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HomeMy WebLinkAbout2018-07-11 e-packet@6:00Wednesday, July 11, 2018 6:00 PM City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA Municipal Services Building, Council Chambers 33 Arroyo Drive, South San Francisco, CA Joint Special Meeting City Council and Successor Agency Special Meeting Agenda July 11, 2018Joint Special Meeting City Council and Successor Agency Special Meeting Agenda 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 and the City Council will hold a Joint Special Meeting on Wednesday, July 11, 2018, at 6:00 p.m., in the Municipal Services Building, Council Chambers, 33 Arroyo Drive, South San Francisco, California. Purpose of the meeting: Call to Order. Roll Call. Agenda Review. Public Comments - comments are limited to items on the Joint Special Meeting. ADMINISTRATIVE BUSINESS City Council only: Report regarding a resolution approving an Exclusive Negotiating Rights Agreement with SSF PUC Housing Partners, LLC, an affiliate of AGI Avant Group, Inc. and KASA Partners (“AGI-KASA” or “developer”) for the development of a former South San Francisco Redevelopment Agency property known as the PUC Site (APN 011-312-060), and authorizing the City Manager to execute an Exclusive Negotiating Rights Agreement on behalf of the City. (Mike Lappen, Economic Development Coordinator) 1. Resolution approving an Exclusive Negotiating Rights Agreement with SSF PUC Housing Partners, LLC, an affiliate of AGI Avant Group, Inc. and KASA Partners (“AGI-Kasa” or the “Developer”) for the development of a former South San Francisco Redevelopment Agency property known as the PUC Site (APN 011-312-060), and authorizing the City Manager to execute an Exclusive Negotiating Rights Agreement on behalf of the City. 1a. Page 2 City of South San Francisco Printed on 8/31/2018 July 11, 2018Joint Special Meeting City Council and Successor Agency Special Meeting Agenda CLOSED SESSION Closed Session: Conference with Real Property Negotiators: (Pursuant to Government Code Section 54956.8) Properties: 216 Miller Ave (APN 012-314-220) City Negotiators: Alex Greenwood and Nell Selander Negotiating Parties: City of South San Francisco, South San Francisco Successor Agency and Sares Regis Under Negotiations: Price and terms 2. Adjournment. Page 3 City of South San Francisco Printed on 8/31/2018 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-367 Agenda Date:7/11/2018 Version:1 Item #:1. Report regarding a resolution approving an Exclusive Negotiating Rights Agreement with SSF PUC Housing Partners,LLC,an affiliate of AGI Avant Group,Inc.and KASA Partners (“AGI-KASA”or “developer”)for the development of a former South San Francisco Redevelopment Agency property known as the PUC Site (APN 011-312-060),and authorizing the City Manager to execute an Exclusive Negotiating Rights Agreement on behalf of the City.(Mike Lappen, Economic Development Coordinator) RECOMMENDATION Staff recommends that the City Council adopt a resolution approving an Exclusive Negotiating Rights Agreement with SSF PUC Housing Partners,LLC,an affiliate of AGI Avant Group,Inc.and KASA Partners (“AGI-KASA”or “developer”)for the development of a former South San Francisco Redevelopment Agency property known as the PUC Site (APN 011-312-060),and authorizing the City Manager to execute an Exclusive Negotiating Rights Agreement on behalf of the City. BACKGROUND In 2007,the former Redevelopment Agency of the City of South San Francisco entered into an agreement with the City and County of San Francisco/San Francisco Public Utilities Commission to purchase 13.2 acres of land located in the vicinity of El Camino Real and Chestnut Avenue.The sale was completed and the property was transferred to the former Redevelopment Agency on January 31,2008.Within this 13.2-acre property,there is a 5.9-acre site -currently referred to as the “PUC Site”-that is the subject of the current developer solicitation process. The PUC Site consists of two vacant lots totaling approximately 5.9 acres,identified as APN 093-312-060 (see map,Attachment 1).The PUC Site offers an outstanding opportunity for mixed-use development,due to its large contiguous land area,extensive frontage along Mission Road,and direct pedestrian access to the South San Francisco Bay Area Rapid Transit (BART)Station,El Camino Real shopping,Centennial Trail/Colma Creek, and other amenities. Long Range Property Management Plan Following the dissolution of redevelopment agencies across California in 2011,the Successor Agency to the former Redevelopment Agency of the City of South San Francisco (“Successor Agency”)prepared a Long Range Property Management Plan (LRPMP).The California Department of Finance formally approved the LRPMP in 2015.Housing properties were transferred to the City as the housing successor and the non-housing properties were transferred to the Successor Agency.Subsequently,as required by the LRPMP and Dissolution law,the Successor Agency transferred non-housing properties to the City for