HomeMy WebLinkAbout2018-08-08 e-packet@7:01Wednesday, August 8, 2018
7:01 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
August 8, 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, August 8, 2018, at 7:01 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.
CONSENT CALENDAR
Report regarding a resolution approving the second amendments to the Development
Agreement and Purchase and Sale Agreements for 201-219 Grand Avenue and 418
Linden Avenue with ROEM Development Corporation. (Julie Barnard, Economic
Development Coordinator)
1.
Resolution approving the second amendments to the Development Agreement and
Purchase and Sale Agreements for 201-219 Grand Avenue and 418 Linden Avenue
with ROEM Development Corporation.
1a.
Successor Agency only:
Report regarding a resolution approving the first amendment to the Purchase and Sale
Agreement between the South San Francisco Successor Agency and SSF Miller
Cypress Phase 2, LLC amending the supplemental purchase price for 216 Miller
Avenue (APN 012-314-220) to a fixed amount of $1,118,538 (Nell Selander,
Economic and Community Development Deputy Director).
2.
Resolution approving the first amendment to the Purchase and Sale Agreement
between the South San Francisco Successor Agency and SSF Miller Cypress Phase 2,
LLC amending the supplemental purchase price for 216 Miller Avenue (APN
012-314-220) to a fixed amount of $1,118,538.
2a.
Adjournment.
Page 2 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 #:18-621 Agenda Date:8/8/2018
Version:1 Item #:1.
Report regarding a resolution approving the second amendments to the Development Agreement and Purchase
and Sale Agreements for 201-219 Grand Avenue and 418 Linden Avenue with ROEM Development
Corporation.(Julie Barnard, Economic Development Coordinator)
RECOMMENDATION
Staff recommends that City Council adopt a resolution approving the second amendments to the Development
Agreement and Purchase and Sale Agreements for 201-219 Grand Avenue and 418 Linden Avenue with ROEM
Development Corporation to grant a 90-day extension to the project completion date.
BACKGROUND
On September 6,2017,the City Council approved two Purchase and Sale Agreements,two Affordable Housing
Agreements,and a Development Agreement between the City and the developer,ROEM Development
Corporation (“ROEM”), for the properties 201-219 Grand Avenue and 418 Linden Avenue.
The PSAs and DA include the sale of two properties that were already entitled.The entitlements included the
following:
1.A mixed-use project at 201-219 Grand Avenue (“201 Grand Avenue”)(owned by the
Successor Agency)with ground floor commercial space,a leasing office,a resident lounge,
and 46 residential rental units, of which nine are Below Market Rate (“BMR”) units.
2.A residential project at 418 Linden (owned by the City)with 38 residential rental units,of which
eight are BMR units.
Extensions to Development Agreement and Purchase and Sale Agreements
First Amendment
In January 2018,ROEM informed staff of complexities relating to the 201 Grand Avenue site.The developer
noted that the neighboring building was physically bonded and possibly leaning onto the building at the project
site,thus requiring more time to conduct investigative demolition.The developer also requested additional time
to develop a demolition strategy and demolition drawings,in order to ensure the demolition process did not
compromise the neighboring building.
Pursuant to Section 7.2 of the Development Agreement,any amendment to the Development Agreement which
the City determines is minor and does not substantially affect the term and schedule of performance is
considered an administrative agreement amendment.ROEM requested an additional 120 days to complete the
process,which would not change the project completion schedule.Staff acknowledged the complexity and
proceeded with the first administrative amendments to the agreements.
Second Amendment
In July 2018,ROEM approached the City again with a request to extend the deadlines by an additional 90 days
(see Attachment 1).This extension relates to the financing plan portion of the project,which is a requirement to
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close escrow. The deadline for application for building permits remains the same.
The developer has successfully sought financing for twelve of the eligible BMR units from the Housing
Authority of the County of San Mateo (“HACSM”).The HACSM vouchers will allow the developer to secure
equity,receive better financing terms and,improve their Internal Rate of Return (“IRR”)and therefore improve
the overall financial feasibility of the development.
The County of San Mateo has recognized that,due to the significant contribution of financing from the City for
the BMR units,these developments are a City priority and that they are also willing to provide financial
assistance (see Attachment 2).Receiving final determination on the HACSM vouchers requires a competitive
bidding process and completion of a National Environmental Policy Act (“NEPA”)study to secure the federal
funding.The NEPA study takes approximately four months and is already underway.In order to finalize its
financing plan, ROEM is waiting on the final determination for the HACSM vouchers.
Staff finds that the requested extension to the performance schedule is minor and qualifies as an administrative
amendment pursuant to Section 7.2 of the Development Agreement.Because the requested amendment from
ROEM extends the project completion date by 90 days,staff is bringing the second amendment to City Council
for approval by resolution as permitted by the Development Agreement.
Developer Performance
The developer has performed well and has submitted their Construction Drawings (“CDs”)for building permits
on schedule.The first set of CDs was submitted on July 13,2018,with the first round of comments back to the
developer on August 3, 2018. Staff has no concerns with the developer’s overall project progress.
FISCAL IMPACT
This 90-day extension request delays close of escrow and delays the date the City will receive the funds.
However,there will be no impact on the General Fund.Staff time and other costs incurred,related to the
administrative processing of the extension,will be divided equally between the two projects with one portion
(201-219 Grand Avenue portion)being deducted from the sale price before distribution to the taxing entities.
The second portion will be deducted from the deposit received during the Exclusive Negotiating Rights
Agreement phase.
CONCLUSION
Staff recommends that City Council adopt a resolution approving the second amendments to the Development
Agreement and Purchase and Sale Agreements for 201-219 Grand Avenue and 418 Linden Avenue to grant a 90
-day extension to the project completion date.
Attachments:
1.ROEM Request for 90-day extension memo
2.Letter from the County of San Mateo regarding the HACSM vouchers
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City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #:18-660 Agenda Date:8/8/2018
Version:1 Item #:1a.
Resolution approving the second amendments to the Development Agreement and Purchase and Sale
Agreements for 201-219 Grand Avenue and 418 Linden Avenue with ROEM Development Corporation.
