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HomeMy WebLinkAbout2009-05-13 e-packetAGENDA REDEVEL®PMENT AGENCY CITY OF SOLTT~I SAN FRANCISCO ~EGULAIZ MEETING MUNiCIl'AL SERVICES BUILDING COl~iivlUN_TTY ROOM WEDNESDAY, MAY 13, 2009 6:30 P.NI. 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 meeting of the Redevelopment Agency is held on the second Wednesday of each month at 6:30 p.m. in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Public Comment: For those wishing to address the 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 refer-red 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 Clerlc will read successively the items of business appearing on the Agenda. As she completes reading an item, it will be ready for Board action. KARYL MATSUMOTO Chair MARK N. ADDIEGO Vice Chair PEDRO GONZALEZ Boardmember RICHARD A. GARBARINO Boardmember RICHARD BATTAGLIA Investment Officer BARRY M. NAGEL Executive Director KEVIN MULLIN Boardmember KRISTA MARTINELLI-CARSON Clerk STEVEN T. MATTAS Counsel PLEASE SILENCE CELL PHONES AND PAGERS HEARING ASSISTANCE EQUIPMENT IS AVAILABLE FOR USE BY THE HEARING-IMPAIRED AT REDEVELOPMENT AGENCY MEETINGS In accordance with California Government Code Section 54957.5, any writing or document that is a public record, relates to an open session agenda item, and is distributed less than 72 hours prior to a regular meeting will be made available for public inspection in the City Clerk's Office located at City Hall. If, however, the document or writing is not distributed until the regular meeting to which it relates, then the document or writing will be made available to the public at the location of the meeting, as listed on this agenda. The address of City Hall is 400 Grand Avenue, South San .Francisco, California 94080. CALL TO ORDER ROLL CALL AGENDA REVIEW P;=,?BLIC COMMENTS CONSENT CALENDAR 1. Motion to approve the minutes of April 8, 2009 and Apri127, 2009. 2. Motion to confirm the expense claims of May 13, 2009. 3. Resolution adopting a Replacement Housing Plan for property located at 323 Miller Avenue. ADMIi~ISTRATIVE BL"SINESS 4. Resolution awarding the Construction Contract to C. Overaa & Co., of Richmond, California, for the Miller Avenue Parking Structure Project in an amount not to exceed $8,421,500, appropriating $1,670,080 from Redevelopment Agency Funds for the project, amending the 2008-2009 Capital Improvement Program Budget, and rejecting all bid protests and all bids for the bid alternatives. 5. Resolution awarding a Construction Management Agreement for the Miller Avenue Parking Structure Project to Rudolph and Sletten, Inc. of Redwood City, CA in an amount not to exceed $280,000. 6. Resolution awarding a Consulting Services Agreement to Exponent Failure Analysis Associates for the pre and post construction surveying for the Miller Avenue Parking Structure Project in an amount not to exceed $110,000. 7. Resolution approving Memorandum of Understanding with Oyster Point Ventures LLC and Resolution approving MOU with the San Mateo County Harbor District related to potential development of Oyster Point Business Park and Oyster Point Marina. REGULAR REDEVELOPMENT AGENCY MEETING MAY 13, 2009 AGENDA PAGE 2 CLOSED SESSION 8. Property Negotiations. (Pursuant to Government Code § 54956.8) Property under negotiation: City Owned Property at Oyster Point Marina (APN #'s Ol ~-010-240, 015-010-260, 015-010-270, 015-010-500, 015-010-600, 015-010-630, O15-i90-170, 015-190-190) Agency I~Tcgotiator: Marty Van Duyr~ Negotiating Parties: City of South San Francisco, South San Francisco Redevelopment Agency, and Oyster Point Ventures, LLC and Shorenstein/SKS. Under Negotiation: Price and terms for conveyance of property. 9. Property Negotiations. (Pursuant to Government Code § 54956.8) Property: 415-417 Grand Avenue. Company Negotiator: Dalai Metwalii, SSF RDA. Agency IVTegotiator: Marty Van Duyn. 1 C. Property Negotiations. (Pursuant to Gover~rrient Code § 54956.8) Property: 938 Linden Avenue. Company Negotiator: 15SSF DEV, LLC. Agency Negotiator: Marty Van Duyn. 11. Property I~Tegotiations. (Pursuant to Government Code § 54956.8) Property: 344 Grand Avenue. Company Negotiator: St. Vincent de Pau1_ and SSF RDA. Agency Negotiator: Marty Van Duyn. ADJOURNMENT REGULAR REDEVELOPMENT AGENCY MEETING MAY 13, 2009 AGENDA PAGE 3 ,~ T~ ~ c ~ ~ j ~~ ~f K}~ tia x. ~ '~= ~~ -- ~~~ RE~EVE~:~~NIENT auENC ~U ~„~;,:,,~ ~' CiT ~j OF SOUTu SAN FRANCISCO C'y LI FOR~~A 1KF,OULAR ~1E~T ~ NG MUNICIPAL SERVICES 1~UILDiivTG COMr~~U-IvITY ROOM WEDNESDAY APRIL 8, 2009 CALLED TO ORDER: 6:32 p.m. ROLL CALL: Present: Boardmembers Garbarino, Gonzalez and Mullin, Vice Chairman Addiego and Chairwoman Matsumoto. Absent: None. AGENDA REVIEV~J Executive Director Nagel advised that Closed Session Item No. 8 did not require hearing unless the Agency planned to request additional information with respect to Consent Calendar Item No. 7. Chairwoman Matsumoto surveyed the Boardmembers and confirmed the Agency did not require additional information with respect to Consent Calendar Item No. 7. Accordingly, Closed Session Item No. 8 would not be heard. PUBLIC COMMENTS None. CONSENT CALENDAR 1. Motion to approve the minutes of March 11, 2009 & March 25, 2009. 2. Motion to confirm the expense claims of April 8, 2009 in the amount of $438,131.52 3. Resolution No. 6-2009 authorizing waiver of rent increases for the Sitike Counseling Center for one year. 4. Resolution No. 7-2009 authorizing the provision of an $88,000 loan to Tipton Metro, LLC, for the Metropolitan Hotel, authorizing the execution of loan documents in connection with such financing, and approving an amendment to the Redevelopment Agency's operating budget. Motion to accept r.h e building de~~molition of 212 & 216 Bader .Avenue Proie~:.t Nom. 58-13232-920 as complete in accordance with plans and specifications. 6. Resolurtion No. 8-2009 rejecting all base and alternate bids for the constr~~ction of the Lux Avenue and Lir_der~ Avenue ' j einporary Parking I,ot +i 7 Project. 7 . Resolution No. 9-20(}9 ar?i horizing the ExecutlVe Llrector t0 ~xeCLlte an LXClt,sive Negotiating Rights Agreement regarding 415-417 Grand Avenue. ivlotion -Boardmember GarbarinoiSecond -Vice Chairman Addiego: To approve Consent- Calendar Items Nos. 2-7. Unanimously approved by voice vote. Item No. 1: Chairwoman Matsumoto noted the Minutes of the 1`~farch 11, 2009 Redevelopment Agency Meeting did not include her request and staff's confirmation that Applicant Patel would not be assessed an application fee for resubmittal of the application related to the Hyatt Place Hotel Project. Counsel Mattas confirmed Chairwoman 1~~latsurriotc's recollection was correct that this exchange was part of the discussion at the March 11, 20C9 public hearing on the subject. Motion -Boardmember Gonzalez/Second -Boardmember Garbarino: to approve Consent Calendar Item No. 1 with the condition that the March 11, 2009 Minutes be modified to include the exchange betv~.~een Boardmember Matsumoto and staff through which it was confirmed that Applicant Patel would not be assessed a fee for resubmitting the application pertaining to the Hyatt Place Hotel Project. Unanimously approved by voice vote. CLOSED SESSION 8. Conference with Real Property Negotiator (Pursuant to Government Code section 54956.8) Property: 415-417 Grand Avenue. Negotiating Parties: Dalal Metwalli and SSF RDA Agency negotiator: Marty Van Duyn. Under Negotiation: Terms and Conditions for Purchase of Property. Item not heard. REGULAR REDEVELOPMENT AGENCY MEETING APRIL 8, 2009 MINUTES PAGE 2 9. Canference ~~~ith Real Property'i:eg~tiata,- (Pursuant to vovernment Code Section 5496.8) Property: City owned property Located at Oyster Point Marina, I~?egotiating Parties: Oyster 1=t. Ventures LLC, Sllorenstein/SKS, t~~e City of Saut:l San _}'ranClSCv aild file Lily Ci Sotlth San t'i'ai.ClSCii ~cdeveiopiilent Agency Agency Negotiator: Marty Van D" yn Under Negotiation: City owned property located ai Oyster Point Marina. Closed Session opened: 6:37 p.m. Recess: 7:02 p.m. Meeting resumed: 9:46 p.m. Closed Session resumed: 9:46 p.m. Open Session resumed: 11:30 p.m. Report out of Closed Session: No reportable action taken. ADJOURNMENT Being no further business, Chairwoman Matsumoto adjourned the meeting at 11:30 p.m. Submitted by: Approved: ./ •- l Kris Ma in i-Larson, Clerk Karyl Matsumoto, Chairwoman City of South an Francisco City of South San Francisco REGULAR REDEVELOPMENT AGENCY MEETING MINUTES APRIL 8, 2009 PAGE 3 ~o ,,~,,,. ~' °~x S~ M]~r~TU~'~S o ~ y ° SPECIAL MEETING ~9trFO~~~~ REDE~~ELOPMENT AGEllTCY AND CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO F.