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HomeMy WebLinkAbout2006-03-08 e-packet ~~t\ ~4' ." (!; ~ 10 ~ ... ~ rt ".J _ (;) /;" ,"",'I': 1lJ1.'OB.~: SP]~CIAL MI~ETING CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 Meeting to be held at MUNICIPAL SERVICES BUILDING CITY COUNCIL COMMUNITY ROOM 33 ARROYO DRIVE WEDNESDAY, MARCH 8, 2006 6:00 P.M. NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of California, the City Council of the City of South San Francisco will hold a Special Meeting on Wednesday, the 8th day of March, 2006, at 6:00 p.m., iin the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Purpose of the meeting: 1. Call to Order 2. Roll Call 3. Public Comments - comments are limited to items on the Special Meeting Agenda 4. Review FY 2006-07 Budget 5. Closed Session: Pursuant to Government Code section 54957.6, conference with labor negotiator, Elaine Yamani, for all units 6. Adjournment Isl Sylvia M. Payne City Clerk - ~'\\l s~ (~5~ ~ ~ v 0 '<11f21''''~ Staff Report SP. A GENDA ITEM #4 DATE: March 8,2006 TO: Honorable Mayor and City Council FROM: Jim Steele, Director of Finance SUBJECT: PRELIMINARY OVERVIEW OF 2006-07 GENERAL FUND BUDGET RECOMMENDA TION: It is recommended that the City Council give staff direction to prepare a General Fund operating budget for 2006-07 that holds the line on new programs and services, except for the addition of three police officE~rs. BACKGROUNDIDISCUSSION: The contents of this staff report have been discussed with the Budget Subcommittee on February 7th and February 22nd. The Subcommittee, consisting of Mayor Femekes and Councilmember Matusumoto, reviewed staff's budget overview and concurred with staff's recommendation to prepare a hold the line budget, with the exceptions listed below. Council concurrence is now sought prior to staff preparing a 20106-07 budget and budget document for Council review. A preliminary General Fund projection is attached to this staff report, as are copies of other materials given to the Budget Subcommittee. It should be emphasized that revenue estimates are still preliminary and that health premium rates are not available until later in the Spring. While numbers will change between now and the time the actual budget is brought to Council, staff believes the changes will be relatively modest, barring some unforeseen event. Recommended 2006-07 Budget Strategy If a hold the line budgetl is submitted to the Council for 2006-07, preliminary estimates are that it would result in a surplus of $4010-500,000, prior to any capital expenditures. However, two budget increases are recommended, to restore three frozen police officer positions, and to shift a position back to the General Fund from the Stormwater Fund. When adjusting for those recommended changes, the budget is balanced with a modest surplus. 1 A hold the line budget means one in which no new services, programs, or positions are added. Staff Report Subject: Proposed 2006-07 Budget Strategy Page 2 of 3 Police Department Funding The Budget Subcommittee concurred with the City Manager's recommendation that the Council consider augmentation of Police Department staffing for 2006-07. In 2004-05, three vacant police officer positions were frozen. Those officers would be an important priority to add back, because the Department is actuaHy down eleven positions: the three frozen positions, three officers assigned to county task forces (for which we are reimbursed), three other self-imposed positions left open to stay within the overtime budget, and two officers who are in Iraq. The Department has tried to bridge this loss of personnel by reassigning a school resource officer to patrol and utilizing the motor officers as part of the minimum staffing numbers (having them work a beat rather than just traffic), and not filling other specialized positions. These reassignments have impacted Police Department contacts with the schools where gang intelligence gathering and traffic enforcement has suffered. Overall calls for service have increased, and gang activity is also on the rise. Based on all the activity in the County, our officers have done an excellent job in keeping the gangs in check and meeting the other needs of the community. However, the service is becoming more reactive than proactive. For all of these reasons, it is recommended that funding be restored for three frozen Police Officer positions at a cost of $392,000. The preliminary budget attached to this staff report contains funding for the three officers. Stormwater Fund Of concern over the next 1- 2 years is the financial health of the Stormwater Enterprise Fund, as it is depleting its financial reserv(~s. The Stormwater Fund's annual costs are higher than the revenue generated by the countywide property tax assessment. Staff projects with this frozen revenue source and rising staffing costs, the Stormwater Fund will deplete its reserves sometime during 2007-08. In addition, except for the Lindenville improvements to be funded by the Redevelopment bond sale, the current Stormwater Fund revenue stream only contains funding for ongoing operations and maintenance costs. That is, the revenue does not contain sufficient funding for ongoing capital rehabilitation and replacement program for our storm drain infrastructure, except for small repairs. Historically, the City has funded modest annual storm water capital improvements ($25,000 - $50,000) out of Gas Tax funding from the State, funds which could otherwise go to road improvements. In the next 1- 2 years, staff projects that some steps will need to be taken to bring Stormwater expenses into alignment with revenues. This will require a staffing reduction, a shifting of expenses to the General Fund, new fees/revenue, or some combination of these changes. Staff will continue to discuss this situation with the Budget Subcommittee and bring back any recommendations to the full Council in 2007-08. Staff Report Subject: Proposed 2006-07 Budget Strategy Page 3 of 3 Staff recommends for the 2006-07 budget that a fund shift adopted in 2005-06 of .25 FTE from the General Fund to the Stormwater Fund be discontinued. This will only result in a modest savings, but one that the General Fund can absorb ($25,,000). The preliminary budget figures presented to Council assume this shift back to the General Fund already. Capital Budget Funding As was presented in the Midyear Budget Review on February 15th, staff recommends spending extra Educational Reform Augmentation Fund (ERAF) refund dollars received from the County in 2005-06 on capital improvement needs in 2006-07. Due to uncertainty over the ongoing stability of this source of revenue, it is appropriate to budget conservatively for an ERAF refund, and use any extra dollars on the next year's capital budget. Therefore, staff recommends bringing back a General Funded capital program of approximately $1.0 million for 2006-07. Priority will be given to projects that protect the City's investment in its existing infrastructure, with an emphasis likely to be placed on street improvements. FISCAL IMPACT: Revenue numbers are still in the preliminary stage of review, but at this point, staff projects that a balanced operating budget can be achieved for 2006-07 while adding dollars to restore 3 frozen police officer positions and shifting .25 FTE back to the General Fund from the Stormwater Fund. Preliminary estimates are that the General Fund Undesignated Reserve will end the 2006- 07 year at approximately $4.9 million. Prepared by: ~ Jim teele Fin nce Director Attachment: General Fund Summary and Reserves Projection for 2006-07 Copy of Additional Materials Requested by Budget Subcommittee JSIBN:ed to o ~ M - o Ul ctl c: o :;:; CJ al '0' ... a.. Q;I'- .g'9 ::I to aJg "CC"Il c: ::I U. ca ... al c: al Cl >- ... ctl c: E Qj ... a.. "C-I'- alalo _ Ol I CJ"Cto al::lO 'O'aJ ~ ... a.. 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Q) Z Total General Fund Operating and Capital Budget, & Projected Changes to General Fund RI!SerVes Preliminary 2006-07 Projection at 3/8/06 Adopted Amended Proiected Proiected Year End Budget Budget Budget Budget 2004-05 2005-06 2005-06 2005-06 2006-07 Net Operating Budget Impact (from Table I) 803,432 $ (335,750) $ 815,917 $ 2,678,323 $ 60,576 Less Transfers to Capital Projects: (338,493) (82,000) (803,330) (803,330) (1,000,000) Less Transfers to Debt Service (136,154) (130,000) (130,000) (130,000) (130,000) Plus (Minus) One-Time Transactions: Plus Favorable Resolution of Genentech Property Tax Settlement: Plus (Minus) Favorable (Unfavorable) Reduction in funds set aside for legal settlement: Net Impact on General Fund Reserves 328,785 (547,750) (117,413) 1,744,993 (1,069,424) 'General Fund Reserves Projection ::J I. Discretionary Reserves! Liquid Reserves Available Emergencies 1,100,000 1,-100,000 1,100,000 1,100.000 1,141,000 Economic Contingencies 3,500,000 3,1300,000 3,800,000 3,840,000 3,995,000 Designated for future Economic Development and Capital Projects 3,600,000 3,EJOO,000 3,600,000 4,620,000 3,620,000 Undesignated Reserve 4,128,893 ~l96.673 3,663.863 5,179,416 4,913.992 II. Non-Discretionary Reserves! Reserves Already Committed Encumbrances 381 ,400 371.816 Advances to Other Funds Inventory and Other 40,300 90,000 90,000 40,000 40,000 Appropriated Capital Projects 283,830 291,330 Subtotal, Non Discretionary (Committed) Reserves 705,530 90,000 753,146 40,000 40,000 Total General Fund Reserves 13,034,423 12,486,673 12,917,009 14,n9,416 13,709,992 CrJy OF SoUTH SAN FRANCISco FINANCE DEPARTMENT Memo To: Council Budget Subcommittee, Mayor Fernekes and Councilmember Matsumoto From: Jim Steele, Finance Director Date: February 17, 2006, Revised for Full Council on February 27, 2006 Re: Responses to Requests for More Information on Budget Items At the February 8 subcommittee meeting on the budget, several questions were asked. This memo transmits the responses back to the subcommittee in preparation for our follow-up meeting on February 22 at 5:30 at the MSB. l. How much has the City been receiving from the special motor vehicle fee assessed in San Mateo County, and what have the funds been used for? The City has gotten $59,800 in these funds annually over the past two years, and has used the dollars to help pay for the City's share of congestion relief funds due to C/CAG. Our annual assessment to C/CAG have been $169,400, funded as: follows: Funds Paid for C/CAG Programs: Motor Vehic1e Assessment General Fund Gas Tax Funds from State $ 59,800 $ 19,400 $ 90,200 Total Payments to C/CAG: $ 169,400 2. How much have the departments been spending on overtime this year? Please provide the information by month. That information is shown in Attachment A. 3. Please provide a breakdown of business- to-business sales tax categories that can be attributable to the office development east of 101. Sales taxes are not reported by building type, nor are they aggregated into the geographical categories of East of 101 vs. "West of 101, but staff has provided an estimate in Attachment Busing data aggregated by our sales tax consultants, MBIA, from the computer files that the State Board of Equalization provides. Memo to Budget Subcommittee Follow-up Questions for February 22 Meeting Page 2 of2 4. Please provide a breakdown on the new BLS ambulance revenue and costs, with more detail on the expenses. Also provide information on the cost of the additional ambulance bay. That information is shown in Attachment C. Please feel free to call me at 877-8509 or email [email protected] you have any questions before our meeting Wed.D.esday night. Attachments >: c ell co -=:r N M CD ..... CD O'l Ol ,..... CD c. l- N CO M 0 ,... CD -=:r It) CO ,... CD i::- I- >- ~ CD CO CO 0 COft N V (0 ..... ::> 0 ..... a;- M u; a;- ..... 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"0 .E c 0 0 .8 .E: Q) 11l .0 ro '" .c: Q) l.. ~ Q; ;: "C E ~ III :5 Q; c: - <tl C3 .c E .c CO ~ l:l E g '5 Ql "5 Q) E "C 3: Q) c: cr - E :5 15. Q) Q) Q) ~ c u Q) .E :0 -'" ::l en Q) Q) Q) "S; I/) 0 ~ C/) ell 0 Q) Ol C) ,:,::: (,) ell '5 en ai :: ~ Q) e ... - .8 0- t: ::; .2 Ol ] c: .;: 0 0 ~ Q) .c c: CIl 3: > .s en E E "5 'S en Q) CIl ... Q; ::J t:: .~ ll.. 'en E e ... .~ CIl ~ 0 <tl "0 ::l E UJ Ql c. en '0, Ql ..... ::E Q) c: -'" E :1: :c u:: Q) ro <tl c: :;: e E Q) en Cl 11l '2: l.. W CIl ::s E c E -c: ~ en ~ ..r::: 'E Q) - UJ c.. 'E 0 ti u:: I- > .... M - 0 J:: I- ~ Q) '2: u:: 0 '" Q) '0 C) - C'I) a<S ... U (.) > ::J u "0 :5 0 .5 - Q) :>. !i:i 0 0 0 ~ Q) Q) - a. J:: Q) ~ .c ..r::: en N Q) ... cI:l (5 I/) <( ~ ::l U. e - .5:! U .... f! I- ~ iii Q) C/) u:: 0 0 "0 CO c Q) " 0 (.) 0 15 CJ) .... .... ...J U. Q; U. .c u (J) ~ .... 0 .c CIl - ::l ...J 0 0 u. Q) > .E Q) :s: <t .c: c:J en c.. u:: a. ::i c: .5 CJ) u.. I- Z l- N 0 C'i Attachment B Sales Tax for the Year Ended. September 30, 2005 (most recent quarter for whic:h data is available): ($ in OOO's) Est. for Office & Office R&D Only East of 101 ** Business to Business Categories: Office and Electronic Equipment Chemical ProductsIBiotech * All Other $ $ $ 100 675 10 Total Business to Business Salles Tax: for East of 101 Office and Office R&D (est): $ 785 * Medical sales are not taxable. Many biotech companies pay use tax when they purchase expensive lab equipment from out of state vendors. Use tax receipts vary widely quarter to quarter with equipment purchases, and the figure above includes recent high quarter for large equipment purchase ** Sales tax data not reported by building type. Figures above are therefore estimates. Attachment C BLS (Program 11611) Preliminary Revenues vs. Expenditures -- FY 05-06 Adopted BudQet Year-ta-date (12-31-05) Year-to-date (1-31-06) Fiscal Year Proiection Revenues BLS Transport 773,200 96,962 155,045 421,419 Expenditures Employee Costs (1) 254,800 106,029 125,994 216,500 Operating Supplies 30,000 7,201 10,656 18,180 Debt Service 20,148 10,051 10,051 20,148 for BLS ambulance Total Operating Expenditures 304,948 123,281 146,701 254,828 Revenues in excess of Operating Expenditures 468,252 (26,319) 8,344 166,591 Debt Service on BLS bay (2) at new fire station 20,468 20,468 20,468 20,468 Revenues in Excess of Operating and Capital Expenditures: 447,784 (46,787) (12,124) 146,123 Notes: 1. Contract employees 2. Ambulance Bay Cost = $332,000. Debt service will be paid over 30 years. Paid from RDA funds. AGENDA REDEVELOPMENT AGENCY CITY OF SOUTH SAN FRANCISCO REGULAR MEETING MUNICIPAL SERVICE BUILDING COMMUNITY ROOM WEDNESDAY, MARCH 8, 2006 7:00 P.M. PEOPLE OF SOUTH SAN FRANCISCO You are invited to offer your suggestions. In order that you may know our method of conducting Agency business, we proceed as follows: The regular meetings of the Redevelopment Agency are held on the second and fourth Wednesday of each month at 7:00 p.m. in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Public Comment: For those wishing to address the Board on any Agenda or non-Agendized item, please complete a Speaker Card located at the entrance to the Community Room and submit it to the Clerk. Please be sure to indicate the Agenda Item # you wish to address or the topic of your public comment. California law prevents Redevelopment Agency from taking action on any item not on the Agenda (except in emergency circumstances). Your question or problem may be referred to staff for investigation and/or action where appropriate or the matter may be placed on a future Agenda for more comprehensive action or a report. When your name is called, please come to the podium, state your name and address for the Minutes. COMMENTS ARE LIMITED TO THREE (3) MINUTES PER SPEAKER. Thank you for your cooperation. The Clerk will read successively the items of business appearing on the Agenda. As she completes reading an item, it will be ready for Board action. JOSEPH A. FERNEKES Chair RICHARD A. GARBARINO, SR. Vice Chair MARK N. ADDIEGO Boardmember PEDRO GONZALEZ Boardmember KARYL MATSUMOTO Boardmember RICHARD BATTAGLIA Investment Officer SYLVIA M. PAYNE Clerk BARRY M. NAGEL Executive Director STEVEN T. MATT AS Counsel PLEASE SILENCE CELL PHONES AND PAGERS HEARING ASSISTANCE EQUlPMENT IS AVAILABLE FOR USE BY THE HEARING-IMPAIRED AT REDEVELOPMENT AGENCY MEETINGS CALL TO ORDER ROLL CALL AGENDA REVIEW PUBLIC COMMENTS CONSENT CALENDAR 1. Motion to approve the minutes of February 22,2006 2. Motion to confirm expense claims of March 8,2006 ADMINISTRATIVE BUSINESS 3. Resolution authorizing the execution ofa purchase and sale agreement with San Francisco Public Utilities Commission for property located on Mission Road (APNs: 093-3l2-050 and 060) CLOSED SESSION 4. Pursuant to Government Code Section 54956.8 real property negotiations related to 80 Chestnut Avenue (California Water Service); Agency Negotiator: Assistant Director Van Duyn ADJOURNMENT REGULAR REDEVELOPJv1ENT AGENCY MEETING AGENDA MARCH 8, 2006 PAGE 2 - ~'t\\ s~ S 10 n >- ~ ~ <") v c C'41.IFO'F-~\.