disposition consistent with the LRPMP.The City is now responsible for disposition of these non-housing properties.The LRPMP designated the PUC property for future development,specifically,for disposition and development of uses consistent City of South San Francisco Printed on 7/3/2018Page 1 of 3 powered by Legistar™ File #:18-367 Agenda Date:7/11/2018 Version:1 Item #:1. the PUC property for future development,specifically,for disposition and development of uses consistent with the El Camino Real/Chestnut Area Plan. El Camino Real/Chestnut Avenue Area Plan The PUC Site is zoned according to the El Camino Real/Chestnut Avenue Area Plan,with designations including High Density Residential,El Camino Real Mixed Use North,El Camino Real Mixed Use North High Intensity, El Camino Real Mixed Use North Medium Intensity, and Public Use. Developer Selection Process In order to dispose of the PUC Site in a manner consistent with the LRPMP,on May 1,2017,the City issued a Request for Qualifications (“RFQ”)for a well-qualified development team to create a high-quality,mixed-use, transit-oriented development on the PUC Site.Twelve development teams responded.In October 2017,the Housing Standing Committee of the City Council and Planning Commission (“Committee”)approved a short list of developers that were then invited to respond to a Request for Proposals (“RFP”).The 90-day RFP process concluded on February 5,2018.Five developer teams submitted responses to the RFP:AGI-KASA, Blake Griggs, Republic Metropolitan, Sares Regis, and SummerHill Housing Group. On March 12 and 13,2018,the Committee interviewed the five developer teams that submitted responses to the RFP.Each team presented their project and answered specific questions related to project design,architecture, project management,financing methods,proposed community benefits,and construction phasing.The two-day interview period culminated in a closed session during which price and terms were presented to the Committee. Needing more information from three of the developer teams,the Committee invited AGI-KASA,Blake Griggs,and SummerHill Housing Group to provide answers to specific Committee-directed questions on March 20, 2018. On March 28,2018 and May 2,2018,the joint City Council and Successor Agency met to discuss the PUC project,recommend a developer team for approval by the Oversight Board,and direct staff to negotiate the Exclusive Negotiating Rights Agreement (ENRA).The City Council selected AGI-KASA as the preferred developer and directed City staff to enter into the ENRA process with SSF PUC Housing Partners,LLC,an affiliate of AGI Avant Group, Inc. and KASA Partners. DISCUSSION Exclusive Negotiating Rights Agreement Since the selection of AGI-KASA,staff has been working closely with the developer on negotiating an ENRA. The purpose of the ENRA is to establish procedures and standards for the negotiation between the City and SSF PUC Housing Partners,LLC,in order to enter into a Development Agreement (DA)and a final Purchase Agreement (PSA)or a Development and Disposition Agreement (DDA).Key business points that are contained in the ENRA (see Attachment 1 to the associated Resolution) include the following: Term:The term of the ENRA commences on the effective date and will have an initial term of 365 days,unless extended or earlier terminated as provided below. City of South San Francisco Printed on 7/3/2018Page 2 of 3 powered by Legistar™ File #:18-367 Agenda Date:7/11/2018 Version:1 Item #:1. Term Extension:The term of the ENRA may be extended for up to a maximum of three separate 60-day periods upon the receipt of an additional payment of $50,000 for each 60 day extension periods. Developer Reporting:Developer will provide City with progress reports every 60 days with respect to Developer’s due diligence review of the property,commencement of environmental requirements under the California Environmental Quality Act (CEQA),preparation of architecture and construction plans,and general progress toward development of the property. Deposit:Within 10 business days of the effective date of the ENRA,the Developer will remit to City a deposit in the amount of $150,000. Pro Forma:Developer will provide the City with a pro forma for the project that confirms the financial feasibility of Developer’s proposed development and planned financing for the project. Prevailing Wages for Construction:The Developer will construct the project using prevailing wage,unless otherwise approved by the City Council. Affordable Units:At least 20 percent of the total number of units in the Project will be affordable,and all of the project’s affordable units will be constructed with the first residential phase,unless otherwise approved by the City Manager. Oak Avenue Extension:Developer will fund and construct the Oak Avenue Extension as designed by the City in consultation with interested parties, including the Developer. Community Outreach:Within 30 days of the approval of the ENRA,the developer will submit a comprehensive community outreach