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 City Hall Conference Room 400 Grand Avenue South San Francisco, California Monday, Apri127, 2009 Call to Order: 6:30 p.m. DRAFT Roll Call: Present: Councilmember Garbarino, Councilmember Gonzales, Cour~cilmember Mullin, Vice Mayor Addiego, Mayor Matsumoto Absent: None 1. Public Comments -Limited to items on the agenda. Mayor Matsumoto advised the City CounciUAgency that she had been requested to apply and would be applying for a position on the California Economic Development Commission - Biotech Advisory Committee. Mayor Matsumoto advised the City Council that if she is appointed she would provide periodic updates to the City Council. 2. Closed Session: Property Negotiations. (Pursuant to Government Code § 54956.8) Property under negotiation: City Owned Property at Oyster Point Marina (APN #'s 015-010-240, 015-010-260, 015-010-270, 015-010-500, 015-010-600, 015-010-630, 015-190-170, 015-190-190) Agency Negotiator: Marty Van Duyn Negotiating Parties: City of South San Francisco, South San Francisco Redevelopment Agency, and Oyster Point Ventures, LLC. And Shorenstein/SKS Under Negotiation: Price and terms for conveyance of property. City Council and Redevelopment Agency entered closed session at 6:35 p.m. City Council and Redevelopment Agency reconvened in open sessicn at 7:30 p.m. The City Council ar~d Redevelopment Agency gave staff direction but did not take any reportable action. 3. Adjourn~rnent of Special City council and Redevelopment Agency meeting Being no further business, NSayor/Chairperson Matsumoto adjourned. the meeting ai 7:30 p.m. Submitted by: ~^ ~,~~~ Steven T. Mattas City Attorney City of South San Francisco Approved; Karyl Matsumoto Mayor/Chairperson City and Redevelopment San Francisco Agency of Scuth SPECIAL REDEVELOPMENT AGENCY AND CITY COUNCIL MEETING APRIL 27, 2009 MINUTES PAGE 2 I certify that the demands set forth on this payment register are accurate and funds are available for payment.* ~'~,, /~ I ~ ~ ~ ' \~J DATED • ~ ; v I ~ ~ ''~ ~~~ FINANCE DIRECTOR *Note: Items below do net include payroll related payments Checks: Date Amount 04/08/09 1,048,107.43 04/14/09 88,000.00 04/15/09 26,242.29 04/22/09 24,646.16 04/29/09 132,840.72 G5/06/09 410,722.17 Electronic Payments: Date Amount To Description 04/20/09 40,000.00 First National Bank First Time Home Buyer Program Total Payments $ 1,770,558.77 This is to certify that the above bills were confirmed at the regular meeting of the Redevelopment Agency of South San Francisco held May 13, 2009. 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BACKGROND/DISCUSSION In December 2006, the Redevelopment Agency Board authorized the purchase of 323 Miller Avenue, a 3,500 square foot property containing two residential units. The Agency intended to maintain the units as affordable housing and land bank the property for a future affordable housing development. At about the same time, the City Council directed staff to begin preliminary planning for a public parking structure to enhance the Downtown business climate. A parking study by Walker Parking Consultants concluded that merging the property at 323 Miller Avenue with the adjacent City Parking Lots Nos. 8 and 10 would increase the feasibility of developing a parking structure on the site. The building at 323 Miller Avenue currently contains two vacant one-bedroom apartments which will be demolished to accommodate the proposed parking structure. Both apartments are currently vacant but were once occupied by very low-income tenants. One elderly tenant voluntarily vacated the property shortly after the Agency's acquisition in 2006 to move in with his son in Northern California. The Agency relocated the other tenant in February 2008 into Agency owned property at 311 Tamarack Avenue pursuant to a Relocation Plan dated December 14, 2007. The proposed project is a 4'/2 story public parking structure with 256 parking spaces and 13,700 square feet of ground floor commercial space. The parking structure is in the Downtown Commercial (D-C) Zoning District and will provide a significant benefit to downtown businesses. The Agency prepared the attached Replacement Housing Plan for the Property pursuant to Section 33413.5 of the California Health and Safety Code (the Code). Section 33413.5 of the Code requires that, not less than 30 days prior to the execution of an agreement for the acquisition of real property or an agreement which would lead to the destruction or removal of dwelling units from the low-and moderate-income housing market, an agency adopt by resolution a Replacement Housing Plan. Pursuant to the Code, the Agency made a draft of the proposed Replacement Housing Plan available to the general public for review and comment beginning on Apri122, 2009. Interested persons had the Staff Report Subject: Replacement Housing Plan for 636 El Camino Real Page 2 opportunity to inspect the Plan at the office of the Community Development Department, 400 Grand Avenue, South San Francisco. The Replacement Housing Plan includes a description of the Project, as well the following required components: (1) the general location of housing to be rehabilitated, developed or constructed pursuant to Section 33413; (2) an adequate means of financing such rehabilitation, development, or construction; (3) a finding that the replacement housing does not require the approval of the voters pursuant to Article XXXIV of the California Constitution, or that such approval has been obtained; (4) the number of dwelling units housing persons and families of low- or moderate-income planned for construction or rehabilitation; and (5) the timetable for meeting the Replacement Housing Plan's relocation, rehabilitation and replacement housing objectives. FUNDING The Redevelopment Agency Board has separately authorized funding for the Parking Structure, including costs for demolishing 323 Miller Avenue. CONCLUSION Staff recommends the Redevelopment Agency Board adopt the attached Resolution approving a Replacement Housing Plan for property located at 323 Miller Avenue. Developing the Parking Structure will significantly enhance the Downtown business climate by providing additional parking during peak business hours. B Marty Van Duyn Assistant Executive erector Attachment: Resolution Replacement Housing Plan Approve ~ `~ ~. M. Nagel Executive Director 1231943. 1 RESOLUTION NO REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA RESOLUTION APPROVING THE REPLACEMENT HOUSING PLAN FOR THE PROPERTY LOCATED AT 323 MILLER AVENUE WHEREAS, pursuant to the California Community Redevelopment Law (Health and Safety Code, Section 33000 et seq.), the Redevelopment Agency of the City of South San Francisco ("Agency") has the responsibility for implementing the Redevelopment Plan for the Downtown/Central Project Area ("Project Area") adopted by the City Council of the City of South San Francisco by Ordinance No. 1056-89 on July 12, 1989 (as amended, the "Redevelopment Plan"); and WHEREAS, the Agency owns the real property located in the Project Area at 323 Miller in South San Francisco, California (the "Property"); and WHEREAS, Agency intends to construct a parking garage on the Property, which will provide significant benefit to downtown businesses ("Project"); and WHEREAS, the Project will result in the destruction or removal of two residential units on the Property formerly occupied by very low-income households; and WHEREAS, pursuant to Health and Safety Code Section 33413.5, an agency must adopt a replacement housing plan not less than 30 days prior to the execution of an agreement that would lead to the destruction or removal of dwelling units from the low- and moderate-income housing market; and WHEREAS, in accordance with Health and Safety Code Section 33413.5, the Agency has prepared a replacement housing plan for the Property (the "Replacement Housing Plan"); and WHEREAS, pursuant to the Replacement Housing Plan, the Mid Peninsula Housing Coalition will construct 106 very low-income replacement dwelling units at 636 El Camino Real; the Agency will impose affordability covenants on the replacement dwelling units to ensure that they remain affordable to very low-income households for the length of time required by Health and Safety Code Section 33413; the construction of the replacement dwelling units will not require voter approval under Article 34 of the California Constitution; the replacement dwelling units will be completed within 4 years of the destruction or removal of the units on the Property; and the construction of the replacement dwelling units will be funded from the Agency's Low and Moderate Income Housing Fund and one or more of the following sources: City of -1- South San Francisco Developer Housing Trust, San Mateo County Housing Endowment and Regional Trust, State of California Low-Income Housing Tax Credits or the State of California's HCD Infill Grant. NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of South San Francisco that it hereby adopts the Replacement Housing Plan substantially in the form on file with the Agency Secretary prepared in compliance with Health and Safety Code Sections 33413 et seg. for the Property and authorizes the Executive Director to sign all documents, to make all approvals and take all actions necessary or appropriate to carry out and implement the intent of this Resolution.. 