~ RDA AGENDA ITEM #3 Redevelopment Agency Staff Report DATE: TO: FROM: SUBJECT: March 8, 2006 Redevelopment Agency Board Marty VanDuyn, Assistant Executive Director SAN FRANCISCO PUBLIC UTILITIES COMMISSION RIGHT OF WAY: RESOLUTION AUTHORIZING A PURCHASE AND SALE AGREEMENT FOR SIX PARCELS, TOTALING 21.30 ACRES, ON SAN FRANCISCO PUBLIC UTILITIES COMMISSION RIGHT OF WAY, ADJACENT TO THE BART / SFO EXTENSION RIGHT OF WAY RECOMMENDATION: It is recommended that the Redev1elopment Agency Board adopt the attached resolution authorizing the Agency Director to eJ.ecute the subject Purchase and Sale Agreement, the Grant Deed and the escrow instructions on behalf of the Redevelopment Agency. BACKGROUND: On February 18, 2004, the San Francisco Public Utilities Commission (SFPUC) notified the City of South San Francisco of the availability of an 7.6 acre site located north of the intersection ofEl Camino Real and Chestnut Avenue, currently under the jurisdiction of the SFPUC, in accordance with California Government Code Section 54220 et seq. City staff requested that the SFPUC give the first priority to the City of South San Francisco and enter into good faith negotiations to determine a mutually satisfactory sale price for the subject site, in accordance with the California Government Code. In subsequent discussions, the SFPUC and City staff agreed to expand the proposed purchase area to include all SFPUC properties adjacent to the existing BART right-of-way and within the City of South San Francisco boundaries. The proposed property comprises six parcels totaling 21.30 acres. A majority of the propert lies within the El Camino Corridor Redevelopment. Property Description The City is interested in acquiring six parcels, totaling 21.30 acres, along the 2.1 mile SFPUC right-of- way in the City of South San Francisco to compliment development of the approved Linear Park and bike path and create a land use plan for parcels located north of Chestnut A venue. The existing assessor parcel numbers (APN) for the subject parcels are APN 093-331-040, 093-312-050 & 093-312-060. The proposed purchase property encompasses six parcels, which are shown in Attachment 3 and described as follows: Staff Report To: Redevelopment Agency Board RE: San Francisco Public Utilities Commission Right-Of-Way: Purchase and Sale Agreement Date: March 8, 2006 Page 2 of 4 Specific Purchase Parcels Parcell: Parcel 2: Parcel 3: Parcel 4: Parcel 5: Parcel 6: The parcel comprises a '7.6-acre area located at the northernmost part the proposed purchase area, west of Mission Road and bisected by Colma Creek. The 1.8 acre parcel extends from Colma Creek to Chestnut Avenue. This parcel is located between property owned by Kaiser Medical Center and the BART right of way. The narrow OA-acre parcel is located along EI Camino Real, between property owned by Kaiser Medical Center and Chestnut Avenue. Parcel 3 is currently owned by the Petrocchi Trust. The SFPUC will exchange this parcel for Parcel 7, identified below, and included as part of the purchase property to South San Francisco. The long 3.7-acre parcel is located on the west side of the BART/SFO Extension right- of-way and runs from Orange A venue, at the southern boundary, to 12 Mile Creek, at the northern boundary. The long 6.7-acre parcel is located on the west side of the BART/SFO Extension right- of-way and runs from Spruce A venue, at the southern boundary, to Orange A venue, at the northern boundary. A rectangular 1.1-acre parcel that is located on the west side of the BART/SFO Extension right-of-way lmd faces Spruce Avenue. Non-Purchase Parcel Parcel 7: The SFPUC currently owns a 0.9-acre parcel south of Chestnut Avenue, but it is not included in the purchase area. The SFPUC parcel will exchange this parcel for Parcel 3, identified above. The City and the SFPUC have prepared appraisals for the subject purchase property and negotiated a fair market value of$22 million. The SFPUC staff is recommending the proposed sale and agreed to the proposed terms. Over the next few months, the SFPUC staffwill submit the proposed purchase to the Public Utilities Commission and the San Francisco Board of Supervisors for approval. DISCUSSION: The proposed purchase area plays an important role as a conduit for the development of the Linear Park and bikeway from San Bruno to the South San Francisco BART Station. The area north of Chestnut Avenue contains several oddly-shaped parcels and the area has been used for a wide range oftemporary uses (such as overflow parking for Ron Price Motors) during the construction of the BART/SFO Staff Report To: Redevelopment Agency Board RE: San Francisco Public Utilities Commission Right-Of-Way: Purchase and Sale Agreement Date: March 8, 2006 Page 3 of 4 Extension. The 1999 South San Francisco General Plan calls for an extension of Oak Avenue to relieve congestion on Chestnut Avenue. In addition, the City recently approved the concept plans for a City Linear Park/bikeway traversing the entire distance through the city. The proposed use on the majority of the right-of-way is designated for construction of the City Linear Park and bike path, which is an open space and for recreational use. On the parcels north of Chestnut Avenue, the City will prepare a planning document that will specify the locations for a mix of appropriate uses consistent with the City's General Plan. Fiscal Impact The project will be funded through Red(;:velopment Agency sources, including a portion of the low and moderate housing funds and the sale of Tax Allocation Bonds available this year; as authorized by the City Council/Redevelopment Agency on February 22, 2006. General Plan Consistency Report On February 16,2005, the Planning Commission accepted a General Plan Consistency Report stating that the proposed sale is consistent with the South San Francisco General Plan and the South San Francisco Municipal Code. The 21.30-acre purchase area is located along a 2.t-mile right-of-way that includes "Commercial", "High Density Residential" and "Open Space" land use designations. The "Commercial" designation provides for a wide range of uses including retail stores, eating and drinking establishments, commercial recreation, entertainment ,establishments and theaters, financial, business and personal services, hotels, educational and social services and government offices. The "High Density" designation permits residential development up to 30-units per acre. The "Open Space" designation permits park and recreational uses. Additionally, the following policy in the General Plan supports enhancement of the connections between downtown and residential neighborhoods with the BART/SFO Extension right-of-way and the South San Francisco BART Station: Guiding Policy 3.1-G-4 "Enhance linkages between Downtown and transit centers, and increase street connectivity with the surrounding neighborhoods." Guiding Policy 3. 4-G-2 "Encourage development of a mix of uses, with pockets of concentrated activity that provide foci and identity to the different parts of El Camino Real." Implementing Policy 4.3 -1-7 "Undertake a program to improve pedestrian connections between the rail stations - South San Francisco and San Bruno BART stations and the Caltrain Station - and the surroundings. . . .." Staff Report To: Redevelopment Agency Board RE: San Francisco Public Utilities Commission Right-Of-Way: Purchase and Sale Agreement Date: March 8, 2006 Page 4 of 4 Implementing Policy 5.1-1-6" Work with Bay Area Rapid Transit (BART), Pacific Gas and Electric (PG&E), and the SFPUC to lease and de:velop linear parks on existing public utility and transportation right-of-way in the city, where appropriate and feasible." CONCLUSION: Purchase of the 21.30-acre area would facilitate development of the City Linear Park and bikepath, encourage the creation of a mixed-use planning area north of Chestnut Avenue and facilitate the Oak Avenue extension. The City and the SFPUC have each prepared appraisals to establish the fair market value of the property, to which the seller has agreed. Consequently, staff recommends that the Redevelopment Agency Board adopt the attached resolution to authorize the Redevelopment Agency Director to execute the Purchase and Sale agreement. BY:l~~"IL._.._~ Assistant Director Approved: , ATTACHMENTS: I. Draft Resolution 2. Agreement 3. Property Description RESOLUTION NO REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNlA A RESOLUTION APPROVING A PURCHASE AND SALE AGREEMENT FOR THE SALE OF UNIMPROVED PROPERTY FROM THE CITY AND COUNTY OF SAN FRANCISCO PUBLIC UITLITIES COMMISSION TO THE CITY OF SOUTH SAN FRANCISCO, A Mill\TICIP AL CORPORATION WHEREAS, the City and County of San Francisco owns a certain unimproved 21.30 acre area, consisting of six pareels, of real property located in South San Francisco, east of the BART SFO Extension right-of-way, more particularly described in Exhibit A, which is incorporated by reference and attached hereto; and WHEREAS, the City and C01mty of San Francisco desires to sell the property and the City of South San Francisco desires to purchase the unimproved real property; WHEREAS, the Redevelopment Agency of the City of South San Francisco desires to acquire the property to facilitate development and construction of public benefits within the El Camino Redev1elopment Project area; WHEREAS, the Redevelopment Agency has obtained an appraisal of the property which indicates the property has a fair market value of $22 Million; and WHEREAS, the Redevelopment Agency and the City and County of San Francisco have mutually agreed to a purchase price of $22 Million for the unimproved real property. NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of South San Francisco that it hereby approves the purchase of the 21.30-acre property from the City and County of San Francisco and authorizes the Agency Director to execute the Purchase and Sale Agreement, the Grant Deed and the escrow instructions on behalf of the Redevelopment Agency. * * * * * 809704-1 I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Redevelopment Agency of the City of South San Francisco at a meeting held on the day of , 2006 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk J:\ WPD\MNRSW\405\OO 1 \RES0\2000\April\Saleofproperty.doc 809704-1 !; , , , 1- (0) I ~ .2 , " .1 ~ .r:: " ~ ! en I .- ! "8 8.1 t ~ Q. ~ ~ s o !! () .t::. t'CI.::> ~ ill I' fr: g ~ C/'J 1l i ~ E - " 11 ~ ~ ~I. ~ ,.. - '" ~ ~ :: cnl-~ ir-rrr""" . l: \ I: \i \1 \ ! \~, \ \}i)' ~ " \\/ \A\\@ \ i\'\,'" " \\. \ \1\ , \,. \ \. 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(APN No. AGREEMENT FOR SALE OF REAL ESTATE , and portiones) of APN Nos. and South San Francisco, San Mateo County) THIS AGREEMENT FOR SALE OF REAL ESTATE (this "Agreement") dated for reference purposes only as of , 2005 is by and between the CITY AND COUNTY OF SAN FRANCISCO, a municipal corporation ("City" or "Seller"), and the CITY OF SOUTH SAN FRANCISCO, a municipal corporation ("Buyer"). THIS AGREEMENT IS MADE WITH REFERENCE TO THE FOLLOWING FACTS AND CIRCUMSTANCES: A. City owns the Property located in the City of South San Francisco, County of San Mateo, described in Section 1 below and more particularly described as Parcels on Exhibit A attached hereto and incorporated herein by reference. B. The Public Utilities Commission ("PUC") has recommended sale of the Property pursuant to Resolution No. 04- dated , 2004. C. City issued a request for proposals/qualifications dated February 13,2004 ("RFP") for the sale of the Property and provided notice thereof to local public entities in accordance with California Government Code Sections 54200 et seq. D. Buyer responded to City's notice, and City and Buyer have negotiated a price to purchase the Property pursuant to California Government Code Section 54220, and that price equals the full appraised value of the Property. E. City and Buyer acknowledge that prior to the Closing Date, City plans to acquire from Charles Petrocchi the property located at 1100 El Camino Real, South San Francisco ("Petrocchi Parcel"), more particularly described as Parcel_ on Exhibit A attached hereto, which if acquired, will then be included in the Property to be sold to Buyer. F. Buyer desires to purchase the Property and City is willing to sell the Property, subject to approval by City's Board of Supervisors and Mayor, on the terms and conditions set forth hereinbelow. ACCORDINGLY, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Buyer hereby agree as follows: 1. SALE AND PURCHASE 1.1 Property Included in Sale Subject to the terms, covenants and conditions set forth herein, City agrees to sell to Buyer, and Buyer agrees to purchase from City, City's interest in the real property located at South San Francisco, State of California, and more particularly described in - 1 - Exhibit A attached hereto (the "Property"), as shown generally on the map attached hereto as Exhibit A-I. The Property includes the following components: (i) approximately 8.7 acres which the City formerly operated as a driving range, along with adjoining land (the "Driving Range Parcels"); (ii) the approximately 12,632 square foot Petrocchi Parcel; and (iii) acres which the City formerly used a municipal railroad right-of-way ("Right of Way Parcels"). In the event the City does not acquire the Petrocchi Parcel, this Agreement will remain in full force in effect, provided the Property will only include the Driving Range Parcels and the Right of Way Parcels and the Purchase Price will be adjusted pursuant to Section 2(c). 