WHEREAS,on June 29,2011,the Legislature of the State of California (“State”)adopted Assembly Bill x1 26
(“AB 26”),which amended provisions of the State’s Community Redevelopment Law (Health and Safety Code
sections 33000 et seq.)(“Dissolution Law”),pursuant to which the former Redevelopment Agency of the City
of South San Francisco (“City”) was dissolved on February 1, 2012; and
WHEREAS,the City elected to become the Successor Agency to the Redevelopment Agency of the City of
South San Francisco (“Successor Agency”); and
WHEREAS,pursuant to Health and Safety Code Section 34191.5(c)(2)(C),property shall not be transferred to
a successor agency,city,county or city and county,unless a Long Range Property Management Plan
(“LRPMP”)has been approved by the Oversight Board and the California Department of Finance (“DOF”);
and
WHEREAS,in accordance with the Dissolution Law,the Successor Agency prepared a 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 May 21,2015,and was approved by the DOF on October
1, 2015; and
WHEREAS,consistent with the Dissolution Law and the LRPMP,certain real properties located in the City of
South San Francisco,that were previously owned by the former Redevelopment Agency,were transferred to the
Successor Agency (“Agency Properties”); and
WHEREAS,on October 18,2016,the City entered into an Amended and Restated Master Agreement for
Taxing Entity Compensation (“Compensation Agreement”)with the various local agencies who receive shares
of property tax revenues from the former redevelopment project area (“Taxing Entities”),which provides that
upon approval by the Oversight Board of the sale price,and consistent with the LRPMP,the proceeds from the
sale of any of the Agency Properties will be distributed to the Taxing Entities in accordance with their
proportionate contributions to the Real Property Tax Trust Fund for the former Redevelopment Agency; and
WHEREAS,on February 8,2017,the City adopted Resolution 16-2017 approving the transfer of the Agency
Properties from the Successor Agency to the City and in accordance with the requirements set forth in the
LRPMP,and on February 21,2017,the Oversight Board adopted a resolution approving the transfer of the
redevelopment properties from the Successor Agency to the City; and
WHEREAS,consistent with the LRPMP and the Oversight Board resolution,the Successor Agency and City
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File #:18-660 Agenda Date:8/8/2018
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executed and recorded grant deeds transferring the Agency Properties to the City; and
WHEREAS,the real properties located at 201-219 Grand Avenue (“201 Grand Avenue”)located in the City of
South San Francisco,California,known as Assessor Parcel Numbers (“APNs”)012-316-110,012-316-100,012
-316-090 and 012-316-080,are Agency Properties and are subject to the provisions of the LRPMP and the
Compensation Agreement; and
WHEREAS,the real property located at 418 Linden Avenue (“418 Linden Avenue”)located in the City of
South San Francisco, California, known as APN 012-314-010, is a City owned property; and
WHEREAS,the City Council selected ROEM Development Corporation (“Developer”)to develop the
properties; and
WHEREAS,on September 6,2017,the City Council (“Council”)approved two Purchase and Sale Agreements,
two Affordable Housing Agreements (“AHAs”),and a Development Agreement between the City and the
Developer for the properties at 201 Grand Avenue and 418 Linden Avenue; and
WHEREAS,pursuant to Section 7.2 of the Development Agreement,any amendment to the Development
Agreement which the City determines is minor and does not substantially affect the term and schedule of
performance is considered an administrative agreement amendment; and
WHEREAS,in January 2018,Developer requested more time to develop a demolition strategy and demolition
drawings and requested a 120 day extension to the Performance Schedule in the Purchase and Sale Agreements
and Development Agreement without adjusting the overall project completion date; and
WHEREAS,on March 28,2018,Developer and City entered into the First Administrative Amendments to the
Purchase and Sale Agreements and Development Agreement (“First Amendment”)to modestly extend the
deadlines within the Performance Schedule in order to provide sufficient time to undertake the complex
demolition presented at 201-219 Grand Avenue; and
WHEREAS,in July 2018,Developer received Housing Authority of the County of San Mateo (“HACSM”)
vouchers for twelve of the Below Market Rate units (“BMRs”),which will provide approximately $1.5 million
to finance the project; and
WHEREAS,the Developer needs to complete a National Environmental Policy Act (“NEPA”)study required
under federal law to receive money from the federal government in the form of HACSM vouchers for the
twelve BMRs; and
WHEREAS,the additional time requested by the Developer adjust the adjusts the overall project completion
date by 90 days in order to complete the NEPA study and secure the HACSM vouchers; and
WHEREAS, the 90 day extension does not impact the City’s General Fund; and
WHEREAS,the Performance Schedule in the Purchase and Sale Agreements and Development Agreement now
need to be further amended in order to accommodate the 90 day extension,as set forth in Exhibit A and Exhibit
B respectively.
NOW,THEREFORE,BE IT RESOLVED by the City Council of the City of South San Francisco that the City
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File #:18-660 Agenda Date:8/8/2018
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NOW,THEREFORE,BE IT RESOLVED by the City Council of the City of South San Francisco that the City
Council does hereby resolve as follows:
1.The foregoing recitals are true and correct and incorporated herein as part of this Resolution.
2.The proposed actions in this Resolution are consistent with the Long Range Property Management Plan.
3.The Second Amendment to the Development Agreement and the Second Amendments to the Purchase
and Sale Agreements （”Second Amendments”),attached hereto as Exhibit A and Exhibit B,
respectively, are incorporated herein and hereby approved.
4.The City Manager,or his designee,is authorized to execute the Second Amendments and any necessary
related documents.
5.The City Manager,or his designee,is authorized take any and all other actions necessary to implement
this intent of this Resolution, subject to approval as to form by the City Attorney.
*****
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Recording Requested by
and when Recorded, return to:
City of South San Francisco
400 Grand Ave
South San Francisco, CA 94080
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
(SPACE ABOVE THIS LINE RESERVED FOR RECORDER’S USE)
SECOND AMENDMENT
TO DEVELOPMENT AGREEMENT
This Second Amendment to Development Agreement (“Second Amendment”) is entered
into by and between ROEM Development Corporation, a California corporation (“Developer”) and
the CITY OF SOUTH SAN FRANCISCO, a municipal corporation (“City”) on this _____ day of
_________________, 2018.
RECITALS
A. Pursuant to City Council Ordinance No. 1541-2017 (“DA Ordinance”), the City entered
into a Development Agreement between City and Developer (“Development Agreement”) for the
joint development of a residential project at 418 Linden Avenue and a mixed-use project at 201-219
Grand Avenue (together, the “Project”).
B. Pursuant to Section 7.2 of the Development Agreement, any amendment to the
Development Agreement which the City determines is minor and does not substantially affect the
term and schedule of performance is considered an administrative agreement amendment .
C. On March 28, 2018, Developer and City entered into that certain First Administrative
Amendment to Development Agreement (“First Amendment”), whereby the parties agreed to
modestly extend the deadlines within the Performance Schedule contained within the Development
Agreement in order to provide sufficient time to undertake the complex demolition presented at
201-219 Grand Avenue.
D. On July 11, 2018, Developer requested a second amendment to the Development
Agreement (“Second Amendment”) to further extend the deadlines within the Schedule of
Performance contained in the First Amendment to the Development Agreement and First
Amendment to the Purchase and Sale Agreements for the Project.
E. The City and the Developer have determined that the Schedule of Performance attached
to the First Amendment to the Development Agreement as Exhibit E does not provide sufficient
time to undertake the National Environmental Protection Agency (“NEPA”) study required under
federal law for Developer to receive money from the federal government in the form of vouchers
from the Housing Authority of San Mateo County (“HACSM”), which will provide approximately
$1.5 million to finance the Project.
F. The additional time requested in the Second Amendment to complete the NEPA study to
receive HACSM funding adjusts the overall Project completion date by ninety (90) days. Pursuant to
Section 7.2 of the Development Agreement, the City has determined that the amendment is minor
and does not substantially affect the term and schedule of performance, and the Second
Amendment does not require notice or public hearing and may be approved by City resolution.