plan for approval by City staff. Next Steps Following approval of the ENRA by the City Council,staff will present the deal terms and initial sales price offer to the Oversight Board in closed session.At the conclusion of the term of the ENRA,staff will bring forward a DA and PSA or DDA for Council consideration,along with the project entitlements for the proposed development. CONCLUSION Staff recommends that the City Council adopt a Resolution authorizing the City Manager to enter into an Exclusive Negotiating Rights Agreement with SSF PUC Housing Partners,LLC,an affiliate of AGI Avant Group, Inc. and KASA Partners for the development of the PUC Site (APN 011-312-060). Attachments: 1.Site Map City of South San Francisco Printed on 7/3/2018Page 3 of 3 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-558 Agenda Date:7/11/2018 Version:1 Item #:1a. Resolution approving an Exclusive Negotiating Rights Agreement with SSF PUC Housing Partners,LLC,an affiliate of AGI Avant Group,Inc.and KASA Partners (“AGI-Kasa”or the “Developer”)for the development of a former South San Francisco Redevelopment Agency property known as the PUC Site (APN 011-312-060), and authorizing the City Manager to execute an Exclusive Negotiating Rights Agreement on behalf of the City. WHEREAS,the City of South San Francisco is the owner of certain real property located in the City of South San Francisco (“City”),California,known as County Assessor’s Parcel Number 093-312-060 and referred to as the “PUC Site”; and, WHEREAS,the PUC Site consists of two vacant lots totaling approximately 5.9 acres and offers an outstanding opportunity for mixed-use development,due to its large contiguous land area,extensive frontage along Mission Road,and direct pedestrian access to the South San Francisco Bay Area Rapid Transit (“BART”) Station, El Camino Real shopping, Centennial Trail / Colma Creek, and other amenities; and, WHEREAS,the PUC Site is zoned according to the El Camino Real/Chestnut Avenue Area Plan,with designations including High Density Residential,El Camino Real Mixed Use North,El Camino Real Mixed Use North High Intensity,El Camino Real Mixed Use North Medium Intensity,and Public Use.These Zoning designations allow for 80 to 120 foot height limits and floor area ratios of 2.0 to 3.0; and, WHEREAS,the former Redevelopment Agency of the City of South San Francisco (“RDA”)purchased the PUC Site from the City and County of San Francisco/San Francisco Public Utilities Commission on January 31, 2008; 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 RDA was dissolved on February 1, 2012; and, WHEREAS,pursuant to the Dissolution Law,the Successor Agency to the Redevelopment Agency for the City of South San Francisco (“Successor Agency”or “Agency”)prepared a Long Range Property Management Plan (“LRPMP”),which was approved by a resolution of the Oversight Board for the Successor Agency to the Redevelopment Agency of the City of South San Francisco (“Oversight Board”) on November 19, 2013; and, WHEREAS,on May 21,2015,the Oversight Board approved the Amended Long Range Property Management Plan (“LRPMP”),which was approved by the California Department of Finance (“DOF”)on October 1,2015; and, WHEREAS,the LRPMP establishes a plan for transferring or selling the all former RDA properties,includingCity of South San Francisco Printed on 7/17/2018Page 1 of 3 powered by Legistar™ File #:18-558 Agenda Date:7/11/2018 Version:1 Item #:1a. WHEREAS,the LRPMP establishes a plan for transferring or selling the all former RDA properties,including those properties identified in the LRPMP that were transferred from the Successor Agency to the City for redevelopment activities consistent with the Redevelopment Plan and the LRPMP; and, WHEREAS,the Property is identified in the LRPMP as one of the properties to be transferred from the Successor Agency to the City for development consistent with an approved redevelopment project pursuant to Health and Safety Code section 34191.5(c)(2)and in accordance to the requirements set forth in the LRPMP; and, WHEREAS,pursuant to the LRPMP and Dissolution Law,the Agency’s transfer of real property assets to the City for future development is subject to the provisions of a Master Agreement for Taxing Entity Compensation by all Taxing Entities; and, WHEREAS,the City and Taxing Entities entered into an Amended and Restated Master Agreement for Taxing Entity Compensation,dated October 18,2016 (“Master Compensation Agreement”),which governs the distribution of any net proceeds received from the sale of the PUC Site; and, WHEREAS,consistent with the terms of the LRPMP and the Master Agreement for Taxing Entity Compensation, the Agency transferred the Property to the City; and, WHEREAS,in order to dispose of the PUC Site in a manner consistent with the LRPMP,on May 1,2017,the City issued a Request for Qualifications (“RFQ”)for a well-qualified development team to create a high- quality, mixed-use, transit-oriented development on the PUC Site. Twelve development teams