2. PURCHASE PRICE The purchase price for the Property is Twenty-Two Million Dollars ($22,000,000), subject to adjustment pursuant to the terms of Section 2(c) and Section 2(d) (the "Purchase Price"). Buyer shall pay the Purchase Price as follows: (a) On or before the later of five (5) days after the date that it is the later of: (i) the Effective Date, or (ii) Buyer's transmittal of the Contingency Period Waiver Notice, Buyer shall deposit in escrow with (the "Title Company"), the sum of Eleven Million Dollars ($11,000,000) as an earnest money deposit (the "Deposit"). Once Buyer places the Deposit with Title Company, Five Million Dollars ($5,000,000) of the Deposit (the "Liquidated Damages Amount") shall be non-refundable and, at the election of City, either immediately transmitted to City or held by Title Company in an interest-bearing account for the benefit of City, and the remaining Six Million Dollars ($6,000,000) of the Deposit (the "Remaining Deposit") shall be held by the Title Company in an interest-bearing account for the benefit of the City. At the Closing (as defined below) the Deposit (but not interest accrued thereon) shall be credited against the Purchase Price. (b) Buyer shall pay the balance of the Purchase Price (subject to adjustment pursuant to the terms of Section 2(c) and Section 2(d)) to City at the consummation of the purchase and sale contemplated hereunder (the "Closing"). All. sums payable hereunder induding, without limitation, the Deposit, shall be paid in immediately available funds oflawful money ofthe United States of America (c) In the event the City does not acquire the Petrocchi Parcel, this Agreement will remain in full force in effect, provided the Property will only include the Driving Range Parcels and the Right of Way Parcels, and provided further that the Purchase Price shall be subject to adjustment as follows: Reduce the Purchase Price by $520,000 to a total Purchase Price of $21,480,000. (d) If the Closing has not occurred within seventy-five (75) days after the Effective Date ("Purchase Price Adjustment Date"), the Purchase Price shall be increased by adding the following to the Purchase Price: the product of (i) _ % (constituting the daily interest rate) multiplied by the number of days from the Purchase Price Adjustment Date to the Closing date; multiplied by (ii) the difference between the current Purchase Price and the Deposit (e.g., $22 million + (L (days) x %_.] x [$22 million - $11 million])). [The Daily Interest rate will be the Condemnation Interest Rate used by CCSF - to be inserted] -2- 'I' 3. TITLE 3.1 Conditions of Title At the Closing, City shall quitclaim interest in and to the Property to Buyer by quitclaim deed in the form of Exhibit C attached hereto (the "Deed"). Title to the Property shall be subject to (a) liens of local real estate taxes and assessments, (b) all existing exceptions and encumbrances, whether or not disclosed by a current preliminary title report or the public records or any other documents reviewed by Buyer pursuant to Section 5.1 hereof, and any other exceptions to title which would be disclosed by an accurate and thorough investigation, survey, or inspection of the Property, (c) all items of which Buyer has actual or constructive notice or knowledge, and all of the foregoing exc.eptions to title shall be referred to collectively as the "Conditions of Title." . Without limiting the foregoing, Buyer acknowledges receipt of a preliminary report issued by the Title Company under Order No. , dated , covering the Property and approves all of the exceptions contained therein. 3.2 Buyer's Responsibility for Title Insurance Buyer understands and agrees that the right, title and interest in the Property shall not exceed that vested in City, and City is under no obligation to furnish any policy of title insurance in connection with this transaction. Buyer recognizes that any fences or other physical monument of the Property's boundary lines may not correspond to the legal description of the Property. City shall not be responsible for any discrepancies in the parcel area or location of the property lines or any other matters which an accurate surveyor inspection might reveaL It is Buyer's sole responsibility to obtain a survey from an independent surveyor and a policy oftitle insurance from a title company, if desired. 4. "AS IS" PURCHASE; RELEASE OF CITY 4.1 Buyer's Independent Investigation Buyer represents and warrants to City that Buyer has performed a diligent and thorough inspection and investigation of each and every aspect of the Property, either independently or through agents of Buyer's choosing, induding, without limitation, the following matters (collectively, the "Property Conditions"): (a) All matters relating to title including, without limitation, the existence, quality, nature and adequacy of City's interest in the Property and the existence of physically open and legally sufficient access to the Property. (b) The zoning and other legal status of the Property, including, without limitation, the compliance of the Property or its operation with the Subdivision Map Act and any other applicable codes, laws, regulations, statutes, ordinances and private or public covenants, conditions and restrictions, and all governmental and other legal requirements such as taxes, assessments, use permit requirements and building and fire codes. -3- (c) The quality, nature, adequacy and physical condition of the Property, including, but not limited to, the structural elements, foundation, roof, interior, landscaping, parking facilities, and the electrical, mechanical, HV AC, plumbing, sewage and utility systems, facilities and appliance, and all other physical and functional aspects of the Property. (d) The quality, nature, adequacy, and physical, geological and environmental condition of the Property (including soils and any groundwater), and the presence or absence of any Hazardous Materials in, on, under or about the Property or any other real property in the vicinity of the Property. As used in this Agreement, "Hazardous Material" shall mean any material that, because of its quantity, concentration or physical or chemical characteristics, is now or hereafter deemed by any federal, state or local governmental authority to pose a present or potential hazard to human health or safety or to the environment. (e) The suitability of the Property for Buyer's intended uses. (t) The economics and development potential, if any, of the Property. (g) Buyer acknowledges that City has disclosed that neither the Right of Way Parcels, nor the Petrocchi Parcel are separate legal parcels and that City has represented that it is exempt from the Subdivision Map Act. 4.2 Hazardous Substance Disclosure California law requires sellers to disclose to buyers the presence or potential presence of certain Hazardous Materials. Accordingly, Buyer is hereby advised that occupation of the Property may lead to exposure to Hazardous Materials such as, but not limited to, gasoline, diesel and other vehicle fluids, vehicle exhaust, office maintenance fluids, tobacco smoke, methane and building materials containing chemicals, such as formaldehyde. Buyer acknowledges that City has disclosed the matters relating to the Property referred to in Schedule 1 attached hereto. Nothing contained in such schedule shall limit any of the provisions of this Article or relieve Buyer of its obligations to conduct a diligent inquiry hereunder, nor shall any such matters limit any of the provisions of Section 4.4 ["As Is" Purchase] or Section 4.5 [Release of City]. 4.3 Entry and Indemnity In connection with any entry by Buyer or its Agents onto the Property, Buyer shall give City reasonable advance written notice of such entry and shall conduct such entry and any inspections in connection therewith so as to minimize, to the extent possible, interference with uses being made of the Property and otherwise in a manner and on terms and conditions acceptable to City. All entries by Buyer or its Agents onto the Property to perform any testing or other investigations which could affect the physical condition of the Property (including, without limitation, soil borings) or the uses thereofwill be made only pursuant to the terms and conditions of a permit to enter in form and substance satisfactory to City substantially in the form of City's standard permit. Without limiting the foregoing, prior to any entry to perform any on- site testing, Buyer shall give City written notice thereof, including the identity of the company or persons who will perform such testing, the precise time and location of the testing, and the proposed scope of the testing. City shall have the right to approve, disapprove, or condition and -4- limit the proposed testing, in City's sole discretion, within ten (10) business days after receipt of such notice. If Buyer or its agents, employees or contractors take any sample from the Property in connection with any approved testing, Buyer shall provide to City a portion of such sample being tested to allow City, if it so chooses, to perform its own testing. City or its representative may be present to observe any testing or other inspection performed on the Property. Buyer shall promptly deliver to City copies of any reports relating to any testing or other inspection of the Property performed by Buyer or its agents, employees or contractors, but shall not deliver copies of any such reports to any other person or entity without Buyer's prior written approval. Buyer shall keep all test results and information strictly confidential, and shall indemnify, reimburse, defend and hold City harmless from and against any loss, cost, expense, or damage resulting from Buyer's failure to keep any information obtained from an inspection or testing of the Property strictly confidential; provided, however, Buyer shall not be liable if and to the extent Buyer is required to disclose such information pursuant to a court order. Buyer shall comply with all laws, ordinances, rules, regulations, orders and the like in connection with any entry onto or testing of the Property. Buyer shall maintain, and shall require that its Agents maintain, public liability and property damage insurance in amounts and in form and substance adequate to insure against all liability of Buyer and its Agents, arising out of any entry or inspection of the Property in connection with the transaction contemplated hereby, and Buyer shall provide City with evidence of such insurance coverage upon request from City. To the fullest extent permitted under law, Buyer shall indemnify, defend and hold harmless City, its Agents, and each of them, from and against any liabilities, costs, damages, losses, liens, claims and expenses (including, without limitation, reasonable fees of attorneys, experts and consultants and related costs) arising out of or relating to any entry on, under or about the Property by Buyer, its Agents, contractors and subcontractors in performing the inspections, testings or inquiries provided for in this Agreement, whether prior to the date of this Agreement or during the term hereof, including, without limitation, any injuries or deaths to any persons (including, without limitation, Buyer's Agents) and damage to any property, from any cause whatsoever. The foregoing indemnity shall survive beyond the Closing, or, if the sale is not consummated, beyond the termination of this Agreement. 4.4 "As Is" Purchase BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT CITY IS SELLING AND BUYER IS PURCHASING CITY'S INTEREST IN THE PROPERTY ON AN "AS IS WITH ALL F AUL TS" BASIS. BUYER IS RELYING SOLELY ON ITS INDEPENDENT INVESTIGATION AND NOT ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM CITY OR ITS AGENTS AS TO ANY MATTERS CONCERNING THE PROPERTY, ITS SUITABILITY FOR BUYER'S INTENDED USES OR ANY OF THE PROPERTY CONDITIONS. CITY DOES NOT GUARANTEE THE LEGAL, PHYSICAL, GEOLOGICAL, ENVIRONMENTAL OR OTHER CONDITIONS OF THE PROPERTY, NOR DOES IT ASSUME ANY RESPONSIBILITY FOR THE COMPLIANCE OF THE PROPERTY OR ITS USE WITH ANY STATUTE, ORDINANCE OR REGULATION. IT IS BUYER'S SOLE RESPONSIBILITY TO DETERMINE ALL BUILDING, PLANNING, ZONING AND OTHER -5- REGULATIONS RELATING TO THE PROPERTY AND THE USES TO WHICH IT MAY BE PUT. 4.5 Release of City As part of its agreement to purchase the Property in its "As Is With All Faults" condition, Buyer, on behalf of itself and its successors and assigns, waives any right to recover from, and forever releases and discharges, City, its officers, employees, agents, contractors and representatives, and their respective heirs, successors, legal representatives and assigns, from any and all demands, claims, legal or administrative proceedings, losses, liabilities, damages, penalties, fines, liens, judgments, costs or expenses whatsoever (including, without limitation, attorneys' fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, that may arise on account of or in any way be connected with (i) Buyer's and its Agents and customer's past, present and future use of the Property, (ii) the physical, geological or environmental condition ofthe Property, including, without limitation, any Hazardous Material in, on, under, above or about the Property, and (iii) any federal, state, local or administrative law, rule, regulation, order or requirement applicable thereto, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA", also commonly known as the "Superfund" law), as amended by Superfund Amendments and Reauthorization Act of 1986 ("SARA") (42 U.S.C. Sections 9601-9657), the Resource Conservation and Recovery Act of 1976, as amended by the Solid Waste and Disposal Act of 1984 (collectively, "RCRA") (42 U.S.c. Sections 6901-6987), the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977 (collectively the "Clean Water Act") (33 U.S.C. Section 1251 et seq.), the Toxic Substances Control Act ("TSCA") (15 U.S.c. Sections 2601-2629), Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et seq.), the Carpenter-Presley- Tanner Hazardous Substance Account Law (commonly known as the "California Superfund" law) (California Health and Safety Code Sections 25300-25395), Hazardous Waste Control Act (California Health and Safety Code Section 25100 et seq.), Hazardous Materials Release Response Plans and Inventory Law (commonly known as the "Business Plan Law") (California Health and Safety Code Section 25500 et seq.), Porter- Cologne Water Quality Control Act (California Water Code Section 13000 et seq.), Safe Drinking Water and Toxic Enforcement Act of 1986 (commonly known as "Proposition 65") (California Health and Safety Code Section 25249.5 et seq.). In connection with the foregoing release, Buyer expressly waives the benefits of Section 1542 of the California Civil Code, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN IDS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM OR HER MUST HAVE MATERIALLY AFFECTED IDS OR HER SETTLEMENT WITH THE DEBTOR. BY PLACING ITS INITIALS BELOW, BUYER SPECIFICALLY ACKNOWLEDGES AND CONFIRMS THE VALIDITY OF THE RELEASES MADE ABOVE AND THE FACT THAT BUYER WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT -6- THE TIME TillS AGREEMENT WAS MADE, THE CONSEQUENCES OF THE ABOVE RELEASES. INITIALS: BUYER: 5. CONDITIONS PRECEDENT 5.1 Buyer's Conditions Precedent Buyer's obligation to purchase the Property is conditioned upon the following (collectively, "Buyer's Conditions"): (a) Buyer's review and approval of an updated preliminary title report, together with copies of the underlying documents, and a current survey in sufficient detail to support the issuance of the Title Policy as provided in Section 3.2 (the "Survey"). The Survey shall include a field note description properly certified to Buyer and the Title Company. Buyer shall provide a copy of the Survey to the City upon Buyer's receipt thereof. (b) Buyer's review and approval of all tenant leases and any other occupancy agreements (hereinafter collectively referred to as the "Leases"), if any, affecting the Property. (c) Buyer's review and approval of the physical condition of the Property. (d) Buyer issuing bond financing necessary to purchase the Property. 