NOW, THEREFORE, in consideration of the mutual covenants and promises of the
parties herein contained, the City and Developer agree as follows:
AMENDMENT TO AGREEMENT
1. Recitals. The foregoing recitals are true and correct and hereby incorporated herein.
2. Defined Terms. All capitalized terms not defined herein shall have the meanings ascribed
to them in the Development Agreement.
3. Administrative Amendment to Exhibit E. Exhibit E to the Development Agreement is
revised to read as follows, with additions in double underline and deletions in strikethrough:
EXHIBIT E
Developer’s Project Schedule of Performance
Milestone Deadline
1 50% Construction Drawings (CDs) and
Proforma
May 15, 2018
2 100% CDs submitted for building permits
and Updated Proforma
July 14, 2018
3 Construction Financing Secured and
Construction Contract Executed
November 12, 2018
August 13, 2018
4 If building permit application and 100%
CDs were completed in #2, building permit
ready for issuance
December 11, 2018
September 12, 2018
5 Close of Escrow and Property Conveyance By December 21, 2018
Within Ten (10) Days from Satisfaction
of All Contingencies
September 12, 2018
6 Demolition Start January 5, 2019
September 27, 2018
Within fifteen (15) days from Close of
Escrow
7 Construction Start April 5, 2019
December 26, 2018
Within One Hundred and Five (105) days
after Close of Escrow
8 Construction Completion August 13, 2020
May 14, 2020
Thirty (30) months after Effective Date
4. Effect of Second Amendment. Except as expressly modified by this Second
Amendment, the Development Agreement shall continue in full force and effect according
to its terms, and Developer and City hereby ratify and affirm all their respective rights and
obligations under the Development Agreement, including but not limited to Developer’s
indemnification obligations as set forth in Section 13 of the Development Agreement. In
the event of any conflict between the Second Amendment or the Development Agreement,
the provisions of this Second Amendment shall govern.
5. Binding Agreement. This Second Amendment shall be binding upon and inure to the
benefit of the heirs, administrators, executors, successors in interest, and assigns of each of
the parties hereto. Any reference in this Second Amendment to a specifically named party
shall be deemed to apply to any successor, administrator, executor, or assign of such party
who has acquired an interest in compliance with the terms of this Second Amendment or
under law.
6. Recordation. The City shall record a copy of this Second Amendment together with
recordation of the Development Agreement.
7. Counterparts. This Second Amendment may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which, when taken together, shall constitute
the same document.
8. California Law. This Second Amendment shall be governed by and interpreted in
accordance with the laws of the State of California.
9. Invalidity. Any provision of this Second Amendment that is determined by a court of
competent jurisdiction to be invalid or unenforceable shall be deemed severed from this
Second Amendment, and the remaining provisions shall remain in full force and effect as if
the invalid or unenforceable provision had not been a part hereof
10. Headings. The headings used in this Second Amendment are for convenience only and
shall be disregarded in interpreting the substantive provisions of this Second Amendment.
IN WITNESS WHEREOF, this Second Amendment has been entered into by and between
Developer and City as of the date and year first above written.
[SIGNATURES ON THE FOLLOWING PAGE]
ROEM Development Corporation,
a California Corporation
By: ROEM Development Corporation,
a California Corporation, President
By: ______________________________________________________________
Name: ____________________________________________________________
Title: _____________________________________________________________
Date: _____________________________________________________________
CITY OF SOUTH SAN FRANCISCO
By:
Name: Charles Michael Futrell
Title: City Manager
Date:
APPROVED AS TO FORM:
By: ___________________
Jason Rosenberg,
City Attorney
ATTEST:
By: ____________________
Krista J. Martinelli
City Clerk
2985784.4
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT
This Second Amendment to Purchase and Sale Agreement (this “Second
Amendment”) is made effective as of ________, 2018 (“Effective Date”) by and between
CITY OF SOUTH SAN FRANCISCO, a municipal corporation (“Seller”) and ROEM
Development Corporation, a California Corporation (“Buyer”). Seller and Buyer are
sometimes individually referred to herein as a “party” and collectively as “the parties.”
RECITALS
A. Seller and Buyer entered into that certain Purchase and Sale Agreement
dated November 14, 2017 (the “Agreement”) with respect to that certain real property
located at 201-219 Grand Avenue, South San Francisco, California (Assessor’s Parcel
Numbers 012-316-110, 012-316-100, 012-316-090 and 012-316-080) (collectively, the
“Property”).
B. On March 28, 2018, Seller and Buyer entered into that certain First
Amendment to Purchase and Sale Agreement dated March 28, 2018 (the “First
Amendment”), , whereby the parties agreed to extend the deadlines within the Buyer’s
Schedule of Performance as set forth in Section 5 of the Agreement.
C. Seller and Buyer now desire to further amend certain provisions of the
Agreement, as amended by the First Amendment, as set forth herein (“Second
Amendment”).
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and incorporating all of the above as
though set forth in full herein and in consideration of all the recitals, conditions and
agreements contained herein, the parties agree to amend the Agreement as follows:
1. Revision to Schedule of Performance. The Schedule of Performance set
forth in Section 5 of the Agreement shall be amended to read as follows:
5.1 Buyer’s Schedule of Performance. Subject to Force Majeure
Delays (as defined in Section 8.4) and Buyer and Seller’s closing conditions (as
set forth in Section 6.2 and 6.3), Buyer shall complete the following milestones in
furtherance of the Closing, in accordance with the following schedule:
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT –
201-219 GRAND AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA
Page 2 of 3
Deadline Milestone
(a) May 15, 2018
Buyer shall have completed 50% of the Construction
Drawings and submitted the Financial Proforma to
Seller
(b) July 14, 2018
Buyer shall have completed all Final Plans and
submitted 100% construction drawings to the City for
building permits, and submitted an Updated Proforma
to Seller
(c) November 12, 2018
August 13, 2018
Buyer shall have secured Construction Financing and
executed a contract with a general contractor for
demolition and construction of the Project in
accordance with the final plans
(d) December 21, 2018
Within 10 days
from satisfaction
of all
contingencies on
December 11, 2018,
i.e., by
September 12, 2018
Buyer and Seller shall have satisfied (or waived in
writing) all contingencies to Closing set forth in this
Agreement, and be prepared to Close Escrow
2. General Provisions. Each party has received independent legal advice
from its attorneys with respect to the advisability of executing this Second Amendment and
the meaning of the provisions hereof. The provisions of this Second Amendment shall be
construed as to the fair meaning and not for or against any party based upon any attribution
of such party as the sole source of the language in question. Except as expressly amended
pursuant to this Second Amendment, the terms and provisions of the Agreement shall
remain unmodified and shall continue in full force and effect, and Buyer and Seller hereby
ratify and affirm all their respective rights and obligations under the Agreement. Any
capitalized terms not defined herein shall have the meaning ascribed to them in the
Agreement. In the event of any conflict between this Second Amendment and the
Agreement, this Second Amendment shall govern. The terms and provisions of this Second
Amendment, together with the Agreement, shall constitute all of the terms and provisions
to which Buyer and Seller have agreed with respect to the transaction governed hereby,
and there are no other terms and provisions, oral or written, that apply to the Agreement
and/or the Property other than as set forth in the Agreement as modified by this Second
Amendment. The provisions of this Second Amendment shall apply to, be binding upon,
and inure to the benefit of the parties hereto and to their respective successors and assigns.