responded; and, WHEREAS,responses to the RFQ were reviewed and reduced to a list of eight finalists,which were interviewed by a six-member Review Panel of community members and City staff.Following the interviews, the Review Panel recommended that four developers be invited to respond to a Request for Proposals (“RFP”), subject to Committee approval; and, WHEREAS,in October 2017,staff sent the approved RFP to the selected developer teams.The 90-day solicitation concluded on February 5,2018.Five developer teams submitted responses to the RFP:AGI-KASA, Blake Griggs, Republic Metropolitan, Sares Regis, and SummerHill Housing Group; and, WHEREAS,on March 12 and 13,2018,the Housing Standing Committee of the City Council and Planning Commission (“Committee”)interviewed the five developer teams that submitted responses to the RFP.Each team presented their project and answered specific questions related to project design,architecture,project management, financing methods, proposed community benefits, and construction phasing; and, WHEREAS,on March 28,2018 and May 2,2018,the City Council held meetings to review the Committee recommendation and further discuss the developers’ qualifications; and, WHEREAS, the City Council selected SSF PUC Housing Partners, LLC, an affiliate of AGI Avant Group, Inc. and KASA Partners to enter into an Exclusive Negotiation Rights Agreement (“ENRA”), attached here as Exhibit A; and, NOW,THEREFORE,BE IT RESOLVED that the City Council of the City of South San Francisco does hereby take the following actions: City of South San Francisco Printed on 7/17/2018Page 2 of 3 powered by Legistar™ File #:18-558 Agenda Date:7/11/2018 Version:1 Item #:1a. 1.The foregoing recitals as true and correct. 2.The ENRA, substantially in the form attached hereto as Exhibit A, is approved. 3.The City Manager is authorized to execute the ENRA on behalf of the City. 4.The City Manager is authorized to make revisions to the ENRA,with review and approval as to form by the City Attorney,which do not materially or substantially increase the City’s obligations thereunder;to sign all documents;to make all approvals and take all actions necessary or appropriate to carry out and implement the intent of this Resolution. ***** City of South San Francisco Printed on 7/17/2018Page 3 of 3 powered by Legistar™ EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT PUC SITE DEVELOPER EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT by and between SSF PUC Housing Partners, LLC and CITY OF SOUTH SAN FRANCISCO 2 THIS EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT (this “Agreement”) is entered into by and between SSF PUC Housing Partners, LLC, an affiliate of AGI Avant Group, Inc. and KASA Partners (“AGI–Kasa” or the “Developer”) and the CITY OF SOUTH SAN FRANCISCO, a municipal corporation (“City”), dated as of (the “Effective Date”). City and Developer are each referred to as “Party” or collectively referred to as the “Parties.” WHEREAS, the City is the owner of certain real property (the “Property”) located in the City of South San Francisco, California, known as County Assessor’s Parcel Number (“APN”) 093- 312-060, as more particularly described in Exhibit A attached hereto and incorporated herein by this reference; and, WHEREAS, the former Redevelopment Agency of the City of South San Francisco (“RDA”) purchased the Property from the City and County of San Francisco/San Francisco Public Utilities Commission on January 31, 2008; 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 RDA was dissolved on February 1, 2012; and, WHEREAS, pursuant to the Dissolution Law, the Successor Agency to the Redevelopment Agency for the City of South San Francisco (“Successor Agency” or “Agency”) prepared a Long Range Property Management Plan (“LRPMP”), which was approved by a resolution of the Oversight Board for the Successor Agency to the Redevelopment Agency of the City of South San Francisco (“Oversight Board”) on November 19, 2013, and on May 21, 2015, the Oversight Board approved the Amended Long Range Property Management Plan (“LRPMP”), which was approved by the California Department of Finance (“DOF”) on October 1, 2015; and, WHEREAS, the LRPMP establishes a plan for transferring or selling the all former RDA properties, including those properties identified in the LRPMP to be transferred from the Successor Agency to the City for redevelopment activities consistent with the Redevelopment Plan and the LRPMP; and, WHEREAS, the Property is identified in the LRPMP as one of the properties to be transferred from the Successor Agency to the City for development consistent with an approved redevelopment project pursuant to Health and Safety Code section 34191.5(c)(2) and in accordance to the requirements set forth in the LRPMP; and, WHEREAS, pursuant to the LRPMP and Dissolution Law, the Agency’s transfer of real property assets to the City for future development is subject to the provisions of a Master Agreement for Taxing Entity Compensation by all Taxing Entities; and, 3 WHEREAS, the