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 13th day of May, 2009 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: Agency Secretary -2- Replacement Housing Plan 323 Miller Avenue DOWNTOWN/CENTRAL REDEVELOPMENT PROJECT AREA April 22, 2009 City of South San Francisco Redevelopment Agency 400 Grand Avenue South San Francisco, CA 94080 -3- TABLE OF CONTENTS I. INTRODUCTION.. ............................................................................. 1 ........................... II. DEFINITIONS ..............................................................................................................1 III. REPLACMENT HOUSING REQUIREMENTS .............................................................1 IV. PROJECT DESCRIPTION ........................................................................................... 2 V. RESIDENTIAL UNITS TO BE REMOVED AND REPLACED ...................................... 2 VI. GENERAL LOCATION OF HOUSING TO BE REHABILITATED ................................ 2 VII. FINANCING OF REPLACEMENT HOUSING .............................................................. 2 VIII. TIMETABLE FOR DEVELOPMENT OF REPLACEMENT HOUSING ......................... 2 IX. COMPLIANCE WITH ARTICLE XXXIV OF THE CALIFORNIA CONSTITUTION ....... 3 X. PROVISION FOR PUBLIC REVIEW AND COMMENT ................................................ 3 -4- I. INTRODUCTION This Replacement Housing Plan (the "Replacement Housing Plan") for 323 Miller Avenue ("Subject Property") has been prepared by the City of South San Francisco Redevelopment Agency ("Agency") pursuant to Section 33413.5 of the California Health and Safety Code. Section 33413.5 requires that, not less than 30 days prior to the execution of an agreement for the acquisition of real property, an agreement for the disposition and development of property, or an owner participation agreement, which would lead to the destruction or removal of dwelling units from the low-and moderate- income housing market, the Agency shall adopt by resolution a replacement housing plan. In addition, Section 33413.5 mandates that the Replacement Housing Plan shall include the following components: • The number of dwelling units housing persons and families of low- or moderate-income planned for construction or rehabilitation: • The general location of housing to be rehabilitated, developed or constructed pursuant to Section 33413; • An adequate means of financing such rehabilitation, development or construction; • The timetable for meeting the Replacement Housing plan's relocation, rehabilitation and replacement housing objectives; and • A finding that the replacement housing does not require the approval of the voters pursuant to Article XXXIV of the California Constitution or that such approval has been obtained: II. DEFINITIONS Very-Low-Income Household -Persons and families whose gross incomes do not exceed 50 percent of the area median income for San Mateo County adjusted for family size. III. REPLACEMENT HOUSING REQUIREMENTS Section 33413(a) of the California Health and Safety Code requires that whenever low- or moderate-income household dwelling units are destroyed or removed from the low- and moderate-income housing market as part of a redevelopment project which is subject to a written agreement with a redevelopment agency or where financial assistance has been provided by the agency, the agency shall, within four years of the destruction or removal, rehabilitate, develop, or construct, or cause to be rehabilitated, developed or constructed, for rental or sale to persons and families of low-or moderate- income, an equal number of replacement dwelling units which have an equal or greater number of bedrooms as those destroyed or removed units at affordable housing costs within the territorial jurisdiction of the agency. -5- All of the replacement dwelling units shall be available at affordable housing cost to persons in the same or lower income category (low, very low, or moderate), as the persons displaced from those destroyed or removed units. IV. PROJECT DESCRIPTION The Downtown Parking District owns three surface parking lots on the south side of the 300 Block of Miller Avenue (APNs 012-312-040, 050 and 060) ("District Property") and The Redevelopment Agency of the City of South San Francisco owns the residential duplex at 323 Miller Avenue (APN 012-312-070) ("Subject Property"). The Agency proposes to build on the Subject Property and District Property the Miller Avenue Parking Structure (the "Project"), a 4 '/2 story public parking structure with 256 parking spaces and 13,700 square feet of ground floor commercial space. The parking structure would be located in the Downtown Commercial (D-C) Zoning District and would provide a significant benefit to downtown businesses. V. RESIDENTIAL UNITS TO BE REMOVED AND REPLACED The Subject Property contains two one-bedroom apartments which will be removed or destroyed prior to construction of the Project. The apartments are currently vacant. One tenant voluntarily vacated the property shortly after the Agency's acquisition in December, 2006 and the other tenant was relocated in February, 2008 subject to a Relocation Plan dated December 14, 2007. Both tenants were Very Low-Income (<50% Area Medina Income) VI. GENERAL LOCATION AND NUMBER OF REPLACEMENT DWELLING UNITS TO BE CONSTRUCTED Mid-Peninsula will construct 106 dwelling units affordable to Very-Low-Income Households at 636 EI Camino Real ("Replacement Units"). VII. AFFORDABILITY AND FINANCING OF REPLACEMENT HOUSING The Agency will impose affordability covenants on all of the Replacement Units so that they remain affordable to Very-Low-Income Households in accordance with Health and Safety Code Section 33413. Per the California Community Redevelopment Law, the Agency must set aside 20% of its tax increment ("Housing Set-Aside Funds") from each redevelopment project area for the development of affordable housing. The Replacement Units will be funded with a combination of Agency Housing Set-Aside Funds and one or more of the following sources: City of South San Francisco Developer Housing Trust, San Mateo County Housing Endowment and Regional Trust, State of California Low-Income Housing Tax Credits and the State of California's HCD Infill Grant. VIII. TIMETABLE FOR DEVELOPMENT OF REPLACEMENT HOUSING The Replacement Unit project has a target construction start date of September 2009, prior to which time the two units on the Subject Property will be relocated or demolished. 2 -6- The Replacement Units will be completed with recorded affordability restrictions by the Summer of 2012. In no event, will the Replacement Units be completed later than four years after the destruction or removal of the apartments on the Subject Property. IX. COMPLIANCE WITH ARTICLE XXXIV OF THE CALIFORNIA CONSTITUTION Article XXXIV of the California Constitution requires voter approval of all low-rent housing projects that are developed, constructed or acquired by a public entity. Under Section 37001 of the California Health and Safety Code, the Replacement Unit project is not a "low-rent housing project" as defined in Section 2 of Article XXXIV of the California Constitution because the housing units will be developed to replace dwelling units previously or currently occupied by lower-income households. Therefore, the proposed replacement housing does not require the approval of voters pursuant to Article XXXIV of the California Constitution. X. PROVISION FOR PUBLIC REVIEW AND COMMENT In accordance with Health and Safety Code Section 33413.5, a draft of the Replacement Housing Plan has been made available for review and comment by the general public and other public agencies. ]229144.1 3 -~- o - ~ Redevelo jnent A enc p g y ° Sta Re c~z ~1~. _ff post IFOR DATE: May 13, 2009 TO: Redevelopment Agency Board FROM: Terry White, Director of Public Works SUBJECT: RESOLUTION AWARDING THE CONSTRUCTION CONTRACT TO C. OVERAA & CO. FOR THE MILLER AVENUE PARKING STRUCTURE PROJECT IN AN AMOUNT NOT TO EXCEED $8,421,500, APPROPRIATING $1,670,080 FROM REDEVELOPMENT AGENCY FUNDS FOR THE PROJECT, AMENDING THE 2008-2009 CAPITAL IMPROVEMENT PROGRAM BUDGET, AND REJECTING ALL BID PROTESTS AND ALL BIDS FOR THE BID ALTERNATIVES RECOMMENDATION It is recommended that the Redevelopment Agency Board adopt a resolution: (1) awarding the Miller Avenue Parking Structure Project ("Project") construction contract to C. Overaa & Co., c~ i Richmond, California, in an amount not to exceed $8,421,500; (2) appropriating $1,670,080 f~•om Redevelopment Agency Funds for the Project; (3) amending the 2008-2009 Capital Improvement Program Budget; and (4) rejecting all bid protests and bids