development pro forma, evidence of financing and development schedules. • The Successor Agency will have the right to terminate the agreement if the developer is not performing its obligations. • The product of the negotiating period is a Disposition and Development Agreement (DDA) that contains the terms and preconditions for conveyance of the property (final price, equity and debt financing in place, building permits approved, i.e. ready to commence construction). The DDA however, will not be ready for City Council consideration until other governmental approvals are obtained per below. The time frame for the ERNA builds in time for these approvals to occur. • Throughout the period on negotiations, if there are substantial changes to the project or the sales price, these will be presented to the Successor Agency in Closed Session for consideration. Approvals Because the Successor Agency owns the Ford properties and the California Department of Finance (DOF) has oversight review of Successor Agency properties, the Successor Agency faces additional steps and coordination for the disposition of the properties. As shown in Table 2 2 -2- below, the Successor Agency Board, the Oversight Board and DOF will all need to take actions to advance this project. Table 2 — Disposition Process Ford Properties Disposition Approvals • Successor Agency Approves ENRA • Oversight Board approves ENRA • DOF approves ENRA • DOF approves Successor Agency's Long Range Property Management Plan authorizing transferring the properties to the City • City Council approves Compensation Agreement with Taxing Agencies • Taxing Agencies approve Compensation Agreement • DOF Approves Compensation Agreement • City Approves DDA Attachment: Exhibit 1 --- Map of Ford Properties Exhibit 2 — Proposed ENRA Terms Exhibit 3 — Concept Plans -3- 2+10 1� J EXH I BIT A -1 6 o rf� o, o (D 0 a a LL J. -04r OFF'1Cc 15 ! 14 !s 1-3 17 cat I 117 1 jjjiii ?`�r A w 4,xl Air )cr /r,+ :114. Ir 1 E k a , Site 1.1 � 1,701 11\1 �6 in n Site 3.5 Site 2.4 Fwd, I r'p r4- 4 .rat 2V w � MILU a AVE, zoa M IS �i Y�plr-r Site f li 3 15 LAWF &I V s 1 A a^ j a 5 1 G? ' 3 7 d 5 >' 1 2 ii 15 {3 1 -t . 0 iJ j ti GRAND v AVE. �a �aa � bi ?:3 , ., J d b L , a LL J. -04r OFF'1Cc 15 ! 14 !s 1-3 17 cat I 117 1 jjjiii ?`�r A IS �i Y�plr-r Site f li 3 15 LAWF &I V s 1 A a^ j a 5 1 G? ' 3 7 d 5 >' 1 2 ii 15 {3 1 -t . 0 iJ j ti GRAND v AVE. �a �aa � W ,?TJ�y bi ?:3 , ., J d b L , �,i1� W ,?TJ�y bi ?:3 sI 1 I i LAVE / I� -4- EXHIBIT A -2 DEVELOPMENT PROPOSAL Criteria Sares -Regis Preliminary Land Purchase Price Offered . $11,500,000 Prevailing Wages for Construction Yes Sites • 401 -421 Airport Blvd. 315 Airport Blvd. • 405 Cypress Ave. • Miller Ave. Site Development Type Market -rate rental. Decision on pursuing condos on any site subject to cost- benefit analysis in the future. Condos will be subject to inclusionary housing ordinance Height (floors) • 401 -421 Airport — 6 stories (4 residential over 2 parking) • 315 Airport — 6 stories (4 residential over 2 parking) • 405 Cypress — 5 stories (4 residential over 1 parking) • Miller Avenue — 5 stories (4 residential over 1 parking) Proposed Number of Units 266 Total units • 401 -421 Airport —121 units • 315 Airport — 68 units • 405 Cypress — 37 units • Miller Avenue -- 40 units Unit Size Composition • 48% One - bedroom • 35% Two - bedroom • 13% Junior-One • 4% Three- bedroom Affordable Units 20% BMR would be required per inclusionary ordinance for condominiums -5- 2309796.1 -6- Retail Space /Live Work Live -work units along Cypress and Miller Avenue for projects facing Airport -Blvd. Project Amenities As presented during project tour: Common work /meeting areas, gym, outdoor space Parking 399 parking spaces, with a potential reduction in spaces if financeable Developer's Equity Stake 35% during construction phase Project Entitlement/ Purchase Agreement • S months after approval of Downtown Consideration and Construction Period Station Plan for consideration of approval of project entitlements including development agreement and purchase agreement • 24 :months for construction Project Phasing Project would be entitled as one project and constructed as one project per construction phasing schedule set forth in development agreement subject to force majeure provision. Developer must have (1) approved project financing and (2) obtained building permits for all units prior issuance of certificate of occupancy for any units. Offsite Public Improvements Make a contribution in an amount to be determined during negotiation of purchase agreement for offsite improvements (which will also be identified during project entitlement process and urchase agreement). 