5.2 Contingency Period Buyer shall have until 5:00 p.m. San Francisco Time on the date that is sixty (60) business days after the Effective Date to review and approve or waive Buyer's Conditions (such period being referred to herein as the "Contingency Period"). If Buyer elects to proceed with the purchase of the Property, then Buyer shall, before the expiration of the Contingency Period, notify City in writing that Buyer has approved all such matters ("Contingency Period Waiver Notice"). Ifbefore the end of the Contingency Period Buyer fails to give City the written Contingency Period Waiver Notice and fails to object to any of Buyer' s Conditions, then Buyer shall be deemed to have waived Buyer's Conditions. Notwithstanding the foregoing, if Buyer objects to any of the matters contained within Section 5.1 within the Contingency Period, then City may, but shall have no obligation to remove or remedy any objectionable matter. If City agrees to remove or remedy the objectionable matter, it shall notify Buyer within ten (10) days following Buyer's notice of objection, and the Closing Date shall be delayed for so long as City diligently pursues such removal or remedy. If and when City elects not to remove or remedy the objectionable matter, which City may do at any time including following an initial election to pursue remedial or corrective actions, this Agreement shall automatically terminate, the Deposit shall be returned to Buyer, and neither party shall have any further rights or obligations hereunder except as provided in Sections 4.3 [Entry and Indemnity], 8.2 [Brokers], or 9.4 [Authority of Buyer] or as otherwise expressly provided herein. Notwithstanding the foregoing, City and Buyer agree to reasonably cooperate with Buyer's efforts, if any, to cause the recordation of a parcel map to separate the Property from any -7- adjacent property reserved by City or through a lot line adjustment. Any such recordation or process shall be initiated, if at all, by Buyer and at Buyer's sole cost. 5.3 City's Condition Precedent The following are conditions precedent to City's obligation to sell the Property to Buyer ("City's Conditions Precedent"): (a) Buyer shall have performed all of its obligations hereunder and all of Buyer's representations and warranties shall be true and correct. (b) A resolution approving and authorizing the transactions contemplated hereby and finding that the public interest or necessity demands, or will not be inconvenienced by the sale of the Property, shall have been adopted by the City's Board of Supervisors and Mayor, in their respective sole and absolute discretion, and dilly enacted on or before (c) City's satisfaction or waiver of the requirement to obtain from the City of South San Francisco approval to subdivide the applicable portions of the Property (in the form of a Parcel Map, Parcel Map Waiver or by other means) to create legal lots on the Property separate from the adjacent property which will continue to be owned by City; provided, however, this condition shall be solely for City's benefit. 5.4 Failure of City's Conditions Precedent Each of City's Conditions Precedent are intended solely for the benefit of City. If any of City's Conditions Precedent are not satisfied as provided above, City may, at its option, terminate this Agreement. Upon any such termination, neither party shall have any further rights or obligations hereunder except as provided in Sections 4.3 [Entry and Indemnity], 8.2 [Brokers], or 10.4 [Authority of Buyer] or as otherwise expressly provided herein. 6. ESCROW AND CLOSING 6.1 Escrow Within ten (10) days after the parties hereto execute this Agreement, Buyer and City shall deposit an executed counterpart of this Agreement with the Title Company, and this instrument shall serve as the instructions to the Title Company as the escrow holder for consummation of the purchase and sale contemplated hereby. City and Buyer agree to execute such supplementary escrow instructions as may be appropriate to enable the Title Company to comply with the terms of this Agreement; provided, however, in the event of any conflict between the provisions of this Agreement and any supplementary escrow instructions, the terms of this Agreement shall control. 6.2 Closing Date The Closing hereunder shall be held, and delivery of all items to be made at the Closing under the terms of this Agreement shall be made, at the offices of the Title Company on: (a) the -8- T date which is the later of thirty (30) days after: (i) the expiration of the Contingency Period and enactment of the Board of Supervisor's resolution referred to in Section 5.3(b) above, or if such date is not a business day, then upon the next ensuing business day, before 1:00 p.m. San Francisco time or (ii) Buyer issues bond financing necessary to purchase the Property or (b) such earlier date and time as Buyer and City may mutually agree upon in writing (the "Closing Date"). Notwithstanding anything to the contrary contained herein, in no event shall the Closing Date be later than three hundred sixty-five (365) days after the date this Agreement is executed by the parties. Such date and time may not be extended without the prior written approval of both City and Buyer. 6.3 Deposit of Documents items: (a) At or before the Closing, City shall deposit into escrow the following (i) the duly executed and acknowledged Deed conveying the Real Property to Buyer subject to the Conditions of Title; (ll) a duly executed counterpart of the Bill of Sale covering the Personal Property, in the form attached hereto as Exhibit D; and (ill) four (4) duly executed counterparts of an Assignment and Assumption of Leases in the form attached hereto as Exhibit E (the "Assignment of Leases"). items: (b) At or before the Closing, Buyer shall deposit into escrow the following (i) the funds necessary to close this transaction; (ll) a duly executed counterpart of the Bill of Sale; and (ill) four (4) duly executed counterparts of the Assignment of Leases. (c) City and Buyer shall each deposit such other instruments as are reasonably required by the Title Company or otherwise required to close the escrow and consummate the purchase of the Property in accordance with the terms hereof. (d) City shall deliver to Buyer originals (or to the extent originals are not available, copies) of the Leases, and copies of the tenant correspondence files) for the three (3) most recent years of City's ownership of the Property only), and originals (or to the extent originals are not available, copies) of any other items which City is required to furnish Buyer copies of or make available at the Property pursuant to Section 2 above, within five (5) business days after the Closing Date. City shall deliver to Buyer a set of keys to the Property on the Closing Date. 6.4 Prorations -9- T Rents, including, without limitation, percentage rents, if any, and any additional charges and expenses payable under the Leases, all as and when actually collected (whether such collection occurs before, on or after the Closing Date); any real property taxes and assessments; water, sewer and utility charges; amounts payable under any service contracts; annual permits and/or inspection fees (calculated on the basis of the period covered); and any other expenses normal to the operation and maintenance of the Property, together with tenant improvement costs, leasing commissions and free rent, shall all be prorated as of 12:01 a.m. on the date the Deed is recorded, on the basis of a three hundred sixty-five (365)-day year. Any delinquent rents collected after the Closing shall be paid immediately to City. Buyer shall use all reasonable efforts to collect such delinquent rents; provided, however, City reserves its right to sue a tenant under its Lease for damages suffered by City as a result of such tenant's failure to pay any rents to City which were payable prior to the Closing Date so long as such a suit does not seek a termination of such tenant's Lease. The amount of any security deposits received by City and not applied against tenants' obligations under the Leases shall be credited against the Purchase Price. The Purchase Price shall be increased by the amount of any utility deposits paid by City with respect to the Property. City and Buyer hereby agree that if any of the above described prorations cannot be calculated accurately on the Closing Date, then the same shall be calculated as soon as reasonably practicable after the Closing Date and either party owing the other party a sum of money based on such subsequent proration(s) shall promptly pay said sum to the other party . 7. RISK OF LOSS 7.1 Loss City shall give Buyer notice of the occurrence of damage or destruction of, or the commencement of condemnation proceedings affecting, any portion of the Property. In the event that all or any portion of the Property is condemned, or destroyed or damaged by fire or other casualty prior to the Closing, then Buyer may, at its option to be exercised within ten (10) days of City's notice of the occurrence of the damage or destruction or the commencement of condemnation proceedings, either terminate this Agreement or consummate the purchase for the full Purchase Price as required by the terms hereof. If Buyer elects to terminate this Agreement or fails to give City notice within such ten (1 D)-day period that Buyer will proceed with the purchase, then this Agreement shall terminate at the end of such ten (1 D)-day period, the Title Company shall return the Deposit to Buyer, and neither party shall have any further rights or obligations hereunder except as provided in Sections 4.3 [Entry and Indemnity], 8.2 [Brokers], or otherwise expressly provided herein. 7.2 Self Insurance Notwithstanding anything to the contrary above, Buyer acknowledges that City self- insures and shall not be obligated to purchase any third party comprehensive liability insurance or property insurance. 8. EXPENSES 8.1 Expenses -10- T Buyer shall pay any transfer taxes applicable to the sale, personal property taxes, escrow fees, title premiums, survey fees, and recording charges and any other costs and charges of the escrow for the sale, except City shall reimburse Buyer for 50% of survey, engineering and mapping work by City related to the transaction contemplated in this Agreement up to a maximum amount of $50,000. 8.2 Brokers The parties represent and warrant to each other that no broker or finder was instrumental in arranging or bringing about this transaction and that there are no claims or rights for brokerage commissions or finder's fees in connection with the transactions contemplated by this Agreement. If any person brings a claim for a commission or finder's fee based on any contact, dealings, or communication with Buyer or City, then the party through whom such person makes a claim shall defend the other party from such claim, and shall indemnify the indemnified party from, and hold the indemnified party against, any and all costs, damages, claims, liabilities, or expenses (including, without limitation, reasonable attorneys' fees and disbursements) that the indemnified party incurs in defending against the claim. The provisions of this Section shall survive the Closing, or, if the purchase and sale is not consummated for any reason, any termination of this Agreement. 9. LIQUIDATED DAMAGES IF THE SALE OF THE PROPERTY IS NOT CONSUMMATED DUE TO THE CITY'S DEFAULT HEREUNDER AND BUYER IS NOT THEN IN DEFAULT, THEN THE TITLE COMP ANY SHALL RETURN THE DEPOSIT THEREON TO BUYER. IF THE SALE IS NOT CONSUMMATED DUE TO ANY DEF AUL T BY BUYER HEREUNDER AND CITY IS NOT THEN IN DEF AUL T, THEN THE TITLE COMPANY SHALL DELIVER THE LIQUIDATED DAMAGES AMOUNT (AS DEFINED IN SECTION 2(a) ABOVE) TOGETHER WITH ACCRUED INTEREST THEREON TO CITY (OR THE CITY MAY RETAIN THE DEPOSIT IF ALREADY DELIVERED TO CITY), AND CITY SHALL BE ENTITLED TO RETAIN SUCH SUM AS LIQUIDATED DAMAGES; AND THE TITLE COMP ANY SHALL RETURN THE REMAINING DEPOSIT (AS DEFINED IN SECTION 2(a) ABOVE) TO BUYER. THE PARTIES HA VB AGREED THAT CITY'S ACTUAL DAMAGES, IN THE EVENT OF A FAILURE TO CONSUMMATE THIS SALE AS SPECIFIED IN THE PRECEDING SENTENCE, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE.. AFTER NEGOTIATION, THE P ARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE LIQUIDATED DAMAGES AMOUNT TOGETHER WITH ACCRUED INTEREST THEREON IS A REASONABLE ESTIMATE OF THE DAMAGES THAT CITY WOULD INCUR IN SUCH AN EVENT. BY PLACING THEIR RESPECTIVE INITIALS BELOW, EACH P ARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION. INITIALS: CITY: BUYER: -11- T 10. GENERAL PROVISIONS 10.1 Notices Any notices required or permitted to be given under this Agreement shall be in writing and shall be delivered (a) in person, (b) by certified mail, postage prepaid, return receipt requested, or (c) by U.S. Express Mail or commercial overnight courier that guarantees next day delivery and provides a receipt, and such notices shall be addressed as follows: CITY: BUYER: Real Estate Division City and County of San Francisco 25 Van Ness Avenue, Suite 400 San Francisco, CA 94102 Attn: Director of Property South San Francisco Redevelopment Agency 400 Grand Avenue South San Francisco, CA 94080 Attn: Executive Director with a copy to: Hazel M. Brandt Deputy City Attorney Office of the City Attorney City Hall, Room 234 1 Dr. Carlton B. Goodlett Place San Francisco, CA 94102 with a copy to: Steven T. Mattas Meyers Nave 555 12th Street Suite 1500 Oakland, CA 94607 or such other address as either party may from time to time specify in writing to the other party. Any notice shall be deemed given when actually delivered if such delivery is in person, two (2) days after deposit with the U.S. Postal Service if such delivery is by certified or registered mail, and the next business day after deposit with the U.S. Postal Service or with the commercial overnight courier service if such delivery is by overnight mail. 10.2 Successors and Assigns This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors, heirs, legal representatives, administrators and assigns. Buyer's rights and obligations hereunder shall not be assignable without the prior written consent of City; provided, however, even if City approves any such proposed assignment, in no event shall Buyer be released of any of its obligations hereunder. 