City and Taxing Entities entered into an Amended and Restated Master Agreement for Taxing Entity Compensation, dated October 18, 2016 (“Master Compensation Agreement”), which governs the distribution of any net proceeds received from the sale of the Property; and, WHEREAS, consistent with the terms of the LRPMP and the Master Agreement for Taxing Entity Compensation, the Agency transferred the Property to the City; and, WHEREAS, in late October 2017, staff sent a request for proposals (“RFP”) to the selected final developer teams. The 90-day solicitation concluded on February 5, 2018. Five developer teams submitted responses to the RFP: AGI-KASA, Blake Griggs, Republic Metropolitan, Sares Regis, and SummerHill Housing Group; and, WHEREAS, on March 12 and 13, 2018, the Joint Housing Subcommittee (“Committee”) interviewed the five developer teams that submitted responses to the RFP; and, WHEREAS, on March 28, 2018 and May 2, 2018, the City Council for the City of South San Francisco held a public meetings to solicit public comment and review the Committee recommendation, selected AGI-KASA and authorized staff to begin to negotiate this Agreement; and, WHEREAS, the City is interested in selling the Property to Developer consistent with Dissolution Law, the LRPMP, and the Master Compensation Agreement, contingent upon Developer supplying a Term Sheet (“Term Sheet”), preparing all appropriate environmental review documents, and applying for land use entitlements from the City and if such entitlements are granted constructing a high-density, multi-family development including ground floor retail space, a child care center, and twenty (20) percent affordable housing (“Project”) on the Property; and, WHEREAS, Developer anticipates expending funds to conduct further community outreach to refine the Project, prepare environmental review documents, architectural and design drawings and conduct certain studies that are needed to assess the feasibility of the Project and seek land use entitlements and therefore requires a grant of exclusive negotiating rights in order to be willing to make such expenditures; and WHEREAS, at its meeting on July 11, 2018, City approved this Agreement and directed staff to negotiate a disposition 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 a property disposition agreement that will describe the terms and conditions governing the disposition of the Property by City, and will be accompanied with the 4 necessary project entitlements (“Purchase Agreement”). 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 City 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. a. If Developer has not continued to negotiate diligently and in good faith, City 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 City. If this Agreement is terminated by City pursuant to the above sentence, Developer acknowledges and agrees that City will suffer damages, including lost opportunities to pursue other development alternatives for the Property and delayed receipt of property tax 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, City will retain the full ENRA Deposit and Reimbursement Deposit amounts (as defined in Section 5 of this Agreement, infra), 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, except as set forth in Section 15 of this Agreement. b. If City has not continued to negotiate diligently and in good faith, Developer will give written notice thereof to City which will then have ten (10) business days to commence negotiating in good faith. Following the failure of City to thereafter commence negotiating in good faith within such ten (10) business-day period, this Developer, City will return a prorated portion of the ENRA Deposit and any unspent portion of the Reimbursement 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, except as set forth in Section 15 of this Agreement. c. If the Parties proceed to negotiate diligently and in good faith, but are unable to reach agreement on the terms of disposition and development, then City will return a prorated portion of the ENRA Deposit and any unspent portion of the Reimbursement Deposit to Developer in accordance with the provisions of Section 5(c) of this Agreement and neither Party will have any further rights against or liability to the other under this Agreement, except as set forth in Section 15 of this Agreement. 2. Developer’s Exclusive Right to Negotiate With City. City 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 5 development of the Property, and City 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. Furthermore, City 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. 