This Second Amendment may be executed in multiple counterparts, all of which shall
constitute an original, and all of which together shall constitute a single instrument.
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT –
201-219 GRAND AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA
Page 3 of 3
Counterparts of this Second Amendment executed and delivered by facsimile, email or
other means of electronic delivery shall constitute originals for all purposes.
IN WITNESS WHEREOF, the parties have executed this Second Amendment
as of the Effective Date.
BUYER:
ROEM Development Corporation,
a California corporation
By: _______________________
Name: Alex Sanchez
Its Executive Vice President
SELLER:
CITY OF SOUTH SAN FRANCISCO,
a municipal corporation
By: __________________________
Name: Charles Michael Futrell
Its City Manager
The Title Company has executed this Second Amendment to acknowledge its agreement
to act in accordance with the terms of this Second Amendment.
Chicago Title Insurance Company
By:
Name: Sherri Keller
Title: Escrow Officer
2985864.1
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT
This Second Amendment to Purchase and Sale Agreement (this “Second
Amendment”) is made effective as of _________, 2018 (“Effective Date”) by and
between CITY OF SOUTH SAN FRANCISCO, a municipal corporation (“Seller”) and
ROEM Development Corporation, a California Corporation (“Buyer”). Seller and Buyer
are sometimes individually referred to herein as a “party” and collectively as “the
parties.”
RECITALS
A. Seller and Buyer entered into that certain Purchase and Sale Agreement
dated November 14, 2017 (the “Agreement”) with respect to that certain real property
located at 418 Linden Avenue, South San Francisco, California (Assessor’s Parcel
Numbers 012-314-010) (the “Property”);
B. On March 28, 2018, Seller and Buyer entered into that certain First
Amendment to Purchase and Sale Agreement (“First Amendment”), whereby the parties
agreed to extend the deadlines within the Buyer’s Schedule of Performance as set forth in
Section 5 of the Agreement.
C. Seller and Buyer now desire to further amend certain provisions of the
Agreement, as amended by the First Amendment, as set forth herein (“Second
Amendment”).
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and incorporating all of the above as
though set forth in full herein and in consideration of all the recitals, conditions and
agreements contained herein, the parties agree to amend the Agreement as follows:
1. Revision to Schedule of Performance. The Schedule of Performance set
forth in Section 5 of the Agreement, as amended by the First Amendment, is amended to
read as follows:
5.1 Buyer’s Schedule of Performance. Subject to Force Majeure
Delays (as defined in Section 8.4) and Buyer and Seller’s closing conditions (as
set forth in Section 6.2 and 6.3), Buyer shall complete the following milestones in
furtherance of the Closing, in accordance with the following schedule:
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT –
418 LINDEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA
Page 2 of 3
Deadline Milestone
(a) May 15, 2018
Buyer shall have completed 50% of the Construction
Drawings and submitted the Financial Proforma to
Seller
(b) July 14, 2018
Buyer shall have completed all Final Plans and
submitted 100% construction drawings to the City for
building permits, and submitted an Updated Proforma
to Seller
(c) November 12, 2018
August 13, 2018
Buyer shall have secured Construction Financing and
executed a contract with a general contractor for
demolition and construction of the Project in
accordance with the final plans
(d) December 21, 2018
Within 10 days
from satisfaction
of all contingences
on December 11,
2018
September 12, 2018
Buyer and Seller shall have satisfied (or waived in
writing) all contingencies to Closing set forth in this
Agreement, and be prepared to Close Escrow
2. General Provisions. Each party has received independent legal advice
from its attorneys with respect to the advisability of executing this Second Amendment and
the meaning of the provisions hereof. The provisions of this Second Amendment shall be
construed as to the fair meaning and not for or against any party based upon any attribution
of such party as the sole source of the language in question. Except as expressly amended
pursuant to this Second Amendment, the terms and provisions of the Agreement shall
remain unmodified and shall continue in full force and effect, and Buyer and Seller hereby
ratify and affirm all their respective rights and obligations under the Agreement. Any
capitalized terms not defined herein shall have the meaning ascribed to them in the
Agreement. In the event of any conflict between this Second Amendment and the
Agreement, this Second Amendment shall govern. The terms and provisions of this Second
Amendment, together with the Agreement, shall constitute all of the terms and provisions
to which Buyer and Seller have agreed with respect to the transaction governed hereby,
and there are no other terms and provisions, oral or written, that apply to the Agreement
and/or the Property other than as set forth in the Agreement as modified by this Second
Amendment. The provisions of this Second Amendment shall apply to, be binding upon,
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT –
418 LINDEN AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA
Page 3 of 3
and inure to the benefit of the parties hereto and to their respective successors and assigns.
This Second Amendment may be executed in multiple counterparts, all of which shall
constitute an original, and all of which together shall constitute a single instrument.
Counterparts of this Second Amendment executed and delivered by facsimile, email or
other means of electronic delivery shall constitute originals for all purposes.
IN WITNESS WHEREOF, the parties have executed this Second Amendment
as of the Effective Date.
BUYER:
ROEM Development Corporation,
a California corporation
By: ______________________
Name: Alex Sanchez
Its Executive Vice President
SELLER:
CITY OF SOUTH SAN FRANCISCO,
a municipal corporation
By: __________________________
Name: Charles Michael Futrell
Its City Manager
The Title Company has executed this Second Amendment to acknowledge its agreement
to act in accordance with the terms of this Second Amendment.
Chicago Title Insurance Company
By:
Name: Sherri Keller
Title: Escrow Officer
2985846.1
City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #:18-699 Agenda Date:8/8/2018
Version:1 Item #:2.
Report regarding a resolution approving the first amendment to the Purchase and Sale Agreement between the
South San Francisco Successor Agency and SSF Miller Cypress Phase 2,LLC amending the supplemental
purchase price for 216 Miller Avenue (APN 012-314-220)to a fixed amount of $1,118,538 (Nell Selander,
Economic and Community Development Deputy Director).
RECOMMENDATION
It is recommended that the South San Francisco Successor Agency adopt a resolution approving the first
amendment to the Purchase and Sale Agreement between the South San Francisco Successor Agency and
SSF Miller Cypress Phase 2,LLC amending the supplemental purchase price for 216 Miller Avenue
(APN 012-314-220) to a fixed amount of $1,118,538.
BACKGROUND/DISCUSSION
In December 2016,Sares Regis Group of Northern California purchased six sites from the Successor Agency
(“Agency”)for $4,000,000.For Phase I of the project,two of the sites,Parcels A and D,were entitled for 260
market rate rental apartments, Parcel B was used as a parking lot, and Parcel C was entitled for 12 townhomes.