10.3 Amendments -12- 'I'" This Agreement may be amended or modified only by a written instrument signed by the Buyer and City. 10.4 Authority of Buyer Buyer represents and warrants to City that this Agreement and all documents executed by Buyer which are to be delivered to City at Closing: (a) are or at the time of Closing will be duly authorized, executed and delivered by Buyer; (b) are or at the time of Closing will be legal, valid and binding obligations of Buyer; and (c) do not and at the time of Closing will not violate any provision of any agreement or judicial order to which Buyer is a party or to which Buyer is subject. Notwithstanding anything to the contrary in this Agreement, the foregoing representations and warranties and any and all other representations and warranties of Buyer contained herein or in other agreements or documents executed by Buyer in connection herewith, shall survive the Closing Date. 10.5 Buyer's Representations and Warranties Buyer makes the following representations as of the date of this Agreement and at all times throughout this Agreement: (a) Buyer has duly authorized by all necessary action the execution, delivery and performance of this Agreement. Buyer has duly executed and delivered this Agreement and this Agreement constitutes a legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with the terms hereof. (b) Buyer represents and warrants to City that it has not been suspended, disciplined or disbarred by, or prohibited from contracting with, any federal, state or local governmental agency. In the event Buyer has been so suspended, disbarred, disciplined or prohibited from contracting with any governmental agency, it shall immediately notify the City of same and the reasons therefore together with any relevant facts or information requested by City. Any such suspension, debarment, discipline or prohibition may result in the termination or suspension of this Agreement. (c) No document or instrument furnished or to be furnished by the Buyer to the City in connection with this Agreement contains or will contain any untrue statement of material fact or omits or will omit a material fact necessary to make the statements contained therein not misleading, under the circumstances under which any such statement shall have been made. 10.6 Governing Law This Agreement shall be governed by, subject to, and construed in accordance with the laws of the State of California and City's Charter and Administrative Code. 10.7 Merger of Prior Agreements This Agreement, together with the exhibits hereto, contain any and all representations, warranties and covenants made by Buyer and City and constitutes the entire understanding -13- T between the parties hereto with respect to the subject matter hereof. Any prior correspondence, memoranda or agreements are replaced in total by this Agreement together with the exhibits hereto. 10.8 Parties and Their Agents The term "Buyer" as used herein shall include the plural as well as the singular. If Buyer consists of more than one (1) individual or entity, then the obligations under this Agreement imposed on Buyer shall be joint and several. As used herein, the term "Agents" when used with respect to either party shall include the agents, employees, officers, contractors and representatives of such party. 10.9 Interpretation of Agreement The article, section and other headings of this Agreement and the table of contents are for convenience of reference only and shall not affect the meaning or interpretation of any provision contained herein. Whenever the context so requires, the use of the singular shall be deemed to include the plural and vice versa, and each gender reference shall be deemed to include the other and the neuter. This Agreement has been negotiated at ann's length and between persons sophisticated and knowledgeable in the matters dealt with herein. In addition, each party has been represented by experienced and knowledgeable legal counsel. Accordingly, any rule oflaw (including California Civil Code Section 1654) or legal decision that would require interpretation of any ambiguities in this Agreement against the party that has drafted it is not applicable and is waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the purposes of the parties and this Agreement. 10.10 Attorneys' Fees If either party hereto fails to perform any of its respective obligations under this Agreement or if any dispute arises between the parties hereto concerning the meaning or interpretation of any provision of this Agreement, then the defaulting party or the party not prevailing in such dispute, as the case may be, shall pay any and all costs and expenses incurred by the other party on account of such default or in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys' fees and disbursements. For purposes of this Agreement, the reasonable fees of attorneys of the Office of the City Attorney of the City and County of San Francisco shall be based on the fees regularly charged by private attorneys with the equivalent number of years of experience in the subject matter area of the law for which the City Attorney's services were rendered who practice in the City of San Francisco in law firms with approximately the same number of attorneys as employed by the City Attorney's Office. 10.11 Time of Essence Time is of the essence with respect to the performance of the parties' respective obligations contained herein. 10.12 No Merger -14- The obligations contained herein shall not merge with the transfer of title to the Property but shall remain in effect until fulfilled. 10.13 Non-Liability of City Officials, Employees and Agents Notwithstanding anything to the contrary in this Agreement, no elective or appointive board, commission, member, officer, employee or agent of City shall be personally liable to Buyer, its successors and assigns, in the event of any default or breach by City or for any amount which may become due to Buyer, its successors and assigns, or for any obligation of City under this Agreement. 10.14 Conflicts of Interest Through its execution of this Agreement, Buyer acknowledges that it is familiar with the provisions of Section 15.103 or City's Charter, Article III, Chapter 2 of City's Campaign and Governmental Conduct Code, and Section 87100 et seq. and Section 1090 et seq. of the Government Code of the State of California, and certifies that it does not know of any facts which constitute a violation of said provisions and agrees that if it becomes aware of any such fact during the term of this Agreement, Buyer shall immediately notify the City. 10.15 Notification of Limitations on Contributions Through execution of this Agreement, Buyer acknowledges that it is familiar with Section 1.126 of City's Campaign and Governmental Conduct Code, which prohibits any person who contracts with the City for selling or leasing any land or building to or from the City whenever such transaction would require approval by a City elective officer or the board on which that City elective officer serves, from making a contribution to such an officer, or candidate for such office, or committee controlled by such officer or candidate at any time from the commencement of negotiations for such contract until the termination of negotiations for such contract or three (3) months has elapsed from the date the contract is approved by the City elective officer, or the board on which that City elective officer serves. San Francisco Ethics Commission Regulation 1.126-1 provides that negotiations are commenced when a prospective contractor first communicates with a City officer or employee about the possibility of obtaining a specific contract. This communication may occur in person, by telephone or in writing, and may be initiated by the prospective contractor or a City officer or employee. Negotiations are completed when a contract is finalized and signed by the City and the contractor. Negotiations are terminated when the City and/or the prospective contractor end the negotiation process before a final decision is made to award the contract. 10.16 Sunshine Ordinance Buyer understands and agrees that under the City's Sunshine Ordinance (San Francisco Administrative Code, Chapter 67) and the State Public Records Law (Gov. Code Section 6250 et seq.), this Agreement and any and all records, information, and materials submitted to the City hereunder public records subject to public disclosure. Buyer hereby acknowledges that the City may disclose any records, information and materials submitted to the City in connection with this Agreement. -15- 'I'" 10.17 Tropical Hardwood and Virgin Redwood Ban The City and County of San Francisco urges companies not to import, purchase, obtain or use for any purpose, any tropical hardwood, tropical hardwood wood product, virgin redwood or virgin redwood wood product except as expressly permitted by the application of Sections 802(b) and 803(b) of the San Francisco Environmental Code. 10.18 MacBride Principles - Northern Ireland The City urges companies doing business in Northern Ireland to move toward resolving employment inequities and encourages them to abide by the MacBride Principles as expressed in San Francisco Administrative Code Section 12F.l et seq. The City also urges companies to do business with corporations that abide by the MacBride Principles. Buyer acknowledges that it has read and understands the above statement of the City concerning doing business in Northern Ireland. 10.19 No Recording Neither this Agreement nor any memorandum or short form thereof may be recorded by Buyer. 10.20 Effective Date As used herein, the term "Effective Date" shall mean the date on which the City's Board of Supervisors and Mayor enact a resolution approving and authorizing this Agreement and the transactions contemplated hereby, following execution of this Agreement by both parties. 10.21 Acceptance by Buyer This Agreement shall be null and void unless it is accepted by Buyer and two (2) fully executed copies hereof are returned to City on or before 5:00 p.m. San Francisco time on ,2005. 10.22 Counterparts This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, BUYER ACKNOWLEDGES AND AGREES THAT NO OFFICER OR EMPLOYEE OF CITY HAS AUTHORITY TO COMMIT CITY TO THIS AGREEMENT UNLESS AND UNTIL A RESOLUTION OF CITY'S BOARD OF SUPERVISORS SHALL HAVE BEEN DULY ENACTED APPROVING THIS AGREEMENT AND AUTHORIZING THE TRANSACTIONS CONTEMPLATED HEREBY. THEREFORE, ANY OBLIGATIONS OR LIABILITIES OF CITY HEREUNDER ARE CONTINGENT UPON THE DUE ENACTMENT OF SUCH A RESOLUTION, AND THIS AGREEMENT SHALL BE NULL AND VOID IF CITY'S BOARD OF SUPERVISORS AND MAYOR DO NOT APPROVE THIS AGREEMENT IN THEIR RESPECTIVE SOLE DISCRETION. APPROVAL OF THE -16- T TRANSACTIONS CONTEMPLATED HEREBY BY ANY DEPARTMENT, COMMISSION OR AGENCY OF CITY SHALL NOT BE DEEMED TO IMPLY THAT SUCH ORDINANCE OR RESOLUTION WILL BE ENACTED NOR WILL ANY SUCH APPROVAL CREATE ANY BINDING OBLIGATIONS ON CITY. The parties have duly executed this Agreement as of the respective dates written below. CITY: BUYER: CITY AND COUNTY OF SAN FRANCISCO, a municipal corporation CITY OF SOUTH SAN FRANCISCO a municipal corporation By: By: STEVE LEGNITTO Director of Property [NAME] Its: APPROVED AS TO FORM: DENNIS J. HERRERA, City Attorney By: [NAME] By: Its: [NAME OF DEPUTY] Deputy City Attorney -17- T EXHIBIT A REAL PROPERTY DESCRIPTION All that certain real property located in the City of South San Francisco, County of San Mateo, State of California, described as follows: [NOTE: DESCRIPTION TO COME FROM TITLE REPORT] 008884.0001 \740969.1 3/2/064:27 PM A-1 -18- EXHIBIT B 008884.0001\740969.1 3/2/064:27 PM B-1 -19- EXHIBIT C QUITCLAIM DEED RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: MAIL TAX STATEMENTS TO: Attn: Documentary Transfer Tax of$ based on full value of the property conveyed (Space above this line reserved for Recorder's use only) QUITCLAIM DEED [WITH RESTRICTIONS AND EASEMENT RESERVATIONS] [(Assessor's Parcel No. )] FOR VALUABLE CONSIDERATION, receipt and adequacy of which are hereby acknowledged, the CITY AND COUNTY OF SAN FRANCISCO, a municipal corporation ("City"), pursuant to Resolution No. , adopted by the Board of Supervisors on , 200_ and approved by the Mayor on , 200_, hereby RELEASES, REMISES AND QUITCLAIMS to , any and all right, title and interest City may have in and to the real property located in the City of South San Francisco, County of San Mateo, State of California, described on Exhibit A attached hereto and made a part hereof. 