3. Term. a. The term of this Agreement (“Term”) commences on the Effective Date. The Agreement will have an initial term of 365 days, unless extended or earlier terminated as provided herein. b. During the Term, Developer will provide City with progress reports every sixty (60) 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. The Term of this Agreement may be extended for up to a maximum of three (3) separate sixty (60) day periods upon the receipt of an additional ENRA Deposit under Section 5(a), of fifty thousand dollars ($50,000) for each sixty (60) day extension period (“ENRA Extension Deposit”), and the consent of the City acting through and at the discretion of its City Manager, or his/her designee (“City Manager”). The Developer understands that the City will only consider extension(s) of the Term of this Agreement where Developer has demonstrated, to the City’s satisfaction, substantial progress toward development of the Property, including, but not limited to, community outreach, submittal of a development 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. d. The Term of this Agreement may also be extended for additional time when the City directs Developer to halt or pause in its deliverables or due diligence required under this ENRA. In the instance when the City directs a halt or pause in the schedule the ENRA may be extended by the City Manager and Developer for a commensurate time that the schedule was paused. 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. Deposits to City. 6 a. In consideration for the right to exclusively negotiate under this Agreement, Developer will, within ten (10) business days of the Effective Date, remit to City a deposit in the amount of One Hundred Thousand Dollars ($150,000), which will be credited toward the final negotiated purchase price of the Property (“ENRA Deposit”). City will deposit the ENRA Deposit in an interest bearing account of the City and any interest, when received by City, will become part of the ENRA Deposit. During the term of this Agreement, Developer will reimburse City for all reasonable staff and consultant time necessary to draft and negotiate the Purchase Agreement for the disposition of the Property. Developer will, within ten (10) business days of the Effective Date, remit to City a payment in the amount of Fifty Thousand Dollars ($50,000) in immediately available funds (“Reimbursement Deposit”). Any funds previously deposited by Developer pursuant to a preliminary application will be credited towards the Reimbursement Deposit. City will deposit the Reimbursement Deposit in an interest bearing account of the City and any interest, when received by City, will become part of the Reimbursement Deposit. The Reimbursement Deposit may be drawn upon by the City to reimburse staff, City Attorney, and City consultant costs to draft documents for, negotiate and facilitate the disposition of the Property. Should the full amount of the Reimbursement Deposit be exhausted during the term of the Agreement, the City may require the Developer to provide additional funds to recover staff and consultant costs. Documentation of staff time and consultant costs will be retained and provided to the Developer upon request. b. City agrees to account for the ENRA Deposit and Reimbursement Deposit, interest earnings, and any expenditures made in furtherance of this Agreement consistent with all reporting requirements of the DOF. c. In the event that Developer terminates this Agreement before the expiration of the Term pursuant to Section 1(b) or Section 14(c), the City will return any prorated portion of the ENRA Deposit to the Developer. The prorated ENRA Deposit will be calculated by dividing the full ENRA Deposit (including any ENRA Extension Deposits) by the number of months in the Agreement Term. This amount will be multiplied by the number of months remaining on the Term at the time of Developer’s termination. The resulting figure will be the prorated ENRA Deposit that the City will reimburse to the Developer. d. In the event the Agreement is terminated by either Party for any reason other than Developer’s breach of its obligations under this Agreement, the remaining balance of the Reimbursement Deposit and any interest earned will be returned to Developer, minus amounts that the City retains attributable to the amount of costs and consulting fees actually and reasonably incurred and documented by City in implementing this Agreement, as set forth in subsection (a) of this Section 5. 7 e. In addition to the payments to City 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 and any applicable cost recovery and indemnifications agreements. 6. 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 affordability covenants, commercial property use restrictions, vesting and certainty of fees and exactions through a stand-alone Development Agreement with the City, terms of the purchase and the option price. The Parties agree the terms of the ultimate disposition agreement shall be based on those terms set forth herein and in Exhibit B, attached hereto and incorporated herein by reference. 