Under the original Purchase and Sale Agreement (PSA),it was contemplated that Parcel C (216 Miller Avenue)
could be part of a second phase of development,either as a 12-townhome project or as part of a larger land
assemblage.As a result,Parcel C was not included in the $4 million sale price in 2016.Currently,Sares Regis
has decided to proceed with the property assemblage, instead of the 12-townhome project.
Under the approved and executed PSA,an appraisal was required to determine the supplemental purchase price
of Parcel C. The relevant section of the PSA appears below.
2.3 Supplemental Purchase Price for Parcel C.If the Buyer constructs Parcel C (whether as (i)
a 12 unit town home development consistent with the Project Approvals (“12 Unit Project’)or (ii)as part
of a revised development under the potential Land Assembly Option defined in Section 5.6),the
additional land value payable to the Seller for Parcel C will be determined either by (X)a residual land
value appraisal for Parcel C or,at Seller’s discretion,(Y)on a comparison sales based appraisal both of
which will be prepared by a certified appraiser mutually selected by the Seller and Buyer within sixty
(60)days of the date Buyer provides written notice of either its intent to pursue the Revised Parcel C
Entitlements its intent to abandon the Revised Parcel C Entitlements and proceed with construction of
the 12 Unit Project (“Supplemental Purchase Price”).In the event that the parties do not agree on an
appraiser,the Seller shall identify three certified appraisers with experience appraising properties in San
Mateo County and each Party shall strike one appraiser and the remaining appraiser shall be retained to
conduct the appraisal.The costs of the appraisal shall be shared equally between the Seller and Buyer.
Buyer shall pay Seller the Supplemental Purchase Price prior to the earlier of ninety (90)days after
completion of the appraisal or issuance of the first building permit by the City for Parcel C.This
provision shall not apply if Buyer re-conveys Parcel C to Seller pursuant to Section 5.6(e)(v).
Appraisal and Price Offer
Pursuant to Section 2.3 of the PSA,the Agency and Sares Regis mutually selected Vathana Duong of ColliersCity of South San Francisco Printed on 8/2/2018Page 1 of 3
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File #:18-699 Agenda Date:8/8/2018
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Pursuant to Section 2.3 of the PSA,the Agency and Sares Regis mutually selected Vathana Duong of Colliers
International Valuation and Advisory Services to conduct the appraisal.The appraisal valued Parcel C at
$3,700,000.The appraisal methodology looked at comparable sales,as well as the residual land value of an
assumed 195-unit development (Sares Regis is currently pursuing entitlements for a 195-unit development on
the land assemblage that includes Parcel C)to determine an unentitled land value for the property.Finally,costs
associated with soil remediation and liquefiable soil abatement were deducted to arrive at a reconciled “as-is”
value.
Sares Regis has contested the appraised value of Parcel C.They outline their concerns in the attached Offer
Letter.Sares Regis has offered $1,118,538 for Parcel C,stating the cost of assembling the larger development
site affects their ability to offer more for the property and justifying their offer by estimating a price for the
property if sold as a stand-alone site.
The appraisal,in testing the value of Parcel C to determine its highest and best use,determined that if
developed alone,rather than as part of the larger land assemblage,Parcel C could accommodate just 49 units.
As part of the land assemblage,it can accommodate 72 units.Using the appraised,reconciled,“as-is”value of
Parcel C,$66,000,the loss in value of the stand-alone,rather than assembled site,is roughly $1.5 million (loss
in value =(72-49)x $66,000).Sares Regis further argues that there is a construction cost premium for
developing smaller sites,as efficiencies are lost.They estimate this cost,and associated loss in value,at $1.3
million. These calculations are summarized in Section 1 of the attached Offer Letter.
In a separate analysis of the stand-alone development option for Parcel C,staff determined the realistic price
offer the Agency could expect to receive would be approximately $1.5 million.This was determined by taking
the appraised residual land value of each unit,$57,928,multiplying it by the number of units that can feasibly
be built on the property,49,reducing the total amount by the cost of remediation,roughly $1.06 million,and
calculating the present value of the expected sale price (5% discount rate over three years).
Finally,staff evaluated the property tax implications over the next ten years of selling Parcel C to Sares Regis
for $1.1 million versus selling the property three years from now as a stand-alone site.If Sares Regis’offer is
accepted,the taxing entities could expect to begin receiving new,higher property taxes on the 195-unit
development three years from now.Whereas,going back out to bid,selecting a new developer,and proceeding
through the Exclusive Negotiating Right Agreement process to arrive at a Purchase and Sale Agreement,
followed by construction of the project,would delay new,property tax payments on the 49-unit development
until five years from now.Staff conservatively estimates that the property taxes the taxing entities could expect
to receive over the next ten years to be $7,805,274 if Parcel C is sold to Sares Regis and just $2,260,036 if it is
sold as a stand-alone site.
Although Sares Regis’$1,118,538 offer is below the $3,700,000 appraised value,it does result in a larger land
assemblage,resulting in higher property tax payments.Additionally,it allows the project to move forward,if
entitled,to begin construction in the near term.The alternative is proceeding through a lengthy disposition
process with a new developer,who may not be able to recreate the land assemblage necessary for a larger
development.Before the sale is finalized,the Oversight Board must also approve the final sales price.Staff
anticipates presenting the price offer to the Oversight Board at its September meeting,should the Successor
Agency approve it.
CONCLUSION
Sares Regis has provided a best and final price offer of $1,118,538,which is below the final appraised value of
$3,700,000.Because Sares Regis’offer allows for a larger development to move forward,which will produce
City of South San Francisco Printed on 8/2/2018Page 2 of 3
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File #:18-699 Agenda Date:8/8/2018
Version:1 Item #:2.
$3,700,000.Because Sares Regis’offer allows for a larger development to move forward,which will produce
more property tax revenue in the short and long term than selling Parcel C as a stand-alone development site,it
is recommended that the Successor Agency adopt a resolution approving the first amendment to the Purchase
and Sale Agreement with Miller/Cypress SSF,LLC amending the sale price of 216 Miller Avenue to
$1,118,538.
Attachments:
1.Sares Regis 216 Miller Offer Letter (July 26, 2018)
City of South San Francisco Printed on 8/2/2018Page 3 of 3
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SARES RECIS
July 26,20L8
VIA E-MAIL
South San Francisco Successor Agency
C/o Julie Barnard,
Economic and Community Development
City of South San Francisco
RE: Request to Amend Purchase and Sale Agreement Section 2.3 of the Former Ford
Properties/Vacant Miller Avenue Parking Lots Purchase And Sale Agreement (Supplemental
Purchase Price)
Dear Julie,
As you know, Sares-Regis Group of Northern California ("Sares Regis") is well under construction
on Cadence Phase t (260 apartment units), which is expected to be completed and open to new
residents in the first quarter of 2Ot9. The next phase of the overall project, Cadence Phase 2
("Project"), includes Parcel B (405 Cypress Ave) and Parcel C (21.6 Miller Ave) of the Former Ford
Properties as contemplated under the "Revised Parcel C Entitlements Application" defined in Section 5.6
of the Purchase and Sale Agreement and Joint Escrow lnstructions dated February 23,20L6 ("PSA'), as
well as three privately assembled parcels between those two sites addressed as 2O4,2O8, and 212/21,4
Miller Avenue.