for the bid alternatives. BACKGROUND/DISCUSSION The Miller Avenue Parking Structure Project is located at 329 Miller Avenue. The project will construct afive-story open-air concrete parking structure with 254 parking stalls and approximately 14,350 square feet of commercial and office space located at its base floor. This site is currently a surface parking lot consisting of 60 parking spaces. The project was advertised and on March 3, 2009, staff received six (6) valid bids in response. The lowest responsible bidder, based on the base bid, was C. Overaa & Co. of Richmond, CA. Below is a summary of all bids received: Engineer's Estimate $ 9,000,000.00 C. Overaa & Co. of Richmond $ 8,421,500.00 S.J. Amoroso of Redwood Shores $ 9,097,000.00 Howard S. Wright Constructors of Emeryville $ 9,300,676.00 Hathaway Dinwiddie Co. of San Francisco $ 9,601,000.00 BNB Builders, Inc. of San Mateo $ 9,981,842.00 Webcor Construction, L.P. of San Mateo $10,096,500.00 Staff Report Subject: A RESOLUTION AWARDING A CONSTRUCTION CONTRACT TO C. OVERAA & CO. FOR THE MILLER AVENUE PARKING STRUCTURE PROJECT, REJECTING ALL BIDS FOR THE BID ALTERNATIVES AND ALL BID PROTESTS, AND APPROPRIATING ADDITIONAL FUNDS Page 2 of 3 Staff has verified the low bidder's current contractor's license with the California State Licensing Board and found it to be in good standing and also contacted references provided. C. Overaa & Co. has completed parking structures for the following customers: Genentech, UCSF, Kaiser Permanente, Bay Area Rapid Transit, and Westlake Shopping Center. The installation of a photovoltaic system was included as an Alternative Bid Item; however, after reviewing the bids, staff determined the cost was too high and recommends rejecting all alternative bids. In the future, the photovoltaic system can bebid as astand-alone project in which prices could be lower and more favorable to the City. The parking structure has been designed to have the infrastructure installed for future photovoltaic systems. After posting the bid results, Howard S. Wright Constructors, Willis Construction Company, the San Mateo County Electrical Construction Industry (SMCECI), and the Plumber, Steamfitters and Refrigeration Fitters Local Union #467 (LU #467) submitted letters of protest and concern regarding the two apparent lowest bidders: C. Overaa & Co. and S.J. Amoroso. The City Attorney determined that the first three bid protests could be rejected (see attached), and the fourth protest from LU #467 (see attached) was resolved and withdrawn by the Union. Construction will take approximately one year. Two factors affect the issuance of the Notice to Proceed to the contractor. The first issue is the adjacent building located at 323 Miller Avenue purchased by the Redevelopment Agency, which will be demolished before the contractor can start grading the site. The second issue is that PG&E needs to underground the overhead utilities on 4tn lane before the construction of the building. After these two issues are addressed, staff will issue the Notice to Proceed to the contractor. FUNDING Shown below is the cost breakdown for the project budget: DESIGN /STUDIES (Previously Awarded) Watry Design, Inc. $1,250,000 Planning/Engineering Studies $ 294,000 TOTAL DESIGN /STUDIES COSTS $ 1,544,000 CONSTRUCTION C. Overaa & Co. Bid Amount $8,421,500 Construction Contingency (12%) $1,010,580 Construction Management Agreement $ 336,000 Special Inspections/Staff Administration $ 257,000 Utilities (PG&E relocation, AT&T, Cal Water) $ 285,000 Pre and Post Construction Monitoring $ 110,000 TOTAL CONSTRUCTION COSTS $10,420,080 TOTAL PROJECT COSTS $11,964,080 Staff Report Subject: A RESOLUTION AWARDING A CONSTRUCTION CONTRACT TO C. OVERAA & CO. FOR THE MILLER AVENUE PARKING STRUCTURE PROJECT, REJECTING ALL BIDS FOR THE BID ALTERNATIVES AND ALL BID PROTESTS, AND APPROPRIATING ADDITIONAL FUNDS Page 3 of 3 Funding for this project is included in the City of South San Francisco's 2008-2009 Capital Improvement Program (CIP/72-13236-0770) in the amount of $10,294,000. There is currently $8,750,000 in the CIP budget and staff requests that the Board appropriate additional funds in the amount of $1,670,080 from the Redevelopment Agency funds for the construction of the Miller Avenue Parking Structure and amend the 2008-2009 Capital Improvement Program Budget. CONCLUSION Award of the construction contract to C. Overaa & Co. of Richmond, California will allow for the construction of the Miller Avenue Parking Structure to serve the downtown area businesses. By: ~% Approved. "~ Terry Whi ~ M. Nagel Director of blic Works Executive Director Attachment: Resolution Bid Summary Response letters to bid protests Letter withdrawing protest (LU #467) sb/hl/rr 1231.437.1 RESOLUTION NO. REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA RESOLUTION AWARDING THE CONSTRUCTION CONTRACT TO C. OVERAA & CO. FOR THE MILLER AVENUE PARKING STRUCTURE PROJECT 1N AN AMOUNT NOT TO EXCEED $8,421,500, APPROPRIATING $1,670,080 FROM REDEVELOPMENT AGENCY FUNDS FOR THE PROJECT, AMENDING THE 2008-2009 CAPITAL IMPROVEMENT PROGRAM BUDGET, AND REJECTING ALL BID PROTESTS AND ALL BIDS FOR THE BID ALTERNATIVES WHEREAS, staff issued a Notice Inviting Bids for construction of the Miller Avenue Parking Structure Project ("Project") and on March 3, 2009, received six construction bids; WHEREAS, C. Overaa & Co. ("Overaa") of Richmond, California, was the lowest responsible bidder; WHEREAS, staff recommends rejecting all bid protests and bids for the bid alternatives, and recommends awarding the Project contract to Overaa in the amount of $8,421,500; and WHEREAS, pursuant to Public Contract Code Section 20166, a public entity retains the discretion to reject all bids it receives on a given project; and WHEREAS, the Project is included in the City of South San Francisco's 2008- 2009 Capital Improvement Program (CIP) and staff requests appropriating additional funds in the amount of $1,670,080 from the Redevelopment Agency funds to the Miller Avenue Parking Structure Project and amend the CIP budget. NOW, THEREFORE, BE IT RESOLVED, that the Redevelopment Agency of the City of South San Francisco that the Agency hereby: 1. Awards the construction contract to C. Overaa & Co. of Richmond, CA in an amount not to exceed $8,421,500, conditioned on Overaa's timely execution of the Project contract and submission of all required documents, including but not limited to, executed bonds, certificates of insurance, and endorsements, in accordance with the Project documents. 2. Appropriates $1,670,080 from Redevelopment Agency funds for the Project and amends the CIP budget. 3. Rejects all bids for the bid alternatives and all bid protests. -1- 4. Authorizes the Executive Director to execute the contract on behalf of the Agency Board upon timely submission by Overaa of the signed contract and all other required documents, subject to approval by the Agency Counsel. * ~ 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 2009 by the following vote: AYES: NOES: ABSTAIN: ABSENT: 1231772.1 ATTEST: City Clerk _2_ a cm G v 0 ~, ~? 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Emeryville, CA 94662 510-903-2054 phone 510-903-2066 fax California Contractor's License #860938 March 12, 2009 City of South San Francisco Sam Bautista, P.E. 315 Maple Avenue South San Francisco, CA 94080 (f~50) 829-6689 -fax RE: Miller Avenue Parking Structure Sid -March 3~d, 2009 Subject: Bid Protest Dear Mr. Bautista, RECEI~D MAR 13 2009 BY•INGI[~?ERAIaDMSION Howard S. Wright Construction has reviewed the bid submissions for the two apparent low bidders for the Miller Avenue Parking Structure Project. During our review we noticed that both Contractors may have overlooked the proper listing of significant portions of work, thereby not Hsfing all the Subcontractors that will exceed one-half 4fane-percent of their bib as required per the Calitornla Public Contract Code Sections 4100-4114. The apparent low bidder seems to have nrrtitted listing Subcontractors for Landscaping, Concrete Formwork, Storefront System, Overhead [}dots, and signage. All of these Scopes of Work were equal to or greater than one-half of one-percent of the bid value. 1'0 our knowledge, the apparent low bidder has not self-performed these scopes of work in the past. Therefore, their bid submission should be considered In violation to the Public Contract Code. The apparent second low bidder seems to have omitted listing Subcontractors for Landscaping, Concrete Place & Fln(sh, Storefront System and signage. Ali of these Scopes of Work were equal to or greater than one-half ofone-percent of the bid value. To our knowledge, the apparent second low bidder has not self-performed these scopes of work in the past. Therefore, their bid submission should be considered in violation to the Public Contract Code, Please consider this letter Howard S. Wright Constructor's formal Bid Protest Notice. We believe that the errors in the apparent two lowest bidder's submissions provide an unfair advantage and do not comply with Public Contract Code. Sincerely, ~~ u<nson Heine - Sr. Project Manager Cc: Bob Hahn, P.E.