2309796.1 -6- O 0. O CL m a m � w i — mtw.,. -7- I to �h 2312414 EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT by and between MILLER- CYPRESS SSF, LLC and SOUTH SAN FRANCISCO SUCCESSOR AGENCY -8- EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT MILLER - CYPRESS SSF, LLC THIS EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT (this "Agreement ") is entered into by and between the SOUTH SAN FRANCISCO SUCCESSOR AGENCY, a public agency ( "Agency ") and MILLER CYPRESS SSF, LLC, a Delaware limited liability company ( "Developer ") dated as of (the "Effective Date"), which is the date this Agreement was approved by the South San Francisco Oversight Board and the South San Francisco Oversight Board ( "Oversight Board ") and the California Department of Finance ( "DOF "). Agency and Developer are each referred to as "Party" or collectively referred to as the "Parties." WHEREAS, the Agency is the owner of certain property certain real property (the "Property ") located in the City of South San Francisco, California, known as County Assessor's Parcel Numbers 012 - 317 -110 (401 Airport Boulevard), 012 - 317 -100 (411 Airport Boulevard), 012 - 317 -090 (421 Airport Boulevard), 012 -318 -030 (315 Airport Boulevard), 012- 314 -100 (405 Cypress Avenue), and 012 -314 -220( 216 Miller Avenue parking lot), as more particularly described in Exhibit A attached hereto and incorporated herein by this reference; and WHEREAS, the Property was transferred from the City of South San Francisco to the Agency pursuant to Grant Deeds recorded on 3 , ; and WHEREAS, on June 29, 2011 the legislature of the State of California (the "State ") adopted Assembly Bill xl 26 ( "AB 26 "), which amended provisions of the Redevelopment Law; and WHEREAS, pursuant to AB 26 and the California Supreme Court decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., which upheld AB 26 (together with AB 1484, the "Dissolution Law "), the Agency was dissolved on February 1, 2012; and WHEREAS, pursuant to the Dissolution Law, the Agency has prepared and the Oversight Board has approved a Long Range Property Management Plan ( "LRPMP") which is presently under review by DOF; and, WHEREAS, the LRPMP being reviewed by the DOF includes development plans for the sites in this Agreement which are consistent with this Agreement; and, WHEREAS, DOF approval of a LRPMP authorizing a process for conveyance of the Property is required prior to conveyance of the Property, and, WHEREAS, the Oversight Board approved this Agreement on , 2014 and DOF approved the Agreement on , 2014, and, WHEREAS, the Agency is interested in selling the Property to Developer contingent upon Developer preparing all appropriate environmental review documents, and applying for EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT GATEWAY EAST -1- 2190181.2 -9- land use entitlements from the City of South San Francisco and if such entitlements are granted constructing approximately 266 multi- family residential units ( "Project ") on the Property; and, WHERAS, the City of South San Francisco ( "City ") is currently processing the Downtown Station Area Plan ( "DSA Plan "), including related Environmental Impact Report ( "EIR ") under the California Environmental Quality Act ( "CEQA ") and related rezoning ( "Rezoning "), that includes the Property and is anticipated, if approved by the City Council, to allow for the development of Project on the Property, or similar type high density, transit - oriented multi - family residential project. The DSA Plan is currently anticipated to be considered by the City Council for final action by the end of 2014, and, WHEREAS, Developer anticipates expending funds to prepare environmental review documents, architectural and design drawings and conduct certain studies that are needed to assess the feasibility of the Project, consistent with the pending DSA Plan, EIR and Rezoning, and requires a grant of exclusive negotiating rights in order to be willing to make such expenditures; and WHEREAS, at its meeting on August 13, 2014 the Agency approved this Agreement and directed staff to negotiate a Purchase Agreement for the Property with Developer. 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. Good Faith Efforts to Negotiate. The Parties will use their best efforts to successfully negotiate (1) a Purchase Agreement which will describe the terms and conditions governing the purchase of the Property by Developer, and (ii) a Development Agreement between the City of South San Francisco ( "City ") and Developer that will set forth requirements and entitlements for the Project. The Parties will diligently and in good faith pursue such negotiations. Furthermore, the Parties will use their best efforts to obtain any third -party consent, authorization, approval, or exemption required in connection with the transactions contemplated hereby. This Agreement does not impose a binding obligation on Agency to convey any interest in the Property to Developer, nor does it obligate City to grant any approvals or authorizations required for the Property or any project or improvements constructed thereon. 