Sares Regis closed on Parcel C in April 2017 (through its joint venture entity with the AFL-CIO
Building lnvestment Trust (BlT), SSF Miller Cypress Phase 2, LLC), submitted its planning applications in
December t2,2Ot7 and has been working diligently to assemble the remaining private properties
necessary for the L95-unit Cadence Phase 2 Project and complete the planning application. We
anticipate receiving the necessary entitlements from the City this fall, proceeding with pre-construction
planning, and commencing construction upon receipt of permits.
Under Section 2.3 of the PSA, the City and Sares Regis selected an appraiser to develop a
"Supplemental Purchase Price" for Parcel C, but as discussed, Section 2.3 does not provide a clear
process for us, as the buyer, to provide comments on or dispute the appraisal methodology, analysis or
conclusions. Although we provided a number of comments on the Appraisal, one comment clearly
impacts any valuation of a stand-alone project on Parcel C - the construction cost premium associated
with loss of efficiencies in scale when compared to the L95-unit assembled project which could range
from at least 5% and up T.o'J.O% of construction costs. As described below, the proposed purchase price
for Parcel C is based on a more appropriate stand-alone value of Parcel C, which will facilitate the
Cadence Phase 2 Project and result in a near term sales price distribution and substantial long-term
property tax increase benefiting the taxing entities, among other public benefits, as described below.
1. Proposed Supplemental Purchase Price
Now that the Appraisall has been completed, we request the Successor Agency amend Section
2.3 of the PSA to set a fixed Supplemental Purchase Price of 5L,LL8,538 to be paid in full at the issuance
of the first building permit for the Cadence Phase 2 Project.
As we have discussed, the Appraisal was based on a residual value analysis based on all the
Cadence Phase 2 properties, including the three properties that we have privately assembled. lt has
taken an extraordinary amount of effort and expense to assemble the other private properties under
binding contract. A stand-alone value, reduced by the required environmental remediation costs, is a
more appropriate approach to the Supplemental Purchase Price since that reflects more accurately the
circumstance if the property would be sold if it were to be returned to the Successor Agency for re-sale
on the open market, not taking into account the additional time delay, administrative costs and required
remediation this would require - or the reduced property tax benefits long term as described in Section
2, below.
As described in Appraisal, if Parcel C were to be developed on a stand-alone basis (maximum 49
units), the difference in value compared to the assembled property would be S1",5L8,0O0 (72 units - 49
units = 23 unit difference multiplied by the Appraisal per unit value of 566,000). And, as noted above,
there would be a construction cost premium of 5% to IO% if Parcel C were to be developed as smaller,
stand-alone project due to loss of efficiencies of scale. Based on our contractor's construction cost
estimates that have been shared with City staff and confirmed by the Appraisal, the average contractor
budget is $530,769 per unit for a L95 unit project, and adjusting for the loss of efficiency of a 49 unit
project (assuming lowest end 5% cost premium per unit or SZO,SO0/unit) for a total of 51,300,362.2
This value would then be reduced by required environmental remediation costs that relate only to
Parcel C. As confirmed by the Appraisal, the required remediation costs are estimated to range between
5825,000 to S1,250,000. After subtracting the lowest (most conservative) of this estimated range of
remediation costs (5825,000), the value of Parcel C is S1,LL8,538, calculated as follows:
Appraised Value of Parcel C
Assembled Property, Before Environmental
Remediation, minus
54,761,900
Appraised Value of 23 Unit Difference in
Stand Alone (49)vs Assembled Project (72)
@ 566,000 per Unit, minus
(51,518,0oo)
Construction Cost Adjustment Due to Loss of
Efficiency from L95 Unit Assemblage to 49
Unit Stand Alone Proiect (5%), minus
$r,300,962)
Required Environmental Remediation Costs,
equals
$82s,oool
Total Stand Alone Value of Parcel C s1,119,539
1 Colliers lnternational, Parcel C Appraisal Report, July 16, 2018.
2 S103,500,000/t9s = Ssao,z6g per unit x 0.05 = 526,538 per unit ¡ 49 = $1,300,362 cost premium
2. lncreased Property Tax Revenue Benefiting the Taxing Entities
The proposed 195-unit Cadence Phase 2 Project will substantially increase the real estate
property taxes for all of the assembled properties in the near term, not just Parcel C, over 46 times lrom
the 2018 tax year from 527,7O9 per year to more than 51,300,000 during the first year of operation.
Over the first ten years, this will generate over $15,000,000 of property tax revenue. By contrast, as
shown on the chart below, in the current vacant state, Parcel C will generate less than one half a million
dollars over 10 years, and a stand-alone (49 unit) residential project would less than four million in
property tax revenue, not taking into account any discount in the time delay that would be required to
market, entitle and build a stand-alone project.
s16,000,000.0
514,000,000.0
$12,ooo,ooo.o
s10,000,000.0
s8,000,000.0
s6,000,000.0
s4,000 000.0
s2,000,000.0
$-
Total 10 Year Real Estate Tax Revenue From Completed Community
çts,rzr,ot7.2
s3,889,803.s
s454,898.7
I Unimproved Tax Revenue I Proposed Apartment Commun¡ty I 216 Miller Ave. Developed Alone
3. Public Benefits of Cadence Phase 2 Project
The Cadence Phase 2 Project provides high quality and much needed housing within L/4 mile of
the relocated CalTrain station and near the Oyster Point employment hub, which helps the housing
needs of South San Francisco and the Bay Area. The Cadence Phase 2 Project also provides over
527,000,000 of community benefits to the area by implementing a Union Local Hire Program paying
area standard wages, providing public art, state of the art TDM measures and green building measures,
and streetscape enhancements and improved utilities that will catalyze other property redevelopment
activities that will also generate benefits to the taxing entities. The creation of 195 new high-quality
apartment homes within one block from the Linden Street and Grand Avenue corridor will provide the
businesses additional customers and increase the quality of business, tax generated by business and
promote additional development, all of which results in increases tax revenue.
We are very excited to proceed with this next phase of Cadence, and if you have any questions
or need additional information, please contact me at 415-250-5515 or [email protected]
Sincerely
@Ê
Ken Busch
Senior Vice President
City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #:18-700 Agenda Date:8/8/2018
Version:1 Item #:2a.
Resolution approving the first amendment to the Purchase and Sale Agreement between the South San
Francisco Successor Agency and SSF Miller Cypress Phase 2,LLC amending the supplemental purchase price
for 216 Miller Avenue (APN 012-314-220) to a fixed amount of $1,118,538.