(SSF), Steve Mattas (SSF Attorney), Scott Lee (FtSW Regional Manager/V.P.), flle (HSW) seattle ~ portland o sacramento ~ san francisco ., los angeles ~ phoenix -5- CITY COUNCIL 2009 OFFICE OF KARYL MATSUMOTO, MAYOR THE CITY ENGINEER MARK N. ADDIEGO, VICE MAYOR RICHARD A. GARBARINO, COUNCILMEMBER PHONE (650) 829-6652 PEDRO GONZALEZ, COUNCILMEMBER KEVIN MULLIN, COUNCILMEMBER FAX (650) 829-6689 BARRY M. NAGEL, CITY MANAGER March 17, 2009 VIA FAX AND US MAIL Vincent Heine Howard S. Wright Constructors 5858 Horton St., Suite 170-A Emeryville, CA 94608 Fax: 510-903-2066 Re: Response fo Bid Profesf for Miller Ave Parking Structure Projecf Dear Mr. Heine: This letter is sent on behalf of the City of South San Francisco ("City") in response to your correspondence dated March 12, 2009, and received March 13, 2009, regarding a bid protest by Howard S. Wright Constructors ("HSW") on the Miller Ave. Parking Structure Project. In your letter, you contend that the two apparent low bidders, Overaa and S.J. Amoroso, submitted unresponsive bids on the basis that incomplete bids were submitted absent a listing of subcontractors for work that will exceed one-half of one percent of their total bid. We have carefully reviewed your bid protest and consulted with our City Attorney's office. Upon review, we have determined that the apparent low bidders' bids are responsive and hereby reject your bid protest. Specifically, you inferred that because neither of the two apparent low bidders had performed certain specified trades in the past, that they would be unable to perform them for purposes of this project, and that their failure to list subcontractors for the specified trades thus made their bids unresponsive. However, Public Contract Code Section 4106 provides that if a prime contractor fails to specify a subcontractor for such work, the prime contractor agrees that he or she is fully qualified to perform that portion him or herself and must execute that performance. The fact that neither bidder has performed such the specified trades in the past is not dispositive here. The failure to list subcontractors does not invalidate a bid; instead, it simply means that the prime contractor is responsible for performing those tasks him or herself. As such, the failure to specify subcontractors for the trades you identified does neither gives the apparent lowest two bidders an advantage or benefit allowed to other bidders, nor renders their bids non- responsive. While we do not agree that there is a bid irregularity here, to the extent that it may exist, public entities have same discretion in interpreting and enforcing their bidding rules, including the right to waive inconsequential bid irregularities. The court in McM Construction, Inc. v. City and County of San Francisco ("McM") (1998) 66 Cal.App.4th 359 at 369 held that the rule of strict compliance with bidding requirements does not preclude a contracting entity from waiving inconsequential deviations, providing: "... [TJhe deviation must -6- ADDRESS:315 MAPLE AVENUE, SOllTH SAN FRANCISCO, CA 94084 t"rennan•nn txrnr~~i enT~~ceuxuni.~ric~n ~~ nenc-, Vinson Heine, HSW Constructors March 17, 2009 Page 2 be capable of facilitating corruption or extravagance, or likely to affect the amount of bids ..." Id. at 370. This affirms the court's analysis two years earlier in Ghiloffi Consfrucfion Co. v. Cify of Richmond (1996}, 45 Cal.App.4th 897, 209: [I]t is further well established that a bid which substantially conforms to a call for bids may, though it is riot strictly responsive, be accepted if the variance cannot have affected the amount of the bid or given a bidder an advantage or benefit not allowed other bidders or, in other words, if the variance is inconsequential. Finally, staff has taken your bid and bid protest seriously. The City is committed to providing all bidders a fair opportunity to bid on and be awarded its numerous projects. It is in the City's best interest to have a robust bidding environment. To that end, staff has worked and continues to work diligently towards making sure all bids are handled consistently and fairly. The City reiterates its position that your bid protest on the Miller Avenue Parking Structure Project is rejected, but encourages HSW to consider bidding on future projects. Please contact ~me if you have any questions. Very truly yours, Ra azavi City Engineer City of South San Francisco cc: Sam Bautista, Senior Civil Engineer 1211121.1 -~- ~• ~ o~,.,~~~~' S~4N MATED COUNTY =y ~ ~~ ELECTRICAL CONSTRUCTION INDUSTRY r~y+ . ~o. PREVAILING IMAGE COMPLIANCE DIVESION .~. ......,. s f %~~ ~ ~~~~ March 10, 2009 City of South San Francisco - City flalI Annex 315 Maple Street South San Francisco, Ca. 94080-3719 Attn: Sam Bautista R.e: Bid Protest: Miller Avenue Parking Structure MAR ~. ~ 2009 BY ~11'GE~IG DI'~S~ON GC Low Bidder - C. Overaa & Company License #106793 To Whorn It May Concern: My Office provides Contract Compliance for the San Mateo County Electrical Construction Industry (SMCECI). SMCECI is a labor/management cooperative working in the interest of over 30 C-10 electrical contractors and some 1200 electrical workers throughout San Mateo County. The duty of my office is to insure fairness and lawful bidding on all public works prevailing wage prof ects. Overaa & Co. appears to be the low bidder an the Miller Avenue Parking Structure project. There are several reasons tliat we feel that C. Overaa & Co: has acted as a non- responsiblebidder and should thezefore have their bid excluded. As a repxesentative of the San Maleo Electrical Industry our concern is that this contractor is not a responsible bidder for the following reasons. First, on their sub- contractors list they did not List a tontractar to perform the Photo-Voltaic portion of the contract, It appears that all of the tither General Contractors saw fit to do so. C. Overaa B~ Co. is bound by the California Public Contracts Code to disclose at bid time all sub- contractors that they intend to use on a project. There is no contractor on their sub list capable of performing this type of work and unless they intend to self perform this work they should be found in violation. It should be Hated that C. Overaa & Co. has not demonstrated that they could self perform this type of work in the past. Secondly, C. Overaa & Co.'s bid numbers seem ttf be at odds with the other bids received. 'T'heir base bid number is $650,000.00 Tess than the next lowest bid. Their bid number is anywhere from $620,000.00 to $850,000.00 higher than the other bid numbers for the Photo-Voltaic alternate. This is odd considering that they have not even listed a contractor to do that work. As well, C. Overaa & Co. lists the electrical portion of the work at 5%. 'The other General Contractors list the electrical portion at close to 7%. Overaa's numbers do seem to be in alignment with the scope of the work. We strongly encourage you to review these issues as they pertain to this contractor as a responsible bidder. The Public Contract Code defines a `responsive bidder' in section 1 I03, as a `bidder who has demonstrated the attribute of trustworthiness as well as quality, fitness, capacity and experience to satisfactorily perform the public workr X701 LESLIE STREET ~ SAN MATED, CALfFORN1A 94402 ~ TELEPHONE {650) 5?4-5239 ~ FAX {6501574-1408 0 -~-73 project'. We feel that they may be unfamiliar with the California Labor Code as it pertains to public works projects and ilI-equipped to handle their responsibilities as a~ public works contractor. A.ecordiuigly, as it is the prerogative of Awarding Agency to find this contractor non responsible and to replace with the next lowest responsible- bidder General Caxttractor. It is our sfrong desire to see that all electrical work performed in San Mateo County meets the standards set forth in the California Labor Code as well as those of the electrical industry. We provide this service not only to the industry but the awarding agencies as well. If you have any questions, please contact me at your earliest convenience. Sincerely, Sohn Fitzpatrick Compliance Officer SMCECI 1701 Leslie St. San Mateo, Ca. 94402 Phone (650) 574-5239 Fax (650) X74-6860 CC: Karyl Matsumoto, Mark Addiego, Rich Garbarino, Pedro Gonzalez, Kevin Mullen C. Overaa & Co., Ball Nack _ -9- OFFICE OF THE CITY ENGINEER PHONE (650) 829-6652 FAX (650) 829-6689 CfrY COUNCIL 20Q9 KARYL MATSUMOTO, MAYOR MARK N. ADDIEGO, VICE MAYOR RICHARD A GARBARINO, COUNCILMEMBER PEDRO GONZALEZ, COUNGILMEMBER KEVIN MULLIN, COUNCILMEMBER BARRY M. NAGEL, CITY MANAGER April 23, 2009 VIA US MAIL John Fitzpatrick, Compliance Officer San Mateo County Electrical Construction Industry Prevailing Wage