2312414 a. If Developer has not continued to negotiate diligently and in good faith, Agency will give written notice thereof to Developer who will then have ten (10) business days to commence negotiating in good faith. Following the failure of Developer to thereafter commence negotiating in good faith within such ten (10) business day period, this Agreement may be terminated by Agency. If this Agreement is terminated by Agency pursuant to the above sentence, Developer acknowledges and agrees that Agency will suffer damages, including lost opportunities to pursue other development alternatives for the Property and delayed receipt of property tax EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT MILLER-CYPRESS SSF, LLC -10- revenues from the Property, and that it is impracticable and infeasible to fix the actual amount of such damages. Therefore, the Parties agree that if this Agreement is terminated as provided above, Agency will retain the Payment (as defined in Section 5 of this Agreement, inf °a), plus any interest thereon, as fixed and liquidated damages and not as a penalty, and following such termination neither Party will have any further rights against or liability to the other under this Agreement. b. If Agency has not continued to negotiate diligently and in good faith, Developer will give written notice thereof to Agency which will then have ten (10) business days to commence negotiating in good faith. Following the failure of Agency to thereafter commence negotiating in good faith within such ten (10) business -day period, this Agreement may be terminated by Developer. In the event of such termination by Developer, Agency will return the unused portion of the Payment to Developer in accordance with the provisions of Section 5 of this Agreement and neither Party will have any further rights against or liability to the other under this Agreement. If, notwithstanding Agency's and Developer's mutual diligent, good faith negotiations, the Parties have not entered into a Purchase Agreement on or before expiration of the Terra of this Agreement (as defined in Section 3 of this Agreement) or any extension thereof, Agency will return the Payment after taking into account any expenditures made for costs incurred by the Agency pursuant to this Agreement, and neither Party will have any further rights against or liability to the other under this Agreement. d. If performance of this Agreement results in execution of a Purchase Agreement, the Agency will apply any unused portion of the Payment to either the agreed - upon deposit or purchase price requirement of the Purchase Agreement. 2. Developer's Exclusive Right to Negotiate With Agency. Agency agrees that it will not, during the term of this Agreement, directly or indirectly, through any officer, employee, agent, or otherwise, solicit, initiate or encourage the submission of bids, offers or proposals by any person or entity with respect to the acquisition of any interest in the Property or the development of the Property, and Agency will not engage any broker, financial adviser or consultant to initiate or encourage proposals or offers from other parties with respect to the disposition or development of the Property or any portion thereof. 2312414 Furthermore, Agency will not, directly or indirectly, through any officer, employee, agent or otherwise, engage in negotiations concerning any such transaction with, or provide information to, any person other than Developer and its representatives with a view to engaging, or preparing to engage, that person with respect to the disposition or development of the Property or any portion thereof. -11- EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT MU -LER- CYPRESS SSF, LLC 3. Term. a. The term of Agreement ( "Term ") commences on the Effective Date, and will terminate eight (8) months from the date the City Council approves the Station Area Plan (and related EIR and Rezoning), unless extended or earlier terminated as provided herein. b. During the Term, Developer will provide Agency with progress reports a minimum of every ninety (90) days with respect to Developer's due diligence review of the Property, commencement of environmental requirements under CEQA, preparation of architecture and construction plans, and general progress toward development of the Property. C. During the Term, Agency will provide Developer with progress reports a minimum of every ninety (90) days with respect to the Agency's progress with the DOF approval of a LRPMP and the conveyance of the Property to the Developer and the City's progress with respect to processing and approval of the DSA Plan, EIR and Rezoning. d. The Term of this Agreement may be extended for up to a maximum of ninety (90) additional days upon the mutual written agreement of Developer and Agency acting through and in the discretion of its Agency Executive Director, or his/her designee ( "Agency Executive Director ") and the payment by Developer of $25,000. Developer understands that the Agency will only consider an extension of the Term of this Agreement where Developer has demonstrated, to the Agency's satisfaction, substantial progress towards development of the Property, by submittal of a permit application, the receipt of any City required environmental review documents necessary to satisfy CEQA, submittal of architecture and construction plans, payment of any applicable processing and plan check fees or undergoing City review of any necessary land use entitlements including a development agreement. 