WHEREAS,on June 29,2011,the Legislature of the State of California (“State”)adopted Assembly Bill x1 26
(“AB 26”),which amended provisions of the State’s Community Redevelopment Law (Health and Safety Code
sections 33000 et seq.)(“Dissolution Law”),pursuant to which the former Redevelopment Agency of the City
of South San Francisco (“City”) was dissolved on February 1, 2012; and
WHEREAS,the City elected to become the Successor Agency to the Redevelopment Agency of the City of
South San Francisco (“Successor Agency”); and
WHEREAS,pursuant to Health and Safety Code Section 34191.5(c)(2)(C),property shall not be transferred to
a successor agency,city,county or city and county,unless a Long Range Property Management Plan
(“LRPMP”)has been approved by the Oversight Board and the California Department of Finance (“DOF”);
and
WHEREAS,in accordance with the Dissolution Law,the Successor Agency prepared a 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 May 21,2015,and was approved by the DOF on October
1, 2015; and
WHEREAS,consistent with the Dissolution Law and the LRPMP,certain real properties located in the City of
South San Francisco,that were previously owned by the former Redevelopment Agency,were transferred to the
Successor Agency (“Agency Properties”); and
WHEREAS,on October 18,2016,the City entered into an Amended and Restated Master Agreement for
Taxing Entity Compensation (“Compensation Agreement”)with the various local agencies who receive shares
of property tax revenues from the former redevelopment project area (“Taxing Entities”),which provides that
upon approval by the Oversight Board of the sale price,and consistent with the LRPMP,the proceeds from the
sale of any of the Agency Properties will be distributed to the Taxing Entities in accordance with their
proportionate contributions to the Real Property Tax Trust Fund for the former Redevelopment Agency; and
WHEREAS,consistent with the LRPMP and the Oversight Board resolution,the Successor Agency and City
executed and recorded grant deeds transferring the Agency Properties to the City; and
WHEREAS,the Successor Agency was the owner of certain real property located in the City of South San
Francisco ("City"),California,known as County Assessor's Parcel Number 012-317-110 ("401 AirportCity of South San Francisco Printed on 8/31/2018Page 1 of 3
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File #:18-700 Agenda Date:8/8/2018
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Francisco ("City"),California,known as County Assessor's Parcel Number 012-317-110 ("401 Airport
Boulevard")and 012-317-100 ("411 Airport Boulevard")(collectively “Parcel A”),012-317-090 ("421 Airport
Boulevard"),012-314-100 ("405 Cypress Avenue")(collectively “Parcel B”),012-314-220 ("216 Miller
Avenue"or “Parcel C”),012-318-080 ("315 Airport Boulevard"or “Parcel D”)and collectively referred to as
the "Properties"; and,
WHEREAS,on February 10,2016,the Agency adopted Resolution number 03-2016 approving the Purchase
and Sale Agreement (“PSA”)with Miller Cypress SSF,LLC (“Developer”)for the acquisition and development
of the Properties; and
WHEREAS, the PSA was executed and became effective on February 23, 2016; and
WHEREAS, the Properties were conveyed to the Developer on December 12, 2016; and
WHEREAS,on February 10,2016,entitlements were approved by the City Council for 260 market rate rental
apartments on two assembled sites,Parcel A and D,a parking lot on Parcel B,and 12 townhomes on Parcel C;
and
WHEREAS,the Developer purchased six sites,comprising Parcel A,B,C and D,from the Successor
Agency/City of South San Francisco (“City”) for $4,000,000; and
WHEREAS,pursuant to the terms of the PSA,Parcel C was transferred to Developer,but was not included in
the $4,000,000 sale price; and
WHEREAS,Developer has indicated it is pursuing the Land Assembly Option,as contemplated in the PSA;
and
WHEREAS,the appraisal,dated July 3,2018,valued Parcel C at $3,700,000 as part of a larger development;
and
WHEREAS,due to increases in construction costs,the cost to assemble neighboring properties for the
development,and slow growth in rental revenues Developer has informed the Successor Agency that it is
unable to pay the appraised value and has requested and amendment to the PSA to set a fixed supplemental
purchase price of $1,118,538 for Parcel C; and
WHEREAS,upon issuance of a building permit for Phase 2 of the Cadence project,the taxing entities will
receive sale proceeds consistent with the Compensation Agreement; and
WHEREAS,pursuant to the terms of the Compensation Agreement,the Oversight Board must approve the final
sale price.
NOW,THEREFORE,BE IT RESOLVED that the South San Francisco Successor Agency does hereby resolve
as follows:
1.The foregoing recitals are true and correct and made a part of this Resolution.
2.The proposed actions in this Resolution are consistent with the Long Range Property Management Plan.
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File #:18-700 Agenda Date:8/8/2018
Version:1 Item #:2a.
3.Subject to approval by the Oversight Board,the First Amendment to the Purchase and Sale Agreement,
amending the supplemental purchase price for 216 Miller Avenue (APN 012-314-220)to a fixed amount
of $1,118,538,a draft of which is attached hereto as Exhibit A and incorporated herein,is hereby
approved.
4.The Executive Director,or his designee,is authorized to execute the First Amendment to the Purchase
and Sale Agreement,a draft of which is attached hereto as Exhibit A and incorporated herein,subject to
minor amendments that do not materially increase the Successor Agency’s obligations.
5.The Executive Direction or authorized to execute any necessary documents related to the First
Amendment to the Purchase and Sale Agreement.
6.The Executive Director,or his designee,is authorized take any and all other actions necessary to
implement this intent of this Resolution, subject to approval as to form by Agency Counsel.
*****
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FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
This First Amendment to the Purchase and Sale Agreement and Joint Escrow
Instructions (this “First Amendment”) is made effective as of _________________,
2018 (“Effective Date”) by and between the South San Francisco Successor Agency, a
public agency (“Seller” or “Agency”) and SSF Miller Cypress Phase 2, LLC(“Buyer”),
successor-in-interest to Miller Cypress SSF, LLC, which is the date this Agreement was
approved by the South San Francisco Oversight Board ("Oversight Board"). Seller and
Buyer are each individually referred to herein as a “Party ” and, collectively, as the
“Parties.”
RECITALS
A. WHEREAS, Seller and Miller Cypress SSF, LLC entered into that certain
Purchase and Sale Agreement dated August 23, 2016 (the “Agreement”) with respect to
that certain real property located at known as County Assessor’s Parcel Numbers 012-
317-110 (401 Airport Boulevard)(“Parcel A.1”), 012-317-100 (411 Airport Boulevard)
(“Parcel A.2”), 012-317-090 (421 Airport Boulevard) (“Parcel A.3”), 012-318-030 (315
Airport Boulevard) (“Parcel D”), 012-314-100 (405 Cypress Avenue) “(Parcel B”), and
012-314-220 (216 Miller Avenue parking lot) (“Parcel C”). Parcel A.1, Parcel A.2 and
Parcel A.3 are collectively, “Parcel A.” Parcel A, Parcel B, Parcel C, and Parcel D are
collectively the “Property.”