Compliance Division 1701 Leslie Street San Mateo, CA 94402 Re: Response to Bid Protest for MillerAvenue Parking Structure Project Dear Mr. Fitzpatrick: This letter is sent on behalf of the City of South San Francisco ("City") in response to your correspondence dated March 10, 2009, and received March 12, 2009, regarding a bid protest by the San Mateo County Electrical Construction Industry on the Miller Avenue Parking Structure Project ("Project"). In your letter, you contend that Overaa & Co. ("Overaa"), the apparent low bidder on the Project, submitted a non-responsible bid on the basis that it: (1) did not list a contractor to perform the Photo-Voltaic portion of the contract; (2) had an overly low base bid amount; and (3) listed the electrical portion of the work at 5%, while the other General Contractors listed that portion at close to 7%. We have carefully reviewed your bid protest and consulted with our City Attorney's office. Upon review, we have determined that Overaa's bid is responsive and responsible and hereby rejects yol,r bid protest. The bid form for the Project did not require a separate listing of subcontractors for altemate work because the award was made on the base bid only. Since the Photo-Voltaic portion of the contract is alternate work, an alleged defect in the sublisting for such work has no bearing on the validity of the bid. The City has also determined that Overaa's low base bid amount relative to other bidders and listing of the electrical portion of the work at 5% fails to render its bid either non-responsible or unresponsive. While we do not agree that there is a bid irregularity here, to the extent that it may exist, public entities have some discretion in interpreting and enforcing their bidding rules, including the right to waive inconsequential bid irregularities. The court in McM Construction, Inc. v. City and County of San Francisco ("McM") (1998) 66 Cal.App.4th 359 at 369 held that the rule of strict compliance with bidding requirements does not preclude a contracting entity from waiving inconsequential deviations, providing: "... [TJhe deviation must be capable of facilitating corruption or extravagance, or likely to affect the amount of bids ..." ld, at 370. -10- John Fitzpatrick April 23, 2009 Page 2 This affirms the court's analysis two years earlier in Ghilofti Consfrucfion Co. v. City of Richmond (1996), 45 Cai.App.4th 897, 209: [I]t is further well established that a bid which substantially conforms to a call for bids may, though it is not strictly responsive, be accepted if the variance cannot have affected the amcunt of the bid or given a bidder an advantage or benefit not allowed other bidders or, in other words, if the variance is inconsequential. Finally, staff has taken your bid and bid protest seriously. The City is committed to providing all bidders a fair opportunity to bid on and be awarded its numerous projects. It is in the City's best interest to have a robust bidding environment. To that end, staff has worked and continues to work diligently towards making sure all bids are handled consistently and fairly. Please contact me if you have any questions. Very truly yours, D,,. D~,~.,..~ i~ay i~a~avi City Engineer City of South San Francisco cc: Sam Bautista, Senior Civil Engineer 1219964.1 -11- City of South San I=rancisoo 3 3 5 Maple eve. South San Francisco, CA 94083 Attn: San Bautista Rc#: Miller Ave. Parking Topic: GFRC sub listing Spec 03490 Dear Mr. Bautista; a3-os-o~ Thank you for your tune this afternoon to discuss the GFRC subcontractor listings of the two low General Contractor for your project. We are a GFRC subcontractor who is PCB cerd~ted~per the specification requirements for the GFRC scope For this job. When we bid on these srrrall jobs that have this requirements prior to bid we scud the General Contractors our scope letter and bring to thou attention the job requirements for our trade so they have the knowledge to use the appropriate sub on I~id day. 1 have talked to two GC's who felt the value of using a PCI certified sub to bid the ,job. We feel that as an owner you should require the low GC to use a PCI sub for the Cr1=RC per the Specs. 7 have attached tour scope letter tltat was sent to tl~e GC's prior to bid. l;.oolcing forward to hearing tram yott reg;~rding this issue. Sincerely yours. Willis Construction Co. f~aui .I. Goodman C: hief.Fstimatar 22131 SAN JUAN HIGHWAY -SAN JUAN BAUTISTA _ 12 _~45 ~ LIC. NO. 398748 etie ~ iia~wnn• 1 r7n 1 rnr71•1n1PB -Nllt ~hiedainn una+nn~+enn•~ e~~~iu uu..~ nn•n~ nn y~ wn CfIY COUNCIL 2009 April 23, 2009 VIA US MAIL OFFICE OF THE CITY ENGINEER PHONE (650) 829652 FAX (65D) 829-6689 Paul Goodman Willis Construction Co., Inc. 2261 San Juan Highway San Juan Bautista, CA 95045 KARYL MATSUMOTO, MAYOR MARK N. ADDIEGO, VICE MAYOR RICHARD A. GARBARINO, COUNCILMEMBER PEDRO GONZALQ, COUNCILMEMBER KEVIN MOWN, COUNCILMEMBER BARRY M. NAGEL, CrfY MANAGER Re: Response fo Bid Protest for Mi1lerAvenue Parking Structure Project Dear Mr. Goodman: This letter is sent on behalf of the City of South San Francisco ("City") in response to your correspondence dated March 5, 2009, regarding a bid protest by UVillis Construction Co., Inc. ("Willis") on the Miller Avenue Parking Structure Project ("Project"). In your letter, you contend that the two apparent low bidders, Overaa and S.J. Amoroso, submitted unresponsive bids on the basis that: (1) the bid specifications for the Project require that the subcontractor for all Glass Fiber Reinforced Precast Concrete (GFRC) work be PCI-certified; and (2) the GFRC subcontractor selected by the two apparent low bidders is non-PCl-certified. We have carefully reviewed your bid protest and consulted with our City Attorney's office. Upon review, we have determined that the apparent low bidders' bids are responsive and hereby reject your bid protest. Specifically, we read the Project's bid specifications to require only that the GFRC manufacturer be PCI- certified. These requirements do not apply to the designated subcontractor for the GFRC installation, so long as the GFRC is purchased from a PCI-certified manufacturer, which the low bidder will be required to do. Staff has taken your bid and bid protest seriously. The City is .committed to providing all bidders a fair opportunity to bid on and be awarded its numerous projects. It is in the City's best interest to have a robust bidding environment. To that end, staff has worked and continues to work diligently towards making sure all bids are handled consistently and fairly. The City reiterates its position that your bid protest on the Miller Avenue Parking Structure Project is rejected, but encourages Willis to consider bidding on future projects. -13- Willis Construction Co., Inc. April 23, 2009 Page 2 Please contact me if you have any questions. Very truly yours, Ray azavi City Engineer City of South San Francisco cc: Sam Bautista, Senior Civil Engineer Terry White, Public Works Director 1219864.1 -14- hLUMBERS, STEAMFITTERS AND REFRIGERATIOI~~IAL a~union 46~ ~oG ..~ a~ ~ .o -;i `y p• •± • • ~ ~~fr79eratioo~~~~~` March 10, 2009 LOCAL UNION #4.67 1519 ROLLINS ROAD BURLINGAME, CALIFORNIA 94010 (650) 692-4730 STEVEN S. POBUTA PRESIDENT MARK BURRI BUSINESS AGENT I GARY J. SAUNDERS BUSINESS MANAGER FINANCIAL SEC.•TREAS. Sam Bautista Engineering Division of Public Works City of South San Francisco 315 Maple Avenue South San Francisco, CA 94080 RE: Miller Avenue Parking Garage Structure Bid Results Cal Pacific Plumbing Systems of San Francisco Dear Mr. Bautista: MIKE SWANSON BUSINESS AGENT 11 MAR 11 2009 ~~:~~~~n~sioN I provide contract compliance services for the Plumbers, Steamfitters, & Refrigeration Fitters Local Union 467 throughout San Mateo County. I work for some 1300 pipe trades workers throughout San Mateo County and numerous local plumbing and piping contractors who employ them. My responsibility is to ensure fairness and lawful bidding practices on public works prevailing wage projects so as to provide a level playing field. I reviewed the Miller Avenue Parking Garage Structure bid results you referred me to online and called the plumbing contractors I represent who bid the project. I was disappointed to find out that the contractors I represent, at least two of which are located in the City of South San Francisco, submitted competitive prices but were not listed by the two lowest prime bidders. At least two of the lowest prime bidders listed Cal Pacific DI. "71~ing Syste;;;~ of van Francls^a us their plurrth,ng ccr?trGCtor. In researching Cal ~ iu~ Pacific Plumbing Systems I found they claim to be exempt from having to carry workers' compensation insurance (see the attached license detail from the California State License Board website). In order to be considered exempt, Cal Pacific Plumbing Systems certified they have no employees. My concern is that because Cal Pacifc Plumbing Systems has no employees, they will not be able to safely and adequately complete the Miller Avenue Parking Garage project due to its size, scope, and schedule. Their history of being exempt from workers' compensation insurance indicates that they have no core personnel which raises question as to where they'll get qualified plumbers to complete the project. They also do not have record of having contributed to any established apprenticeship program. Section 1777.5 of the California Labor Code states that only apprentices in training under "approved apprenticeship standards" may be employed on public works projects. California Labor .