4. Relationship of the Parties. Nothing in this Agreement creates between the Parties the relationship of lessor and lessee, of buyer and seller, or of partners or joint venturers. 5. Payment for Agency Costs. 2312414 a. In consideration for this Agreement and the costs the Agency has and will incur in furtherance of this Agreement and the negotiation of the Purchase Agreement, Developer will, within five (5) days of the Effective Date, submit to Agency a deposit ( "Payment ") in the amount of Fifty Thousand Dollars ($50,000) in immediately available funds. Agency will deposit the Payment in an interest bearing account of the Agency and any interest, when received by Agency, will become part of the Payment. -12- EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT MILLER- CYPRESS SSF, LLC b. Agency agrees to account for deposit, interest earnings, and any expenditures made related to the execution of this Agreement consistent with all reporting requirements of the DOF. C. On or before expiration of the Term of this Agreement, the Agency may, in accordance with the provisions of Section 1 c of this Agreement, draw on the Payment to reimburse the Agency's cost for third -party assistance and staff time in the negotiations for and preparation of the Purchase Agreement. The Agency will notify the Developer of the identity, qualifications, scope of work and budget for any third party consultants that will be paid for by the Payment prior to authorizing work under any such third party contract and will provide Developer a written account of such reimbursement, including copies of any third party invoices under approved scopes of work (not including any information subject to attorney client privilege) upon the request of Developer. d. Any amount remaining in the Payment after expiration of the Term of this Agreement or execution of a Purchase Agreement, whichever comes first, and taking into account expenditures authorized by Section 5(b) above, will be disposed of as provided in Section 1 of this Agreement. e. In addition to Agency Costs discussed herein, Developer shall be subject to all applicable fees imposed by the City for processing land use entitlements as set forth in the City's adopted Master Fee Resolution dated June , 2014 and any applicable cost recovery and indemnifications agreements. b. Terms and Conditions of the Purchase Agreement. The Parties agree to use their best efforts to successfully negotiate a Purchase Agreement including, but not limited to, the lease terms, rental payments, terms of the purchase and the option price. The Parties agree the terms shall be generally based on those set forth herein and in Exhibit 1 attached hereto and incorporated herein by reference. 7. Developer's Studies; Right of Entry. 2312414 a. During the Term of this Agreement, Developer will use its best efforts to prepare, at Developer's expense, any studies, surveys, plans, specifications and reports ( "Developer's Studies ") Developer deems necessary or desirable in Developer's sole discretion, to complete its due diligence for the Property. Developer's Studies may include, without limitation, title investigation, marketing, feasibility, soils, seismic and environmental studies, financial feasibility analyses and design studies. The Developer will have rights of access to the Property to prepare the Developer's Studies. b. Developer hereby agrees to notify the Agency twenty -four (24) hours in advance of its intention to enter the Property. -13- EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT MILLER - CYPRESS SSF, LLC C. Developer will provide the Agency with work plans, drawings, and descriptions of any intrusive sampling it intends to do. Developer must keep the Property in a safe condition during its entry. Developer shall repair, restore and return the Property to its condition immediately preceding Developer's entry thereon at Developer's sole expense. d. Without limiting any other indemnity provisions set forth in this Agreement, Developer shall indemnify, defend (with counsel approved by Agency) and hold the Agency, its officials, officers, employees, consultants, contractors and volunteers ( "Agency Indemnities ") harmless from and against all claims resulting