008884.0001 \740969.1 3/2/064:27 PM C-1 -20- Executed as ofthis day of ,200_. CITY AND COUNTY OF SAN FRANCISCO, a municipal corporation GA VIN NEWSOM Mayor GLORIA L. YOUNG Clerk of the Board of Supervisors STEVE LEGNITTO Director of Property APPROVED AS TO FORM: DENNIS J. HERRERA, City Attorney By: [NAME OF DEPUTY] Deputy City Attorney DESCRIPTION CHECKED/APPROVED: [NAME] City Engineer 809557-1 T 2 -21- State of California ) County of San Francisco ) On appeared before me, , personally , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in hislher/their authorized capacity(ies), and that by hislher/their signature(s) on the instrument the person( s), or the entity on behalf of which the person( s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) 809557-1 2 -22- EXHffiIT D BILL OF SALE For good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the CITY AND COUNTY OF SAN FRANCISCO, a municipal corporation ("City"), does hereby sell, transfer and convey to , a ("Buyer"), the personal property described in the attached Schedule 1 and used in connection with the operation of that certain real property located at , San Francisco, California. WITHOUT LIMITING ANY OF THE PROVISIONS OF THE AGREEMENT OF PURCHASE AND SALE BETWEEN CITY AND BUYER, BUYER ACKNOWLEDGES AND AGREES THAT CITY IS SELLING AND BUYER IS PURCHASING SUCH PERSONAL PROPERTY ON AN "AS-IS WITH ALL FAULTS" BASIS AND THAT BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR Th1PLIED, FROM CITY, ITS AGENTS, EMPLOYEES OR OFFICERS, AS TO ANY MATTERS CONCERNING SUCH PERSONAL PROPERTY, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A P ARTICULAR PURPOSE. Executed as of this day of ,200_. CITY AND COUNTY OF SAN FRANCISCO, a municipal corporation GAVIN NEWSOM Mayor GLORIA L. YOUNG Clerk of the Board of Supervisors STEVE LEGNITTO Director of Property 008884.0001\740969.1 3/2/064:27 PM D-1 -23- 'I' APPROVED AS TO FORM: DENNIS 1. HERRERA, City Attorney By: [NAME OF DEPUTY] Deputy City Attorney 809557-1 2 -24- EXHffiIT E ASSIGNMENT AND ASSUMPTION OF LEASE(S) THIS ASSIGNMENT AND ASSUMPTION OF LEASE(S) (this "Assignment") is made and entered into as of this _ day of , 200_, by and between the CITY AND COUNTY OF SAN FRANCISCO, a municipal corporation ("Assignor") and , a ("Assignee"). FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged, effective as of the date (the "Conveyance Date") City conveys title to that certain real property commonly known as (the "Property"), Assignor hereby assigns and transfers to Assignee all of Assignor's right, title, claim and interest in and under certain lease(s) executed with respect to the Property as more fully described in Schedule 1 attached hereto (collectively, the "Lease(s)"). ASSIGNOR AND ASSIGNEE FURTHER HEREBY AGREE AND COVENANT AS FOLLOWS: As of the Conveyance Date, Assignor hereby agrees to indemnify, defend and hold Assignee harmless from any and aU costs, liabilities, losses, damages or expenses (including, without limitation, reasonable attorneys' fees), originating prior to the Conveyance Date and arising out of the landlord's obligations under the Lease(s). As of the Conveyance Date, Assignee hereby assumes all of the landlord's obligations under the Leases and agrees to indemnify Assignor against and hold Assignor harmless from any and all costs, liabilities, losses, damages or expenses (including, without limitation, reasonable attorneys' fees), originating on or subsequent to the Conveyance Date and arising out of the landlord's obligations under the Lease(s). If either party hereto fails to perform any of its respective obligations under this Agreement or if any dispute arises between the parties hereto concerning the meaning or interpretation of any provision of this Agreement, then the defaulting party or the party not prevailing in such dispute, as the case may be, shall pay any and all costs and expenses incurred by the other party on account of such default or in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys' fees and disbursements. For purposes of this Agreement, the reasonable fees of attorneys of the Office of the City Attorney of the City and County of San Francisco shall be based on the fees regularly charged by private attorneys with the equivalent number of years of experience in the subject matter area of the law for which the City Attorney's services were rendered and who practice in the City of San Francisco in law firms with approximately the same number of attorneys as employed by the City Attorney's Office. This Assignment shall be binding on and inure to the benefit of the parties hereto, their heirs, executors, administrators, successors in interest and assigns. 008884.0001 \740969.1 3/2/064:27 PM E-1 - 25.. 'I' This Assignment shall be governed by and construed in accordance with the laws of the State of California and City's Charter. This Assignment may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Assignor and Assignee have executed this Assignment as of the day and year first written above. ASSIGNEE: a By: [NAME] Its: By: [NAME] Its: ASSIGNOR: CITY AND COUNTY OF SAN FRANCISCO, a municipal corporation By: [NAME] Its: APPROVED AS TO FORM: DENNIS 1. HERRERA, City Attorney By: [NAME OF DEPUTY] Deputy City Attorney 809557-1 2 -26- I" 008884.0001 \740969.1 3/2/064:27 PM 'I' AGREEMENT FOR SALE OF REAL ESTATE by and between CITY AND COUNTY OF SAN FRANCISCO, as Seller and CITY OF SOUTH SAN FRANCISCO, as Buyer F or the sale and purchase of South San Francisco, California ,2005 -27- TABLE OF CONTENTS Page 1. SALE .AND PURCHASE ...... ........................... ........................ .................. ............. .......... 2 1.1 Property Included in Sale ........................ .... ..................... ...... .......... ............ .......... 2 2. PURCHASE PRICE ............ ... ..... ................ ....."......................... .... .................. ....... .......... 2 3. TITLE ........... .... ...... ..... ..... .................... ............... ................... ..... ...... ...... .............. ............ 3 3.1 Conditions of Title................................".. ............................................. ................. 3 3.2 Deed Restrictions.................................." ................................................................ 3 3.3 Reservation of Easements ....................."....... ............ ... ...... ........ ........................ .... 3 3.4 Buyer's Responsibility for Title Insurance ............................................................ 3 4. "AS IS" PURCHASE; RELEASE OF CITY .................................................................... 4 4.1 Buyer's Independent Investigation ............................... ....... ........ .................. ........ 4 4.2 Hazardous Substance Disclosure ................................. ..... ..... ................................ 4 4.3 Entry and Indemnity ... ....... .................. .._. ...... ............... ... ........... .... ......... ..... .......... 5 4.4 "As Is" Purchase..................................."................................................................ 6 4.5 Release of City........................... ............_.............................;.................................. 6 5. CONDITIONS PRECEDENT .. ...... ..... ......................................... .................. .................... 8 5.1 Buyer's Conditions Precedent ..... ....... ............. .................. ........ ............................. 8 5.2 Contingency Period. .............................."......... .............................................. ......... 8 5.3 City's Condition Precedent ..................."...... .............................. ............................ 9 5.4 Failure of City's Conditions Precedent.................................................................. 9 6. ESCROW AND CLOSING. ..... ...... .......... ........._... .:..... ............. ....... ................... ........ ....... 9 6.1 Escrow .. ........................................................... ...................................................... 9 6.2 Closing Date .................... .............................................. ....................................... 10 6.3 Deposit of Documents ... ............... ........... ..... .................. ................ ......... ......... .... 10 6.4 Prorations..................................... ........................................................................ 11 7. RISK OF LOSS [NEED TO HAVE REVIEWED BY RISK MANAGER] ................... 11 7.1 Loss.......................................................".............................................................. 11 7.2 Self Insurance ......................................."..... ......................................................... 13 8. EXPENSES.. ..... ....... .... ........... .......... ................... ........... ........ ........ ............ .... ... ..... .......... 13 8.1 Expenses ....................................... ....... .._.............................................................. 13 8.2 Brokers.................................................."....... ....................................................... 13 9 . LIQUIDATED DAMAGES ........ ................... .."....... ......... .......... ......... ........... ................ 13 10. GENERAL PROVISIONS ...... ................... ......._.......... ............ ...... ...... .... ...... .......... ........ 14 10.1 Notices....................................... ....... ....._....... ....................................................... 14 10.2 Successors and Assigns ........................" ............ ................ ..... .............. ....... ........ 15 10.3 Amendments ..... ............ .......... ............ .." ................... ............ .... ......... ..... ......... .... 15 10.4 Authority of Buyer...... ... ......... .............." ..... ...................................... ..... .............. 15 008884.0001 \740969.1 3/2/064:27 PM -1- - 28.. TABLE OF CONTENTS ( continued) Page 10.5 Buyer's Representations and Warranties ............................................................. 15 10.6 Governing Law.................... ...... ................................... ........ ................. .............. 16 10.7 Merger of Prior Agreem.ents .................................. ...................... .......... .............. 16 10.8 Parties and Their _Agents .......... ...................................... ...................................... 16 10.9 Interpretation of Agreem.ent......... ................................... ...... ................ ............... 16 10.10 Attorneys' Fees .................................................................................................... 17 10.11 Time of Essence.......................... ................................................ ................. ........ 17 10.12 No Merger..................................... ................... .................................................... 17 10.13 Non-Liability of City Officials, Employees and Agents ..................................... 17 10.14 Conflicts of Interest ........................... ...................................................... ............ 17 10.15 Notification of Limitations on Contributions ...................................................... 17 10.16 Sunshine Ordinance ............... ............ ......... ....... .................................................. 18 10.17 Tropical Hardwood and Virgin Redwood Ban .................................................... 18 10.18 MacBride Principles - Northern Ireland ..............................................................18 1 0.19 No Recording.......... ........................... .............................................................. .... 18 10.20 Effective Date......... .......................... ............................................ ........ ............... 19 10.21 Acceptance by Buyer ............... ....................... ...................... ............................... 19 10.22 Counterparts.............. ......................... ......... ......................................................... 19 LIST OF EXHIBITS EXHIBIT A REAL PROPERTY DESCRIPTION EXHIBIT B EXHIBIT C QUITCLAIM DEED EXHIBIT D BILL OF SALE EXHIBIT E ASSIGNMENT AND ASSUMPTION OF LEASE(S) -29- ",' 0; ~ "- Vl .... Z loJ ::. ,. o u .E .. g> '" !I! ! ~ .c ~! g l!. ~ 15, "- ~ II' ~ ~ $} fr: ~ ~, ~ o ", 0 ~ Q..;, .;:: :ll ~i.l1 ill 21 ~ t;: ]i '" ~ ~I & o .... o loJ IX IX loJ "- Vl Z "" IX .... -H Vl loJ IX U "" .~ , i rr1""-'. I' \ \ \\ \ \ ! \it.. \ \,}l \\\~ \ ;t' ,<, \ \l\ \ \\' \ \l\ \ \'!\ \ \\ B I \. r; ~ .............., ~ N ;\ :, . \ ! I \ , i~ ~y;/ ~~ / :~ N .. .. >:E Wee (/):E: ..I - 3C (f) ... C CD E ~ (J ~ ;: c:( o UJ 0::: => o () <( UJ CO o I- en ....J UJ () 0::: <( a.. AGENDA CITY COUNCIL CITY OF SOUTH SAN FRANCISCO REGULAR MEETING MUNICIP AL SERVICE BUILDING COMMUNITY ROOM WEDNESDAY, MARCH 8, 2006 7:30 P.M. PEOPLE OF SOUTH SAN FRANCISCO You are invited to offer your suggestions. In order that you may know our method of conducting Council business, we proceed as follows: The regular meetings of the City Council are held on the second and fourth Wednesday of each month at 7:30 p.m. in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Public Comment: For those wishing to address the City Council on any Agenda or non-Agendized item, please complete a Speaker Card located at the entrance to the Council Chamber's and submit it to the City Clerk. Please be sure to indicate the Agenda Item # you wish to address or the topic of your public comment. California law prevents the City Council fi~om taking action on any item not on the Agenda (except in emergency circumstances). Your question or problem may be referred to staff for investigation and/or action where appropriate or the matter may be placed on a future Agenda for more comprehensive action or a report. When your name is called, please come to the podium, state your name and address (optional) for the Minutes. COMMENTS ARE LIMITED TO THREE (3) MINUTES PER SPEAKER. Thank you for your cooperation. The City Clerk will read successively the items of business appearing on the Agenda. As she completes reading an item, it will be ready for Council action. JOSEPH A. FERNEKES Mayor RICHARD A. GARBARINO, SR Vice Mayor MARK N. ADDIEGO Councilman PEDRO GONZALEZ Councilman KARYL MATSUMOTO Councilwoman RICHARD BATTAGLIA City Treasurer SYLVIA M. PAYNE City Clerk BARRY M. NAGEL City Manager STEVEN T. MATT AS City Attorney PLEASE SILENCE CELL PHONES AND PAGERS HEARING ASSISTANCE EQUIPMENT AVAILABLE FOR USE BY THE HEARING IMP AIRED AT CITY COUNCIL MEETINGS L CALL TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE INVOCATION PRESENTATIONS . Certificate of Appreciation - Blue Ribbon Supply, recipient: Ms. Carolyn Dilena . Certificates of Recognition - Mary Crans and Sue Miller . Housing Endowment and Regional Trust (HEART) - San Mateo County Supervisor Richard Gordon . 