B. WHEREAS, the Agreement was approved by the Oversight Board by
Resolution 4-2016 which also authorized the transfer of the property to the City of South
San Francisco (“City”) for subsequent conveyance to Miller Cypress SSF, LLC pursuant
to the terms of the Agreement.
C. WHEREAS, Miller Cypress SSF, LLC subsequently assigned its interest
and obligations under the Agreement and the related development agreement to Miller
Cypress PRI, LLC.
D. WHEREAS, at a joint meeting of the City Council and the Agency held on
November 30, 2016, the City Council and the Agency approved, by motion, a
Memorandum of Understanding between the City and the Agency whereby the Agency
agreed to convey the Property to the City as part of the Close of Escrow as set forth in
Section 5 of the Agreement and the City agreed that it would subsequently convey the
Property to SSF Miller Cypress PRI, LLC pursuant to the terms and at the times set forth
in the Agreement as part of the Close of Escrow.
E. WHEREAS, the Agency and City entered into a grant deed to convey the
Property to the City as part of the Close of Escrow as set forth in Section 5 of the
Agreement solely for the purpose of allowing the City to thereafter convey the applicable
Property to SSF Miller Cypress PRI, LLC pursuant to the terms and at the times set forth
in the Agreement.
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT –
401 AIRPORT BLVD, 411 AIRPORT BLVD, 421 AIRPORT BLVD, 315 AIRPORT BLVD, 405 CYPRESS AVE AND 216
MILLER AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA
Page 2 of 4
F. WHEREAS, SSF Miller Cypress PRI LLC changed its name to BIT SSF
Miller Cypress, LLC.
G. WHEREAS, BIT SSF Miller Cypress, LLC subsequently assigned its
interest and obligations under the Agreement and the related development agreement to
Buyer for the portion of the Property known as Parcel C (also known as 216 Miller
Avenue).
H. WHEREAS, pursuant to the grant deed between the Successor Agency
and the City, the Parties agree that the City conveyed the property in accordance with the
above-described Memorandum of Understanding and did not assume any obligations or
liabilities of the Agency as set forth in the Agreement and that such obligations and
liabilities remain the obligations and liabilities of the Agency.
I. WHEREAS, Buyer has notified the City and the Agency of its intent to
pursue the Land Assembly Option, as defined in Section 5.6 of the Agreement.
J. Seller and Buyer now desire to amend certain provisions of the
Agreement, as set forth herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and incorporating all of the above as
though set forth in full herein and in consideration of all the recitals, conditions and
agreements contained herein, the parties agree to amend the Agreement as follows:
1. Section 2.3 of the Agreement is hereby deleted in its entirety and replaced
with the following:
2.3 Supplemental Purchase Price for Parcel C. If the Buyer constructs
Parcel C (whether as (i) a 12-unit town home development consistent with the
Project Approvals (“12 Unit Project”) or (ii) as part of a revised development
under the potential Land Assembly Option defined in Section 5.6 (“Cadence
Phase 2 Project”)), Buyer shall pay Seller a fixed Supplemental Purchase Price
of One Million One Hundred Eighteen Thousand Five Hundred Thirty-Eight
Dollars ($1,118,538) (the “Supplemental Purchase Price”), which amount shall
be paid in full at the issuance of the first building permit for the Cadence Phase 2
Project. the additional land value payable to the Seller for Parcel C shall be One
Million Dollars will be determined either by (X) a residual land value appraisal
for Parcel C or, at Seller’s discretion, (Y) on a comparison sales based appraisal
both of which will be prepared by a certified appraiser mutually selected by the
Seller and Buyer within sixty (60) days of the date Buyer provides written notice
of either its intent to pursue the Revised Parcel C Entitlements its intent to
abandon the Revised Parcel C Entitlements and proceed with construction of the
12 Unit Project (“Supplemental Purchase Price”). In the event that the parties
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT –
401 AIRPORT BLVD, 411 AIRPORT BLVD, 421 AIRPORT BLVD, 315 AIRPORT BLVD, 405 CYPRESS AVE AND 216
MILLER AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA
Page 3 of 4
do not agree on an appraiser, the Seller shall identify three certified appraisers
with experience appraising properties in San Mateo County and each Party shall
strike one appraiser and the remaining appraiser shall be retained to conduct the
appraisal. The costs of the appraisal shall be shared equally between the Seller
and Buyer. Buyer shall pay Seller the Supplemental Purchase Price prior to the
earlier of ninety (90) days after completion of the appraisal or issuance of the first
building permit by the City for Parcel C. This provision shall not apply if Buyer
re-conveys Parcel C to Seller pursuant to Section 5.6(e)(v).
2. General Provisions. Each party hereto has received independent legal
advice from its attorneys with respect to the advisability of executing this First Amendment
and the meaning of the provisions hereof. The provisions of this First Amendment shall
be construed as to the fair meaning and not for or against any party based upon any
attribution of such party as the sole source of the language in question. Except as expressly
amended pursuant to this First Amendment, the terms and provisions of the Agreement
shall remain unmodified and shall continue in full force and effect, and Buyer and Seller
hereby ratify and affirm all their respective rights and obligations under the Agreement.
Any capitalized terms not defined herein shall have the meaning ascribed to them in the
Agreement. In the event of any conflict between this First Amendment and the Agreement,
this First Amendment shall govern. The terms and provisions of this First Amendment,
together with the Agreement, shall constitute all of the terms and provisions to which Buyer
and Seller have agreed with respect to the transaction governed hereby, and there are no
other terms and provisions, oral or written, that apply to the Agreement and/or the Property
other than as set forth in the Agreement as modified by this First Amendment. The
provisions of this First Amendment shall apply to, be binding upon, and inure to the benefit
of the parties hereto and to their respective successors and assigns. This First Amendment
may be executed in multiple counterparts, all of which shall constitute an original, and all
of which together shall constitute a single instrument. Counterparts of this First
Amendment executed and delivered by facsimile, email or other means of electronic
delivery shall constitute originals for all purposes.
IN WITNESS WHEREOF, the parties have executed this First Amendment as
of the Effective Date.
SIGNATURES ON FOLLOWING PAGES.
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT –
401 AIRPORT BLVD, 411 AIRPORT BLVD, 421 AIRPORT BLVD, 315 AIRPORT BLVD, 405 CYPRESS AVE AND 216
MILLER AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA
Page 4 of 4
SELLER
SOUTH SAN FRANCISCO SUCCESSOR AGENCY
By: _______________________________
Mike Futrell
Executive Director
ATTEST:
By: _______________________________
Agency Clerk
APPROVED AS TO FORM:
By: _______________________________
Jason Rosenberg
Agency Counsel
BUYER:
SSF MILLER CYPRESS PHASE 2, LLC
a Delaware limited liability company
By: SRGNC MF Miller Cypress Phase 2, LLC,
a Delaware limited liability company
Sole Member
By: SRGNC MF, LLC
a Delaware limited liability company
Sole Member
By:
Mark R. Kroll
President