~ X61 - 15 - ~ Page 2 March 10, 2009 Code also requires 1 hour of apprentice labor to every 5 hours of journeyman labor on public works projects. Please review these matters as they pertain to this contractor as a "responsible bidder". The Public Contract Code defines a "responsible biddern in section 1103, as "a bidder who has demonstrated the attribute of trustworthiness as well as quality, fitness, capacity and experience to satisfactorily perform the public works project." 1 suspect Cal Pack Plumbing Systems is unfamiliar with the California Labor Code as it pertains to public works projects and ill-equipped to handle their responsibilities as a public works contractor. For these reasons, I urge you to declare Cal Pacific Plumbing Systems a "non- responsible bidder" and respectfully request you require a substitution or re-bid. It's our strong desire to see all plumbing work performed in San Mateo County meet the standards set forth in the California Labor Code as well as those of the plumbing industry. I provide this service not only to the plumbing and piping industry but to awarding agencies as -well. Should you require a substitution or re-bid, I assure you the local plumbing contractors and plumbers I represent will provide fair pricing and not raise any of the aforementioned concerns. Contact me anytime if you have questions or concerns. Best regards, Mark Burri Representative CC: Karyl Matsumoto, Mark Addiego, Kevin Mullin, Pedro Gonzalez, Rich Garbarino, Bill Nack of the San Mateo County Building Trades -16- ~1~.,,~ a L,~~„~~ ~, ~~.,,1,~ u„},,vvau,oii, onic~}rcr~uu l~Jl rcegisis-anon... nttp://wwwl.cstb.ca.gov/UI1t1ne5ervices/CheckLicense/LicenseDetail.. Department of Consumer Affairs ~~~~r~+~tc~r~ ~t~~~ La~~~~~~~~~~rd ~:~~.~: Contractor's License Detail - License # 924244 +~ DISClAIIV~R: A license status check provides information taken from the CSLB License database. Before relying on this information, you should be aware of the following limitations. ••%~ CSLB complaint disclosure is restricted by law (8&P 7124.6). if this entity is subject to public complaint disclosure, a link for conplaint disclosure will appear below. Click on the link or button to obtain complaint and/or legal action information. --» Per B&P 7071.17, only construction related civil judgments reported to the CSLB are discbsed. ••» Arbitrations are not listed unless the contractor faits to corrpty with the terms of the arbitration. -•» Due to workload, there may be relevant information that has not yet been entered onto the Board's license database. License Number: 924244 Extract Date: 03/10/2009 HYDRA VENTURES INC dba CAL PACIFIC PLUMBING SYSTEMS Business Information: 87 LOOMIS STREET SAN FRANCISCO, CA 94124 Business Phone Number: (619) 438-3418 Entity: Corporation Issue Date: 10/2812D08 Expire Date: 10/31/2010 License Status: This license is current and active. All information below should be. reviewed. CLASS DESCRIPTION Classifications: C36 PLUMBj(V~ CONTRACTOR'S BOND This license filed Contractor's Bond number SC6369343 in the amount of $12,500 with the bonding company AMERICAN CONTRACTORS INDEMNITY COMPANY. Effective Date: 03/02/2009 Bonding: Contractor's Bonding_Hist~ BOND OF QUALIFYING INDIVIDUAL 1. The Responsible Managing Officer (RMO) ROBERT CHI LO certified that he/she owns 10 percent or more of the voting stock/equity of the corporation. A bond of qualifying individual is not required. Effective Date: 10/28/2008 This license is exempt from having workers compensation insurance; they certified that they have no employees at this time. Workers' Compensation: Effective Date: 08/13!2008 Expire Date: None Personnel listed on this license (current or disassociated) are listed on other licenses. ~gr7ditign~.QttZ~.~ ~ f'rjv~.~y_Policy. Copyright ©2009 State of California -17- ,f, PL~)MBERS, STEAMFITTERS AND REFRIGERATION FITTERS LOCAL UNION #467 Ga~union 46~ • J, 1519 ROLLINS ROAD STEV E ESD POBUTA ~~ ,.... ' k" ~ BURLlNGAME, CALIFORNIA 9d010 3 .Q ..., 16501692-4730 MARK BURRI E ' ~ BUSINESS AGENT I i y GARY J. SAUNDERS ~ BUSINESS MANAGER MIKE SWANSON \ ~ _ n~y FINANCIAL SECrTREAS. BUSINESS AGENT II April 24, 2009 Sam Bautista Engineering Division of Public Works City of South San Francisco 315 Maple Avenue So. San Francisco, CA 94080 RE: Miller Avenue Parking Garage Structure Bid Results Cal Pacific Plumbing Systems of San Francisco Dear Mr. Bautista: In reference to our letter of March 10, 2009. Plumbers and Steamfitters Local 467 hereby withdraws it's protest of the possible award of the plumbing subcontract for the Miller Avenue Parking Garage to Cal Pacific Plumbing. Thank you for your response to our concerns. Sincerely, ~- Gary Saunders Business Manager GS:dm :, ... .. -18- ., o - ~ Redevelo InentA enc p g y J Sta c'4LI ~~~- ff Re opt Fo~. p DATE: May 13, 2009 TO: Redevelopment Agency Board FROM: Terry White, Director of Public Works SUBJECT: RESOLUTION AWARDING A CONSTRUCTION MANAGEMENT AGREEMENT TO RUDOLPH AND SLETTEN, INC. FOR THE MILLER AVENUE PARKING STRUCTURE PROJECT RECOMMENDATION It is recommended that the Redevelopment Agency Board adopt a resolution awarding a construction management agreement to Rudolph and Sletten, Inc. of Redwood City, California, for the Miller Avenue Parking Structure Project in an amount not to exceed $280,000. BACKGROUND/DISCUSSION The Miller Avenue Parking Structure is afive-story, post tensioned, concrete parking structure with ground level office and future commercial tenant improvement space totaling just over 100,000 square feet. The structure is "split level" with the vehicle driveway entrance connecting to the building's second level located on the uphill (west) side of Miller Avenue. This project is unique in its proximity to the City of South San Francisco's public and neighboring private residences. Rudolph and Sletten will ensure detailed planning and execution by the General Contractor that will be required for a safe, well-run project and necessary for it to be delivered on time and on budget. Staff advertised a Request for Proposal (RFP) on January 23, 2009. Staff received nineteen (19) proposals and interviewed the top seven (7) firms: Faithful + Gould, Project Management Advisors, Inc., Vanir Construction Management, Inc., Turner Construction Company, Nova Partners, Inc., Rudolph and Sletten, Inc., and Team Build Project Management. After reviewing the submitted proposals, staff recommends selecting Rudolph and Sletten, Inc. to undertake the project. Rudolph and Sletten, Inc. was ranked highest based on their proposal, project understanding, qualifications, and experience with structures of this type. Rudolph and Sletten, Inc. has extensive construction management experience with other public agencies such as the City of San Jose and the City of Mountain View. The construction management agreement includes management of the contractor/subcontractor activities, scheduling, change orders, progress reports, payments, and compliance with plans and specifications. Furthermore, Rudolph and Sletten Inc., has worked closely with Watry Design, Inc., the architect for the Miller Avenue Parking Structure, on similar projects. Staff Report Subject: RESOLUTION AWARDING A CONSTRUCTION MANAGEMENT AGREEMENT TO RUDOLPH AND SLETTEN, INC. FOR THE MILLER AVENUE PARKING STRUCTURE PROJECT. Page 2 of 2 FUNDING Funding for this project is included in the City of South San Francisco's 2008-2009 Capital Improvement Program (CIP/ 72-13236-0770) and sufficient funds are available. Shown below is the cost breakdown for the project: Construction Management and Inspection Services $280,000 Contingency 20% $ 56,000 Total Project Budget $336,000 CONCLUSION Award of the Construction Management Agreement with Rudolph and Sletten Inc., of Redwood City, California, will ensure the construction of the Miller Avenue Parking Structure is performed according to the approved plans/specifications and Cal OSHA requirements. Terry ~ e Director o ublic Works Approved ~ B M. Nagel Executive Director Attachment: Resolution Rudolph &Sletten Proposal and Fee Schedule sb/hUrr RESOLUTION NO. REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA RESOLUTION AWARDING A CONSTRUCTION MANAGEMENT SAGREEMENT TO RUDOLPH AND SLETTEN, INC. FOR THE MILLER AVENUE PARKING STRUCTURE PROJECT IN AN AMOUNT NOT TO EXCEED $280,000 WHEREAS, in December of 2008, staff issued a Request for Proposals for construction management services for the Miller Avenue Parking Structure Project ("Project"); and WHEREAS, staff received nineteen proposals and interviewed the top seven firms; WHEREAS Rudolph and Sletten, Inc. was the highest ranked based on the superiority of their proposal, Project understanding, qualifications, and extensive experience in construction management for parking structure projects; and WHEREAS, staff recommends awarding the construction management agreement for the Project to Rudolph and Sletten, Inc. in an amount not to exceed $280,000; and WHEREAS, funding for the project is included in the City of South San Francisco's 2008-2009 CIP and sufficient funds are available. NOW, THEREFORE, BE IT RESOLVED, by the Redevelopment Agency of the City of South San Francisco that the Agency hereby: 1. Awards the construction management agreement for the Miller Avenue Parking Structure Project to Rudolph and Sletten, Inc. of Redwood City, CA in an amount .not to exceed $280,000, conditioned on its timely execution of the Project contract and submission of all required documents, including but not limited to, executed bonds, certificates of insurance, and endorsements, in accordance with the Project documents. 