2006 Summer Camp Program - Recreation Program Supervisors Kelli Cullinan, Tim Chenette and Elaine Porter AGENDA REVIEW PUBLIC COMMENTS ITEMS FROM COUNCIL . Announcements . Committee Reports CONSENT CALENDAR 1. Motion to approve the minutes of February 15 and 22,2006 2. Motion to confirm expense claims of March 8,2006 PUBLIC HEARING 3. Community Development Block Grant Program review of proposed activities requesting CDBG funding; and provide direction regarding funding priorities for the FY 2006-07 program year COUNCIL COMMUNITY FORUM CLOSED SESSION 4. Conference with Legal Counsel, pursuant to Government Code section 54956.95 - liability claims: claimants Pooi, Douthit, ,md Riborozo; Agency claimed against: City of South San Francisco; and pursuant to Government Code section 54956.9(a) - existing litigation: Carlino v. City of South San Francisco ADJOURNMENT: REGULAR CITY COUNCIL MEETING AGENDA MARCH 8, 2006 PAGE 2 AGENDA ITEM #3 Staff Report DATE: March 8, 2006 TO: Honorable Mayor and City Council FROM: Marty VanDuyn, Assistant City Manager SUBJECT: Community Development Block Grant Program RECOMMENDATION: It is recommended that City Council: (1) hear public testimony on the City's housing and community development needs for the One Year Action Plan; (2) review proposed activities requesting CDBG funding; and (3) provide direction to staff regarding funding priorities for the 2006-2007 program year. BACKGROUNDIDISCUSSION: The purpose ofthis Public Hearing is to: (1) obtain citizens' views on housing and community development needs for the City's One Year Action Plan; (2) review activities that are under consideration for funding and past program performance; and (3) give City Council an opportunity to provide direction to staff regarding funding priorities for fiscal year 2006-2007. Organizations seeking CDBG funds can make a brief presentation to Council regarding their projects and City Council may take this opportunity to ask the agencies questions regarding the proposed activities. Federal legislation requires citizen participation in all phases of the development of a locality's CDBG Program. Accordingly, two public hearings have been scheduled, the first to obtain citizens' views of community needs and the second to adopt the City's Action Plan and make final allocations for CDBG funding. This public hearing was announced in the San Mateo Times on February 25,2006. CDBG applications were distributed to the City's standard mailing list and to all community organizations that expressed an interest. Additionally, an invitation to submit proposals was published in the San Mateo Times on January 4,2006, pursuant to federal legislation and the City's adopted Citizen Participation Plan. Requests for Proposals were due by February 3, 2006. The City has received notification from the Department of Housing and Urban Development (HUD) regarding a reduction in funding to the Community Development Block Grant entitlement Staff Report Subject: Community Development Block Grant Program Page No 2 for fiscal year 2006-2007. The City received a 10% reduction, decreasing last year's entitlement of $686,877 to $617,465 for 2006-07. Pursuant to federal spending limitations, a total of $92,620 or 15% may be allocated for public service activities; and a total of $123,493 or 20 % may be allocated for administration activities. Spending limits in those two categories are established by congressional statute and may not be exceeded. The balance of the entitlement amount, or 65 % ofthe total CDBG entitlement, is allocated for housing and commercial activities, including improvements to public facilities. This reduced level of funding will have a significant impact on social service agencies and general CDBG administration and programs across the board. Although 15% ofthis year's program income can be used to offset some of the cuts, the public service category will require a reduction of$5,450 from the current year funding level. SUMMARY OF PROPOSALS RECEIVED: There were no new public service requests this year and the majority of public services funded during the current fiscal year have requested continued funding. Two previously funded agencies did not submit proposals in the public service category. The Child Care Coordinating Council submitted a proposal in the public facility category and Ellipse did not submit a proposal. All agencies currently receiving grant funds were asked to submit an application in the same amount as the current year's allocation due to the reduction in the City's entitlement amount and required cuts in that category. The total amount requested in the public service category totals $124,000 while the total amount available is $111,250. This amount includes 15% of projected program mcome. The combined category of housing, commercial and public facilities consists of the city- sponsored Housing Program, which administers housing development activities, acquisition and rehabilitation projects, minor home repair, and rehab loans to low-income homeowners; the city- sponsored Commercial Rehabilitation Program; CID Housing Access Program; and Rebuilding Together Peninsula. Additionally included in this category are two requests for public facility funding from the Child Care Coordinating Council and the Family Service Agency. REDEVELOPMENT AND HOME FUNDS: Redevelopment Agency housing funds have historically been allocated for housing projects such as Safe Harbor (emergency shelter), the transitional housing operations of Shelter Network, and the Human Investment Project's Home Share Program. These projects provide housing to homeless clients and persons or families at risk of becoming homeless. In fiscal year 2006-2007 these projects will be handled in the same manner by taking advantage of the CDBG allocation process to solicit and award grants. Sitike Counseling Center and La Raza Centro Legal (code enforcement project) also submitted applications for continued funding from the Redevelopment Agency. Staff Report Subject: Community Development Block Grant Program Page No 3 The County of San Mateo HOME Consortium provides yearly administration funds to the City from the HOME Program, based on a percentage of the County's federal HOME entitlement. In prior years, the City Council has targeted these funds to undertake fair housing activities that are required by federal legislation. This strategy enables the City to free up public service dollars, subject to federal spending limits, for non-legal activities. The HOME entitlement was also cut approximately 10%. This year the allocated amount is $16,757. Although the City will be able to continue funding La Raza Centro Legal and Project Sentinel for fair housing activities, cuts will be required in this area as well. PRELIMINARY FUNDING RECOMMENDATIONS CDBG SUBCOMMITTEE: The City Council's CDBG Subcommittee will meet to review all proposals, discuss program accomplishments and prioritize activities for funding. The Subcommittee will hold it's first meeting on March 20, 2006, to review applications and prepare preliminary funding recommendations to be presented to City Council at the April 12, 2006 public hearing. At that meeting, City Council will adopt the Annual Plan and make final funding allocations for the CDBG Program and for the HOME and Redevelopment funds designated as part of the CDBG budget. Staff has prepared a worksheet titled "Community Development Block Grant Program Summary of Funding Requests". The worksheet is attached to this report as "Exhibit B" and provides a summary of projects, funding for each project for the last two fiscal years, funding requests for fiscal year 2006-2007 and a blank column Council Members may use for comments or recommendations. The CDBG Subcommittee would appreciate if Council Members would write in any funding recommendations or comments/questions in the notes column at the far right. The Subcommittee will review these worksheets and use them when making their funding recommendations to City Council. Please note that Council Members are requested to submit their worksheets to the Subcommittee directly or via the CDBG Coordinator, no later than Friday, March 10th. The Subcommittee needs to submit their final recommendations to Council by March 24th. Preliminary funding recommendations must be published for community review on April I, 2006. The City is required by federal mandate to publish preliminary funding recommendations at least ten days prior to the public hearing. The deadline for submission to the San Mateo County Times is March 28,2006. MATERIALS PROVIDED AS EXHIBITS FOR CITY COUNCIL REVIEW: A CDBG binder has been prepared for Council Members containing every proposal that was received and has been placed in the City Council office at City Hall. Additional materials or copies can be secured at the Office of Economic and Community Development upon request. In order to assist Council Members to prepare for the first public hearing, several exhibits have been attached to this staff report, providing detailed information regarding program accomplishments, Staff Report Subject: Community Development Block Grant Program Page No 4 specific project budgets and number of clients served. The attached exhibits are as follows: Exhibit "A" Community Development Entitlement Grant Fund Availability Exhibit "B" Community Development Block Grant Program Summary of Funding Requests Exhibit "C" 2006-07 CDBG Applicant Budgets and Beneficiary Data Exhibit "D" Summary of Final Funding Recommendations for 2006-07 ONE YEAR ACTION PLAN: Each year the City is required to submit a One Year Action Plan to HUD that includes all CDBG and housing related activities. This Action Plan outlines the City's goals for the coming fiscal year and includes the CDBG funding allocations determined by Council. The City is required to hold public hearings on the One Year Action Plan. Because the City is part of the County Consortium, the City submits its Action Plan along with San Mateo County. The County's deadline is May 1,2006. CONCLUSION: The CDBG Subcommittee prepares the funding recommendations for City Council to adopt at the final public hearing scheduled for April 12, 2006. This meeting will be the final opportunity for City Council to take action and authorize submission of the One Year Action Plan to San Mateo County by May 1,2006. The County is required to submit all CDBG Action Plans to HUD by May 15,2006. All funds allocated by City Council on April 12, 2006 will be incorporated into the CDBG budget for fiscal year 2006-2007. BY:~N Marty VanDuyn, . Assistant City Manager --, Attachments: Exhibits A, B, C, D ',. COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM SUMMARY OF SOURCES AND FUNDS A VAILABLE FISCAL YEAR 2006-07 CDBG ENTITLEMENT AMOUNT PROJECTED CDBG PROGRAM INCOME (PI) TOTAL CDBG FUNDS 15% available for Public Service Projects* 20% available for Program Administration** Balance available for Housing, Commercial Rehab.& Public Facilities TOTAL HOME FUNDS TOTAL REDEVELOPMENT FUNDS TOTAL FUNDS ALL SOURCES 06-07 $111,250 $123,493 $507,722 According to HUD guidelines: *Public Serivces is based on 15% of 06-07 entitlement plus $125,000 in PI estimated from Fiscal Year 2005-06 **Administration is based on 20% of 06-07 entitlement only 2/23/2006 - 2 'I" 06-07 FUNDS AVAILABLE $617,465 $125,000 $742,465 $16,757 $70,300 $829,522 EXHIBIT A ~ :59 ~~ C)C o~ a:: ~~ I-~ <:..,J ~~ C)~ ~it g~ ~ffl 1-:::> ~UJ :ilea:: Q.C) ~ 9 2: ~ ~ ~ ~Q ~~... ~~ ~>- ::;)a:: ~~ o~ Om J1 c:: (I) E E o (,) "0 c:: j u.. n:s - o ... Cl c:: "0 c:: j u.. - CI) (I)::; j I tTeo (l)Q 0:: Cl Ceo .- Q "C. 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I- Z w :E D. o .J W > W C w a::: .J <C I- o I- ~I 0' C/) W U a::: ::> o CI) .J .J <C CI) C Z ::J u. .J <C I- o I- o ..- I (0 o o N -- ('I) N -- N taff eport DATE: March 8, 2006 TO: Honorable Mayor and City Council FROM: Marty Van DuYll, Assistant City Manager SUBJECT: REIMBURSEMENT AGREEMENT FOR REPAIR OF STORM DRAIN LINE AT 479 SOUTH AIRPORT BOULEVARD RECOMMENDATION It is recommended that the City Council, by motion, authorize the City Manager to execute the attached reimbursement agreement for repair of the storm drain line at 479 South Airport Boulevard. BACKGROUND/DISCUSSION Costco is currently constructing a gasoline fueling facility and parking lot improven1ents on property it occupies at 451-479 South Airport Boulevard. A City storm drain which crosses a portion of the property has suddenly and unexpectedly failed at this location. City staff has determined that failure of this line constitutes an eInergency and repairs are needed immediately. Since Costco currently has contractors on the site who can expeditiously retain a subcontractor to perform the necessary repair work, staff and Costco have drafted the attached reimbursement agreement to allow the City to delegate the repair work to Costco and reimburse then1 accordingly. FUNDING As indicated in the attached proposal from REPIPE-Califomia, the required work is estimated to cost $132,263.82. There are currently funds available in the Stormwater fund for the project. CONCLUSION The City is responsible for all costs and expenses pertaining to the storm drain line. Since the line has failed and needs immediate repair it is mutually beneficial to delegate the repair work to Costco since they have contractors currently on site and are able to quickly subcontract for this work. Consequently, it is recommended that the City Council authorize the City Manager to execute the attached reimbursement agreement with Co"stco to enable the repair work to proceed without delay. B' Marty Van DuYll Assistant City Manag -, Attachment: Reimbursement Agreement Repair Proposal- REPIPE-Califomia dated March 8, 2006 REIMBURSEMENT AGREEMENT FOR REPAIR OF STORM DRAIN LINE THIS REIMBURSEMENT AGREEMENT (this "Agreement") is Inade and entered into this _day of , 2006, by and among the CITY OF SOUTH SAN FRANCISCO, a municipal corporation of the State of California, herein referred to as "City", and COSTCO WHOLESALE CORPORATION, a Washington Corporation, herein referred to as "Costco". A. Costco is undertaking improvements (the "Project") to portions of the real property it occupies at 451-479 South Airport Boulevard, South San Francisco, California, including to land on both sides of Belle Air Road (the "Property"). B. City is the owner of a portion of the Property and has leased it to Costco pursuant to that certain Ground Lease dated February 26, 1985, by and between City and Costco (as successor through merger with The Price Company). C. City and Costco entered into that certain Storm Drain Line Maintenance License dated June 22,2005, and recorded as Document No. 2005-155023 in the Official Records of the County of San Mateo (the "License"), which license grants to City the right to keep in place and to access for maintenance a storm drain line (the "Line") traversing the Property, as more particularly described in the License, for the remaining term of the Ground Lease. The License provides that City is responsible for all costs and expenses pertaining to the Line, including without limitation alteration, maintenance, repair, replacement, removal and operation thereof. D. The Line has suddenly and unexpectedly failed and requires immediate repaIr. E. Accordingly, City has determined the failure of the Line constitutes an emergency and has authorized the Line to be repaired without giving notice for bids to let contracts, in accordance with California Public Contract Code Section 22050. F. In connection with the Project, Costco currently has contractors on-site that are experienced and competent in dealing with contaminated soils and that can retain a subcontractor to repair the Line with appropriate precautions and more expeditiously than the City could do so acting on its own. G. City desires to delegate Costco to repair the Line and Costco is willing to do so on behalf of the City, subject to the terms and conditions herein provided. NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, it is agreed as follows: 1. Estimate for Repair. Costco has submitted to City an estiInate for repair of the Line (the "Repair Work") from rePipe-Califomia, Inc. (the "Repair Contractor"). 