from or arising in connection with entry upon the Property by Developer or Developer's agents, employees, consultants, contractors or subcontractors pursuant to this Section 7; provided however, Developer will have no indemnification obligation with respect to the gross negligence or willful misconduct of any Agency Indemnities. Developer's indemnification obligations set forth in this Section 7 shall survive the termination of this Agreement and shall apply to any claims filed against the Agency within eighteen months of termination of this Agreement. C. If upon expiration of the Term of this Agreement the Parties have not successfully negotiated a Purchase Agreement, Developer will provide Agency within fifteen (15) days following said date of expiration copies of the Developer's Studies completed by such date, not including the intellectual property of Developer. Developer will also provide Agency with copies of any Developer's Studies completed after the expiration of the Term within fifteen (15) days following completion of such studies, or if Developer intends not to complete any Developer Studies, Developer will provide Agency with copies of such uncompleted studies. S. Agency's Reports and Studies. Within twenty (20) days following the Effective Date, Agency will make available to Developer for review or copying at Developer's expense all nonprivileged studies, surveys, plans, specifications, reports, and other documents with respect to the Property that Agency has in its possession or control, which have not already been provided. Studies or documents prepared by Agency and its agents solely for the purpose of negotiating the terms of a Purchase Agreement are not required to be provided by Agency to Developer and are excluded from this requirement. 9. Developer's Pro Forma Evidence of Financing and Schedule for Conveyance of Property Propgrty Following Potential Approval of a Purchase Agreement. At least 45 days prior to Agency consideration of the Purchase Agreement, Developer will provide Agency with a pro forma for the Project that confirms the financial feasibility of Developer's proposed development of the Property and planned financing for the Project. The parties agree that the Purchase Agreement will contain language that provides that: (1) not later than forty -five (45) day prior to conveyance of the Property, Developer will provide evidence satisfactory to Agency that Developer has secured binding commitments, EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT MILLER- CYPRESS SSP, L -C 2312414 -14- subject only to commercially reasonable conditions, for all funding necessary for the successful purchase of the Property and completion of the Project, and (2) prior to conveyance of Property Developer shall obtain approval of final construction plans for Airport Boulevard properties, and issuance of building permits for the Airport Boulevard properties. Not later than forty five (45) prior to consideration of the Purchase Agreement, Developer shall provide a development schedule for all Property. 10. Full Disclosure. Developer is required to make full disclosure to Agency of its principals; officers; major stockholders, partners or members; joint venturers; negotiators, development managers; consultants and directly involved managerial employees (collectively, "Developer Parties "); and all other material information concerning Developer. Any change in the identity of the Developer Parties will be subject to the approval of Agency, which will not be unreasonably withheld. Developer will make and maintain full disclosure to Agency of its methods of financing to be used in the acquisition and development of the Property. 11. Periodic Reporting to Governing B. Agency will report periodically to the Agency Board and/or the Oversight Board of the Successor Agency on the status of negotiations, and Developer may be asked to attend such meetings to provide those bodies with a status update of their development efforts related to this Agreement. 12. Reserved. 13. Confidentiality; Dissemination of Information. To the extent permitted by law, during the term of this Agreement, each Party will obtain the consent of the other Party prior to issuing or permitting any of its officers, employees or agents to issue any press release or other information to the press with respect to this Agreement; provided however, no Party will be prohibited from supplying any information to its representatives, agents, attorneys, advisors, financing sources and others to the extent necessary to accomplish the activities contemplated hereby so long as such representatives, agents, attorneys, advisors, financing sources and others are made aware of the terms of this Section. Nothing contained in this Agreement will prevent either Party at any time from furnishing any required information to any governmental entity or authority pursuant to a legal requirement or from complying with its legal or contractual obligations. 