7. Developer’s Studies; Right of Entry. a. During the Term of this Agreement, Developer will use its best efforts to prepare, at Developer’s sole cost and 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 City twenty-four (24) hours in advance of its intention to enter the Property. c. Developer will provide the City 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 City) and hold the City, its officials, officers, employees, and volunteers (“City Parties”) 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; excluding claims caused by the gross negligence or willful misconduct of the City Parties. Developer’s indemnification obligations set forth in this Section 7 shall survive the termination of this Agreement for a period of two (2) years or as otherwise superseded by the terms of the Purchase Agreement. 8 e. If upon expiration of the Term of this Agreement the Parties have not successfully negotiated a Purchase Agreement, Developer will provide City within fifteen (15) days following said date of expiration copies of the Developer’s Studies completed by such date. Developer will also provide City 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 City with copies of such uncompleted studies. 8. City’s Reports and Studies. Within ten (10) business days following the Effective Date, City will make available to Developer for review or copying at Developer’s expense all non- privileged studies, surveys, plans, specifications, reports, and other documents with respect to the Property that City has in its possession or control, which have not already been provided. Studies or documents prepared by City and its agents solely for the purpose of negotiating the terms of a Purchase Agreement are not required to be provided by City to Developer and are excluded from this requirement. 9. Developer’s Pro Forma, Evidence of Financing and Schedule for Conveyance of Property Following Potential Approval of a Purchase Agreement. At least 45 days prior to City consideration of the Purchase Agreement, Developer will provide City 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 will address the following pre-conveyance requirements: (1) evidence satisfactory to City that Developer has secured binding commitments, subject only to commercially reasonable conditions, for all funding necessary for the successful purchase of the Property and completion of the Project, (2) evidence satisfactory to City, that Developer has a signed construction contract for the completion of the Project, and Developer’s contractor has or will obtain payment and performance bonds sufficient to ensure completion of the Project, and (3) obtain approval of final construction plans for the Project, and issuance of building permits for the Project. 10. Full Disclosure. Developer is required to make full disclosure to City of its principals; officers; major stockholders, partners or members; joint ventures; negotiators; development managers; consultants and directly involved managerial employees (collectively, “Developer Parties”); and all other material information concerning Developer. Any material change in the identity of the Developer Parties will be subject to the approval of City, which will not be unreasonably withheld. Developer will make and maintain full disclosure to City of its methods of financing to be used in the acquisition and development of the Property. 11. Periodic Reporting to Governing Bodies. City will report periodically to the City Council, Agency Board and/or the Oversight Board 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. 9 12. 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. 13. Execution of Purchase Agreement. The City 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 City. Such consideration and potential approval shall not occur until the City has completed, considered and certified/approved any required CEQA environmental review documents. 14. No Binding Commitments. City has no legal obligation to grant any approvals or authorizations for the disposition and development of the Property until approved by the City Council. Such approvals, and any future approvals required as part of the entitlement process, are subject to completion of environmental review by City in accordance with CEQA, and City shall not take any discretionary actions committing it to a particular course of action in connection with the Project until City has completed, considered and certified/approved any additionally required CEQA environmental review documents. 15. Termination. a. This Agreement may be terminated at any time by mutual consent of the Parties. b. City or Agency shall 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. City or 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. 10 16. 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 5 (Deposits to City), Section 7(d), Section 12 (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 City 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 be 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: 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 i. A duplicate copy of the notice is promptly delivered by first-class or certified mail or by overnight delivery, or ii. 