2. Contract for Repair. City's Public Works Department approves said estimate and authorizes Costco to enter into a contract for the Repair Work (the "Repair Contract"), which shall include a ten percent (10%) contingency. Costco shall enter into the Repair Contract either directly or acting through its general contractor, its excavation contractor or other contractor. The Repair Contract shall be subject to Prevailing Wage requirements. 3. Change Order Procedure. The contract amount for the Repair Work shall not be increased by more than the contingency unless the increase is reflected in a change order approved by Costco and City. Costco may unilaterally increase the contract up to an amount not to exceed Five Thousand Dollars ($5,000) but shall provide City with a copy of the change order(s) for such increase. Change orders in excess of Five Thousand Dollars ($5,000) must be approved by the City Public Works Director. Costco and the City Public Works Director together may approve a change order if net total of the change orders approved through and including the then-pending change order will not exceed the contract amount plus contingency by more than Fifty Thousand Dollars ($50,000.00). Costco and the City Manager together may approve any change orders in excess thereof. If Costco is prepared to approve a change order, Costco shall submit the change order proposal to the City for approval. The City's approval shall not be unreasonably withheld, delayed or conditioned. The City shall accompany any rejection with a written statement of the basis therefor. Costco may proceed with the work covered by the change order pending City approval of the change order, or even after City rejection of the change order, but Costco shall do so at its own risk to the extent that the City raises valid objections to the change order proposal. Any change order that is submitted to the City for approval shall be deemed accepted if not accepted or rejected by the City within five (5) business days of such submittal. Notwithstanding any other provision of this Agreement, if treatment or removal and replacement of contaminated soils is required in connection with the Repair Work, that treatment or removal shall be included within the scope of the Repair Work, whether preformed by the Repair Contractor or another contractor retained directly by Costco or as a subcontractor to the Repair Contractor, and the costs ,of treating or removing and replacing contaminated soils \ shall be processed as a change order and reimbursable to Costco. 4. Reimbursement. City shall inspect the Repair Work upon notice from Costco or the Repair Contractor that the Repair Work is substantially complete and shall accept the work as complete if it is consistent with the specifications of the Repair Contract. If City finds deficiencies in the work, City shall issue a punch list. Within thirty (30) days following inspection and acceptance of the substantially cOInpleted work, City shall pay to Costco the amount of the contract price as adjusted by any change orders approved in accordance with Section 3 hereof, including without limitation any change orders necessitated by contaminated soils, and subject only to a holdback sufficient to cover the cost of any punch list items. The holdback shall be paid to Costco 2 within thirty (30) days following City inspection and acceptance of the final completion of the punch list items. 5. Release and Mutual Indemnity. City acknowledges and agrees that in performing in accordance herewith and causing the Repair Work to be undertaken, Costco shall be acting as an agent for the City. Costco shall assign all contractors' warranties for the Repair Work to the City. City shall indemnify and hold Costco harmless from and against and hereby release Costco from all common law and statutory liabilities, damages, obligations, losses, claims, civil actions, costs or expenses, including attorneys' fees (collectively, "Claims") resulting from any act or omission or negligence of City and the licensees, agents, servants, employees, guests, invitees, and visitors of City in or about the Property, or arising from any injury or damage to any person or property occurring in or about the Property as a result of any act, omission or negligence of City, licensees, agents, servants, employees, guests, invitees, and visitors. Further, City hereby releases Costco from any and all Claims resulting from any act or omission or negligence arising out of or in any way connected with the performance of the Repair Work by the Repair Contractor and shall look solely to the Repair Contractor with respect to any deficiencies in the Repair Work. Additionally, Costco shall indemnify and hold City harmless from and against and hereby releases City from all Claims resulting from any act or omission or negligence of Costco or Costco' s general contractor retained by Costco for the Project and the and the licensees, agents, servants, employees, guests, invites, and visitors of Costco and said general contractor in or about the Property, or arising from any injury or damage to any person or property occurring in or about the Property as a result of any act, omission or negligence of Costco or said general contractor, licensees, agents, servants, employees, guests, invitees, and visitors. 6. Insurance. Prior to commencement of Repair Work, City shall be named as an additional insured on Costco's insurance liability policy. As evidence of such coverage, Costco shall provide City with on-demand access to Costco' s Memorandum of Insurance at the following website: www.marsh.com/moi?client=0847. 7. Notices. Any notice or other communication hereunder shall be in writing and shall be hand delivered or sent by United States registered or certified mail, postage prepaid, return receipt requested, addressed to the appropriate party at its address set forth below, or at such other address as such party shall have last designated by notice to the other parties. The same shall be deemed given when delivered or three days after mailing; provided, however, that if any such notice or other communication shall also be sent by telecopy or fax machine, such notice shall be deemed given at the time and on the date of machine transmittal if the sending party receives a written send verification on its machine and forwards a copy thereof with its mailed or courier delivered notice or communication. The addresses for notices are as follows: If to City: City of South San Francisco 400 West Grand Boulevard South San Francisco, CA 94083 Attention: Public Works Director Fax No.: (650) 829-6665 3 If to Costco: Costco Wholesale Corporation 999 Lake Drive Issaquah, W A 98027 Attention: Legal & Real Estate Department Fax No: (425) 313-8114 With a Copy to: Preston Gates & Ellis LLP 55 Second Street, Suite 1700 San Francisco, CA 94105 Attention: David B. Franklin Fax No.: (415) 882-8119 8. Attorneys Fees. In the event any party hereto brings or commences litigation for a declaration of the rights of the parties under this Agreement, for injunctive relief, or for an alleged breach or default of this Agreement, or any other action arising out of this Agreement, the prevailing party in any such action shall be entitled to an award of reasonable attorneys' fees and any court costs incurred in such action or proceeding, in addition to any other damages or relief awarded, regardless of whether such action proceeds to final judgment. 9. Entire Agreement No Oral Modifications. This Agreement and the exhibits hereto constitute the final and complete agreement and supersede all prior correspondence, memoranda or agreements. This Agreement cannot be changed or modified other than by a written agreement executed by all of the parties. 10. Successors Bound. The provisions of this Agreement shall extend to, bind and inure to the benefit of the parties hereto and their respective personal representatives, heirs, successors, and assigns. . 11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. 12. Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. 13. Severability. If any term or provision of this Agreement shall, to any extent, be held invalid or unenforceable, the remaining terms and provisions of this Agreement shall not be affected thereby, but each remaining term and provision shall be valid and enforced to the fullest extent permitted by law. 14. Captions. The captions of this Agreement are inserted solely for convenience of reference only and do not define, describe or limit the scope or intent of this Agreement or any term hereof. [SIGNATURES BEGIN ON NEXT PAGE] 4 THIS AGREEMENT is executed as of the date and year first above written. CITY: CITY OF SOUTH SAN FRANCISCO By: ATTEST: Audrey Hooper, City Clerk APPROVED AS TO FORM: City Attorney Date: COSTCO: COSTCO WHOLESALE CORPORATION a Washington corporation By: Its: 5 83i08!2~8S 82:52 30 '3 2 '~ l.:H37'11 F:EF;I I PE CA f-ALil:. lJ'i -CALIF RNIA ~~~ ~",,",es_......rnn~~ -"'="":1:'__ __ ~~rc:l~r~""llPJ\.;:e.er-- M~u'cb 8, 2006 Proposal No. # 06-434..A LedcoJr Const.ruction Int, 9655 SE 3'6t~ Street, Slllite 210 Mercer I~R$nd, Washington 98040 Ph: (206) 230..B811 F.ax: (206) 230-8833 Atnl: Don Alderman Proposal for: CleM9 CCTV & Rehabilitation of ~ppro:omately 650 .L.J~'. of existing 21-incb diameter Cl\'IP pip~ with the Rib Loc Expands Pipe Sy'stem locHted off Airport Bhid. adj~cellJlt tq1 f,he COSCO. Dear D011: RePipe - Ca1Homia:~ Inc. is p'8~sed to offer the. f.0HoVY1ng quotatiQn fQT the clean) (:ctv & rehabilitation of approxtmatel.y 650 LF. ofexistmg 21~inch diameterCMP with the Ri.b Lac Expanda Pipe SY:5tem.. TIils proposal is based on the .information supplied to us by Le.dcor Construction and our site visit \Vf; aSSU1fne that the underground pipe line within this project is lw.eable and con.tains no offsets or protrUsic:ms exceeding 12.5\1/0 of the initial pipe line diameter. .in accordance witb ASTlv1 F 174-1 ~ thes~ cOnditIons require e1\.~er1'k11 repairs, Any edditiona! work required to renlOve obstructions or make point repairs is cQrwidered outside tht scope of this proposal. Proj~ct Des~~riptio1l1: TJ'lJe existing 21~,inch ClvlP pipelines to be lined art;;: located in lfle in the City of South S<Ul Fra.ncj~c.o Based on l.YU,f assessmerlt of the pipe~ the existing pipe !s considered t'0 be ITi the ?'fully deterjorated~' design condition, Accordingly, the installed liner pipe \\till be a structural liner pipe and will not require StrUCtMIJ support from the exJsdng pipe to support the design .loa.cL..,. 5525 ii. Gibrilll,tar Strnet Ontario, CA ~1764 Ph~ 909-291...4050 flltx: 909-291-4070 83/08/2005 02:52 '3E1'3:2914B7;1:;l REPIPE Cf:;, Pt.GE C1.~ Pipl't Lining J\lJ~t~ni81ls: RePipe-Ca proposes to install the RibLoc Expanda pipe lining system for this projel1:. The; l~ner pipe '\.vW consi:st c~f a 19.42~inch dia..'l1cte1, RibLoc. 126-20 EX profile llner pipe luateriaJ after insr.allatjon of liner rUlltef'ial. F oHowing J iner in~taUation\ the ends of the liner pipe bet""veen the lin.er and the existing pipe will be sealed to prevent infiltra.tion/ex-fUtration. Upon completion of the wor~ the installed liner will be video inspected, Proposed lining w{lrk for this project will be in accordance ,~ith the Greenbook~ section 500~ 1-13. r~Pip~~C:alUfornja, Inc. win e()nlplet.e the following s~ope of work for this pro,ieet: 1. ~1~)biJke equipment and persoDnel to jobsit.e. 2. CCTV inspilcil1UlJfJ\ tb.~ eXisting pipelin~ prior to Unmg. 3. Install 19.42..in~b ID R.ibLoc 126..20 EX profile liner pipe ~:o rehabilitate the existing 650 LF of Zi-inch C1VIP. 4, R.einstate existing!llervice tOrlnep:t1ons b)' use of robotic Internal cutting equipmelmt if needed. 5. Se.al ends of liner pipe betwe.~rn niner and th~ existing pip~ at .t:':sch end. 6. Post CCTV pipe inspedi,lon of the ~babilitated Une segments. C~mpen8ation sh~n be m~de in aecord~lmce with the f{l\lk~~~tjng unit pri~e ~chedu!e: I\tobilijze~ Plr'~-C'CTV inspect & Clean, 21..inch Rep. 21~ 650 LF == $17~13.82 MobUizet Insb4U RibLoc E';;IPuullda liner pipe, sel2l1 ends and Post CCTV Ul!tf(:H.,z.ction of the Teb~bUitated line s~m~ntv Zl" 65fB LF' x $: .1 77.f.JOLF ::: $1.15,050.00 IPT AL PRI!2E ::: $132~263.82 SS:!5 E. Gibrraltar SttE'Set Ontarivr tA '.\)1164 Ph. 909"'291-4050 Fax: 909~291-4070 C3iU~!~~~b ~~:,~ 'j tl'j [:1l. y 1;;' .. i:;.1 r,L..1 ~ I L. ,,_,1""1 Acceptance oftbis proposal will inc.lude the followi.ng conditions and el:cllislou~: i' Lin.ing \'\-iJl be completed only after the. lines are Cleaned & CeDI and determined to be Jinable 1~rjth the R.i b toe. Expanda Pipe .Process, IJl' Repipe-CaJifomia's c.leaning contractor will be allowed to dispose of debris at the plant adjacent to the job site. o P~nnits, inspection or engin~erjng fees, testin.g costs and liquidated damages are n.ot included in this bid. e This bid is based 0.0. one mobiliz:ation to and one demobilization from. Ontario~ CaHf01nia. There \\~n be an additional c.harge of$5~OOO.OO for any re.rnobiHzation. ~ Unit prices to prevail f.or pay purposes. . This quotatio.n is based on award of all items of work Reduction in. quantity and changes in the scope of work may require a unit price adjustment. ~ Sealing of Servir:.e Connections is net in,eluded iJl the scope of work for this P.r\lp08al ~ It is assumed that all pipes included as part of this project are lineable ~.Jld contain DO major <obstnH.'jions, bends or offsets that would i.mpact our abUhy to perform the listed scope of work. ~ Any additional 'work and/or exca'vatio.n required for removing obstructions, making point repairs. exposing dead endsJcleanouis, reinstate/sea.11aterals externally or trim protruding lateralsltaps is cQ1Jsidere.d to be outside the scope of this proposaL ~ Ac:cess for purposes of lining to be provided by Ledcor or others. '" Proposal valid for 90-d.aY:::l from date of proposaL . Requirement for major traffic control is considered to 'be outside the scope of this proposal. RePipewCalHbrnia, Inc. is pleased to off(;'f this proposal to Ledcor Construction~ Inc. & the City of South San Francisc.Ql' 3.t'ld looks forvva:rd to working with you in the neat future. 1f you have any question regarding proposal please feel free to contact me at (909) 291.4054 Sincerely~ rePipe -. California~ Int. Lic~nse #814303 Joseph P. Dominguez Proj ect Manager Acceptance Signature ~_~. Date:~~ Cc: Mick Fuller - rePip~-California. Inc. GenerallVia.'1ager 5525 E. Gibr.tllitmr Streoat Ontario, CA 917$4 Ph: 909-2,91-4050 Fax~ 909-291-40110