14. Execution of Purchase Agreement. The Agency has no legal obligation to grant any approvals or authorizations for the sale of the Property or any development thereon until the Purchase Agreement has been approved by the Agency, the South San Francisco Oversight Board and the California Department of Finance, if necessary. Such consideration and potential approval shall not occur until the Agency has completed, considered and certified /approved any required CEQA environmental review documents. 15. Termination. 23]2414 a. This Agreement may be terminated at any time by mutual consent of the Parties. -15- EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT MILLER - CYPRESS SSF, LLC b. Agency will have the right to terminate this Agreement upon its good faith determination that Developer is not proceeding diligently and in good faith to carry out its obligations pursuant to this Agreement. Agency will exercise such right in accordance with the provisions set forth in Section 1 of this Agreement. C. Developer will have the right to terminate this Agreement, in accordance with the provisions set forth in Section 1 of this Agreement, if the results of its investigation of the Property are unsatisfactory, in Developer's sole and absolute discretion, with respect to Developer's desired development activities or if Developer is unable to obtain other necessary approvals, rights or interests. d. Neither Party will have the right to seek an award of damages as a result of the termination of this Agreement pursuant to this Section. lb. Effect of Termination. Upon termination as provided herein, or upon the expiration of the Term and any extensions thereof without the Parties having successfully negotiated a Purchase Agreement, this Agreement will forthwith be void, and there will be no further liability or obligation on the part of either of the Parties or their respective officers, employees, agents or other representatives; provided however, the provisions of Section 11 (Expenses), Section 13 (Confidentiality; Dissemination of Information), Section 18 (Indemnification), and Section 22 (Brokers) will survive such termination. Provided further, that upon termination or expiration of this Agreement without the Parties having successfully negotiated a Purchase Agreement, Developer will deliver to Agency all of the Developer's Studies pursuant to the provisions of Section 7 of this Agreement. 17. Notices. Except as otherwise specified in this Agreement, all notices to he sent pursuant to this Agreement will be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices will be sent by: 2312414 a. Personal delivery, in which case notice is effective upon delivery; b. Certified or registered mail, return receipt requested, in which case notice will be deemed delivered on receipt if delivery is confirmed by a return receipt; C. Nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; d. Facsimile transmission, in which case notice will be deemed delivered upon transmittal, provided that L A duplicate copy of the notice is promptly delivered by first -class or certified mail or by overnight delivery, or EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT ME LLER- CYPRESS SSF, LLC u. A transmission report is generated reflecting the accurate transmission thereof Any notice given by facsimile will be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on a nonbusiness day. Agency: South San Francisco Successor Agency 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager Tel (650) 877 -8501 Fax (650) 829 -6609 with a copy to: Meyers Nave Attn: Steve Mattas 575 Market Street, Suite 2080 San Francisco, CA 94105 Tel (415) 421 -3711 Fax (415) 421 -3767 Developer: Sares -Regis Group of Northern California 901 Mariner's Island Boulevard, 7th Floor San Mateo, CA 94404 Attention: Mark Kroll and Andrew Hudacek Telephone: (650) 378 -2800 Email: mkroll(a,srgnc.com, ahudacek sr nc.com Holland & Knight LLP 50 California Street, Suite 2800 San Francisco, CA 94109 Attention: Tamsen flume Telephone: (415) 743 -6900 Email: tamsen.plume @hklaw.com 18. Indemnification. Developer hereby covenants, on behalf of itself and its permitted successors and assigns, to indemnify, hold harmless and defend the Agency and the City of South San Francisco and their elected and appointed officials, officers, agents, representatives and employees ( "Indemnitees ") from and against all claims, costs (including without limitation reasonable attorneys' fees and litigation costs) and liability, arising out of or in connection with this Agreement and/or arising out of or in connection with the Developer's access to and entry on the Property pursuant to Section 7 of this EXCLUSIVE NEGOTIATING RIG14TS AGREEMENT MRLLER- CYPRESS SSF, LLC 2312414 -17- Agreement; provided however, Developer will have no indemnification obligation with respect to the gross negligence or willful misconduct of any Indemnitee. 