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. City : City of South San Francisco Attn: City Manager 400 Grand Avenue South San Francisco, CA 94080 Tel (650) 877-8501 Fax (650) 829.6609 with a copy to: Meyers Nave Attn: Jason Rosenberg 11 555 12th Street, Suite 1500 Oakland, CA 94607 Tel (510) 808-200 Fax (510) 444-1108 City of South San Francisco Attn: Economic and Community Development Director 400 Grand Avenue South San Francisco, CA 94080 Developer: SSF PUC Housing Partners, LLC c/o AGI Avant Group Inc. 100 Bush Street, Suite 1450 San Francisco, CA 94104 with a copy to: Holland and Knight LLP Attn: Tamsen Plume 50 California Street, Suite 2800 San Francisco, CA 94111 18. Indemnification. Developer hereby covenants, on behalf of itself and its permitted successors and assigns, to indemnify, hold harmless and defend the City of South San Francisco and their elected and appointed officials, officers, agents, representatives and employees, the Agency 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 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 12 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 Party 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 an entity that is wholly controlled by Developer. 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 City Manager will be authorized to enter into all written approvals, consents or waivers by the City without further authorization by the City Council. Nothing herein, however, will be deemed to prevent the City Manager from requesting formal approval by the City Council if the City Manager, in his or her sole discretion, determines to seek such approval. 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. ~ SIGNATURES ON FOLLOWING PAGE ~ IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. CITY By: Mike Futrell City Manager ATTEST: By: City Clerk APPROVED AS TO FORM: By: Jason Rosenberg City Attorney DEVELOPER By: APPROVED AS TO FORM: By: Tamsen Plume, Holland & Knight Counsel for SSF PUC Housing Partners, LLC EXHIBIT A Property EXHIBIT B Criteria DEVELOPER Committment Prevailing Wages for Construction Yes, or as approved by the City Council Sites The project area comprises the Property as defined in Exhibit A. Development Type High-density, mixed-use development. Affordable Units At least twenty percent of the total number of units in the Project shall be affordable and constructed with the first residential phase, unless otherwise approved by the City Manager. Retail Space/Live Work Yes Project Amenities Childcare center Public open space Centennial way improvements Ground floor retail Developer’s Equity Stake Minimum 35% Oak Avenue Extension Developer shall fund and construct the Oak Avenue Extension as designed by the City in consultation with interested parties, including the Developer. The City and Developer shall mutually agree upon the final cost of construction of the Oak Avenue Extension. Developer will contribute their fair share to the overall cost of the Extension and will be reimbursed for the remaining construction costs. The City and Developer shall agree upon when the City is required to reimburse the Developer. Community Facilities District Developer shall support and participate in any planned Community Facilities District affecting the Property. Project Entitlement/ Purchase Agreement Consideration and Construction Period Prior to approval of Purchase Agreement, Developer shall prepare all necessary documents for project entitlements and complete all necessary public hearings for consideration of approval. Developer Proforma Developer shall provide a pro forma based on the entitlement package, and other terms negotiated during ENRA period. Forty-five (45) days prior to City consideration of the Purchase Agreement, developer will provide City with a pro forma for the Project that confirms the financial feasibility and planned financing sources, including letters of intent from equity partners. Relocation/Replacement The Developer shall be responsible for all “on-site” work to relocate and upgrade required utilities and infrastructure on the property. The City and Developer shall mutually agree to the scope of work to relocate and upgrade required “off-site” utilities and infrastructure, including, by not limited to, along Mission Road. The final scope of the work and costs shall be finalized in the Purchase Agreement. Community Outreach Within thirty (30) days of the approval of the ENRA, the developer shall submit a comprehensive community outreach plan for approval by City staff, which will establish a plan to meet the timelines set in this Agreement. City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-566 Agenda Date:7/11/2018 Version:1 Item #:2. Closed Session: Conference with Real Property Negotiators: (Pursuant to Government Code Section 54956.8) Properties: 216 Miller Ave (APN 012-314-220) City Negotiators: Alex Greenwood and Nell Selander Negotiating Parties: City of South San Francisco, South San Francisco Successor Agency and Sares Regis Under Negotiations: Price and terms City of South San Francisco Printed on 7/5/2018Page 1 of 1 powered by Legistar™