19. Severability. If any term or provision of this Agreement or the application thereof will, to any extent, be held to be invalid or unenforceable, such term or provision will be ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining terms and provisions of this Agreement or the application of such terms and provisions to circumstances other than those as to which it is held invalid or unenforceable unless an essential purpose of this Agreement would be defeated by loss of the invalid or unenforceable provision. 20. Entire Agreement; Amendments In Writing, Counterparts. This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral and written, between the Parties with respect to such subject matter. This Agreement may be amended only by a written instrument executed by the Parties or their successors in interest. This Agreement may be executed in multiple counterparts, each of which will be an original and all of which together will constitute one agreement. 21. Successors and Assigns; No Third -Party Beneficiaries. This Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and assigns; provided however, that neither Parry will transfer or assign any of such Party's rights hereunder by operation of law or otherwise without the prior written consent of the other Party, and any such transfer or assignment without such consent will be void. Notwithstanding the foregoing, Developer is permitted to assign this Agreement without such written consent, provided that Developer assigns this Agreement to (i) an entity that is wholly controlled by Developer, or (ii) an entity in which the Developer is a member and has day to day management responsibilities for such entity. Subject to the immediately preceding sentence, this Agreement is not intended to benefit, and will not run to the benefit of or be enforceable by, any other person or entity other than the Parties and their permitted successors and assigns. 22. Brokers. Each Party warrants and represents to the other that no brokers have been retained or consulted in connection with this transaction. Each Party agrees to defend, indemnify and hold harmless the other Party from any claims, expenses, costs or liabilities arising in connection with a breach of this warranty and representation. The terms of this Section will survive the expiration or earlier termination of this Agreement. 23. Approvals. Unless otherwise provided in this Agreement, the Agency Manager will be authorized to enter into all written approvals, consents or waivers by the Agency without further authorization by the Agency Council. Nothing herein, however, will be deemed to prevent the Agency Manager from requesting formal approval by the Agency Council if the Agency Manager, in his or her sole discretion, determines to seek such approval. 2312414 -Is- EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT MILLER- CYPRESS SSP, LLC 24. Captions. The captions of the sections and articles of this Agreement are for convenience only and are not intended to affect the interpretation or construction of the provisions hereof. 25. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written. above. AGENCY By: Mike Futrell Executive Director ATTEST: By: Agency Clerk APPROVED AS TO FORM: By: Steven Mattas Agency Counsel 2312414 -14- EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT MILLER- CYPRESS SSF, LLC DEVELOPER M. APPROVED AS TO FORM: M- 2312414 Tamsen Plume, Holland & Knight, Counsel for Developer -20- EXCLUSIVE NEGOTIATAVG RIGHTS AGREEMENT 1vIILI.ER- CYPRESS SSF, LLC 2312414 Exhibit A PROPERTY (Attach legal description of Property) -21- EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT MILLER- CYPRESS SSF, LLC EXHIBIT 1 DEVELOPMENT PROPOSAL Criteria Sares -Regis Preliminary Land Purchase Price Offered • $11,500,000 Prevailing Wages for Construction Yes Sites • 401 -421 Airport Blvd. • 315 Airport Blvd. a 405 Cypress Ave. • Miller Ave. Site Development Type Market -rate rental. Decision on pursuing condos on any site subject to cost - benefit analysis in the future. Condos will be subject to inclusionary housing ordinance Height (floors) . 401 -421 Airport — 6 stories (4 residential over 2 parking) • 315 Airport — 6 stories (4 residential over 2 parking) a 405 Cypress — 5 stories (4 residential over 1 parking) a Miller Avenue — 5 stories (4 residential over 1 parking) Proposed Number of Units 266 Total units • 401-421 Airport — 121 units • 315 Airport — 68 units • 405 Cypress — 37 units • Miller Avenue — 40 units Unit Size Composition a 48% One - bedroom • 35% Two - bedroom • 13% Junior -One a 4% Three- bedroom Affordable Units 20% BMR would be required per inclusionary J 2312414 dxa EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT MILLER - CYPRESS SSF, LLC 2312414.1 2312414 -23- EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT MILLER- CYPRESS SSF, LLC ordinance for condominiums Retail Space /Live Work Live -work units along Cypress and Miller Avenue for projects facing Airport -Blvd. Project Amenities As presented during project tour, Common work/meeting areas, gym, outdoor space Parking 399 parking spaces, with a potential reduction in spaces if financeable Developer's Equity Stake 35% during construction phase Project Entitlement/ Purchase Agreement • 8 months after approval of Downtown Consideration and Construction Period Station Plan for consideration of approval of project entitlements including development agreement and purchase agreement 24 months for construction. Project Phasing Project would be entitled as one project and constructed as one project per construction phasing schedule set forth in development agreement subject to force majeure provision. Developer must have (1) approved project financing and (2) obtained building permits for all units prior issuance of certificate of occu ancy for any units. Offsite Public Improvements Make a contribution in an amount to be determined during negotiation of purchase agreement for offsite improvements (which will also be identified during project entitlement process and purchase agreement). 2312414.1 2312414 -23- EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT MILLER- CYPRESS SSF, LLC RESOLUTION NO. RESOLUTION OF THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO APPROVING AN EXCLUSIVE NEGOTIATION RIGHTS AGREEMENT WITH MILLER - CYPRESS SSF, LLC FOR POTENTIAL DISPOSITION AND DEVELOPMENT OF FORMER FORD PROPERTIES WHEREAS, the Successor Agency ( "Agency ") is the owner of certain real property (the "Property ") located in the City of South San Francisco, California, known as County Assessor's Parcel Numbers 012- 317 -110 (401 Airport Boulevard), 012- 317 -100 (411 Airport Boulevard), 012 - 317 -090 (421 Airport Boulevard), 012 -318 -030 (315 Airport Boulevard), 012 -314 -100 (405 Cypress Avenue), and 012 -314 -220 (216 Miller Avenue parking lot); and WHEREAS, the Property was transferred from the City of South San Francisco to the Agency pursuant to Grant Deeds; and WHEREAS, on June 29, 2011 the legislature of the State of California (the "State ") adopted Assembly Bill x1 26 ( "AB 26 "), which amended provisions of the Redevelopment Law; and WHEREAS, pursuant to AB 26 and the California Supreme Court decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., which upheld AB 26 (together with AB 1484, the "Dissolution Law "), the Redevelopment Agency was dissolved on February 1, 2012; and WHEREAS, pursuant to the Dissolution Law, the Agency has prepared and the Oversight Board has approved a Long Range Property Management Plan ( "LRPMP ") which is presently under review by California Department of Finance ( "DOF "); and, WHEREAS, the LRPMP being reviewed by the DOF includes development plans for the Property; and, WHEREAS, DOF approval of a LRPMP authorizing a process for conveyance of the Property is required prior to conveyance of the Property, and, WHEREAS, the Agency is interested in selling the Property to Miller Cypress SSF, LLC, a Delaware limited liability company ( "Developer ") contingent upon Developer preparing all appropriate environmental review documents, and applying for land use entitlements from the City of South San Francisco and if such entitlements are granted constructing approximately 266 multi- family residential units ( "Project ") on the Property; and, WHEREAS, the Developer has requested the exclusive right to collaborate with City to develop the Project and negotiate with the Agency for the purpose of reaching agreement on a _24_ project description, appropriate land uses, economic feasibility, and a definitive agreement whose terms and conditions would govern any conveyance of the Property and the development of the Property; and WHEREAS, City desires to grant Developer the exclusive right to collaborate and negotiate with City with regard to development of the Property; and WHEREAS, the City Attorney has prepared an Exclusive Negotiation Rights Agreement ( "Agreement ") with Developer to reflect the terms and conditions of such exclusive collaboration and negotiation. NOW, THEREFORE, the Successor Agency to the former Redevelopment Agency 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 Agreement, substantially in the form attached hereto, is hereby approved, and the Executive Director or his designee is hereby authorized to execute it on behalf of the Successor Agency; to make revisions to the Agreement, with review and approval by the City Attorney, which do not materially or substantially increase the Agency'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. PASSED AND ADOPTED this 13th day of August, 2014, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: APPROVED: City Clerk Chair 2312642.1 2 -25-