2. Authorizes the Executive Director to execute the agreement on behalf of the Redevelopment Agency of the City of South San Francisco upon timely submission of the signed contract and all other required documents, subject to approval by the Agency Counsel. -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 _ 2009 by the following vote: AYES: NOES: ABSTAIN: ABSENT: 1231928.1 ATTEST: City Clerk -2- S~GOB,possrgD eao ~g a ~J ~ ~ ~ AND ~ ~d i ~ ~ lrv7• GE NE BAL AND ENOFNEEAENG CONTYiACT08.8 Miller Avenue Parking Structure -Construction Manager Scope 4-14-0~ Project Scope The 1VIiller Avenue Parking structure is afive-story, post tensioned, concrete parking structure with ground level office and future commercial tenant improvement space totaling just over 100,000 square feet. The structure is "split level" with the vehicle driveway entrance connecting to the building's second level located on the uphill (west) side of Miller Avenue. The Northern elevation exterior facade projects an image of, and matches, the typical height of a three-story structure. This project is .unique in its proximity to the City of South San Francisco's public and neighboring private residences. Rudolph and Sletten will ensure detailed planning by the General Contractor, and will be required for awell- run and safe project and necessary for it to be delivered on time and on budget. Contract Administration A great deal of pre-planning is required for this type of project. Rudolph and Sletten will identify all required submittals and serve as task master to ensure all criteria is submitted by the contractor, of high quality and routed appropriately to the City. Our experience in construction will ensure issues (plans, RFIs, submittals, etc.) are properly routed and shared with the design team and the City. In addition Rudolph and Sletten will: Schedule Management • Manage the preparation and coordination of the project master schedule • Obtain schedules and work with General Contractor to meet master schedule • Manage the updated rolling schedule and milestone schedule • Review and .analyze Monthly-schedule updates • Prepare CM daily job diaries and. special reports • Review contractor daily reports for .accuracy • Obtain periodic progress photographs 1600 SEAPORT BOULEVARD $IIITE 350 REDWOOD ~,'ITY, C,A 94063-5575 PaoNE: 650 216-3600 FAx: 650 599-9030 z:caNS~ - 3 -oss Rudolph & Sletten, Inc. Miller Avenue Parking Structure Construction Manager Proposal 4/14/09 • Monitor and ensure proper community outreach and notification Review General Contractors Safety Program • Review Jobsite Safety program • Review the General Contractor's shoring, form work, delivery plans, etc., to ensure-General Contractor's protective measures for the public are included at every stage of construction • Review Contractor's Traffic Control Safety plan and. practices ® New task kickoff safety review and periodic onsite review of general contractors own plan. City's Project Manger • Conduct preconstruction conference • Conduct weekly Owner/Architect/Consultant meetings and distribute minutes • Assist in obtaining building and other agency permits • Coordinate building department and utility agency inspections • Arrange and manage third party special inspections • Coordinate final inspection- (Owner, Architect, Consultants, City, etc.) Construction Document Administration • Review contractor prepared submittal and shop drawing checklists • Manage submittal and shop drawings process • Process Track and work will all involved Parties to resolve any contractor RFI's • Monitor and ensure accuracy of Contractors Daily reports, logs, and correspondence • Prepare Monthly reports for City Manager (cost update, schedule update, progress work) • Review punchlist • Review as-built drawings and obtain operations and maintenance manuals Billing and Cost Control • Establish cost control system and report format • Review schedule of values and establish progress billing format • Review progress billings .. .... _. . . • Monitor and review changes. and clarifications • Monitor progress of work and manpower productivity rates. RUDOLPH AND SLETTEN -4- <~„ _, ~.~= , m `° o `° O N r . p. r` N ~ ~ ~ A = ~ Eq ~ f9 + i f c9 N N O /h ~ O O W m O1 ~ ~ ti ~ ~ .;` ~ ~ th ~ O O O . ~ .' ~, ~ ~ ~ ' O ~ ~ cq rD M O ° :'. .C O W m m ~ FH t • ` ~ jg to : %; ~ r ~ N O ~ O O m ::. ~ ~ ti o o ~ tl} -. ,, H , _+ O N O MO .: i•' '~ ~ ~ ~ ~ ~ O e9 h 0 , ~ ~ + i.f y ~ O ~ ~ N O c7 O W ~ O . . ,S', m ~ ~ _ ~y ~ ~ ~ t9 '~ '~ ~7 tD N O ~ ° - ~ " O O fD O O _ _ fD ~ ~ :: m ~ M n ~D N O ~ O O ap 'C ~ rD ~ r ~ ~ ~ 0 0 . ~ ~ W m ' yti m'A m ~ us .;; ;t- ~ ~'- O O ~ -, ~> [D ~ r :' 1~ O O N O N ° ~ A _ r •- o o ro ~ ~ ~ ,• ~ _r G~ i w+ 'y n ~ m N O a1 L ~ N ' ~ O O ~ Ol Ol m N r -: $ ~ ~ i» r. ~ ^ m N O p ~ _ ~ o O O L rp 1A h ~ a ~~. ~ ~ ~ GI ~' ':( °~ ~ co cD '- ~, N O O 0 T I Opi O 0 fl1 .. ~ O N 0 O 0 0 L ~ ti~ ':•_ ~ M ~ 7 ~ f19 N N O .~' O ,x` W ~ ~ 6A _ ..1 ~~ ~ m WI L Z ' ~ ; o . - a .'~ILi.°~: 10 r ry ~ 'a1~r,'~ c E c E e ®71~' ~ g ~` m x O : ii ~?' ~: L e o ti ,~ o 0 P tt d _ O Z ~~ti;p~:: 0 0 0 : a ~ ~::N:;:-_ C C 7 N C j .a V~ U oa U oaa t'n Nryq LNy C C L U G C G EEnn.EEa6 m v$v°ipvci$Sg L m N N ~ ~-- vl N ~-+ 69 69 f9 69 69 6A 69 (A m y d C k Y a m _ ~ G ~ C D v m Ea~i~P;:ccc u F k, ~ c~ Si ~ " w 44~~~~LO~~ W OOf]>a.U(z0 v~ arn~~o'^o v`Oi ~lo ~~ h h _m y 7 V ~- O U C C Uj v "to ~v ti N ~ C c c w HW~y~aE G ~ V (A p V D _r+ O O U Z N O. C 'D ' ' ' ~ m a o o o ~ ~ ~ a, a aa.mv~v~u. -5- d C v a D a° 3 O U O U b e .~ .~ T e w y O U 3 C O v u 3 v u w v O o. e ~ D m ..~. C '~ H Ea °u m ~: [ ... o O [ G. w° `~ Redevelo meet A enc H y p g y j Sta Re opt c'~LIFOR~~~ f p DATE: May 13, 2009 TO: Redevelopment Agency Board FROM: Terry White, Director of Public Works SUBJECT: RESOLUTION AWARDING A CONSULTING SERVICES AGREEMENT TO EXPONENT FAILURE ANALYSIS ASSOCIATES FOR THE PRE AND POST CONSTRUCTION SURVEYING FOR THE MILLER AVENUE PARKIl~TG STRUCTURE PROJECT IN AN AMOUNT NOT TO EXCEED $110,000 RECOMMENDATION It is recommended that the Redevelopment Agency Board adopt a resolution awarding a consulting services agreement to Exponent Failure Analysis Associates ("Exponent") of Menlo Park, California, for the pre and post construction surveying for the Miller Avenue Parking Structure (Project No. 72-13236-0770) in an amount not to exceed $110,000. BACKGROUND/DISCUS SION During the construction of the foundation for the Miller Avenue Parking Structure, geo-piers will be installed using the rammed aggregate pier construction process. This process will involve placing aggregate into excavated shaft and compacting it. The process will generate vibrations; however, the vibrations should not adversely affect any existing nearby structures. Furthermore, the structure will be built within two feet of the property line and extra caution will be taken to reduce any effect to the adjacent structures. To monitor and document the vibrations and the pre and post construction conditions of the properties surrounding the construction site, staff recommends conducting pre and post construction surveys, which will include visual documentation of interior and exterior finishes (where readily accessible) and vibration monitoring. These pre and post construction surveys, also known as failure analysis, are a very specialized type of engineering forensics. Since very few failure analysis firms are located in the Bay Area, the Engineering staff was only able to solicit two (2) firms to provide pre and post construction survey service proposals for the Miller Avenue Parking Structure. Habitat Engineering & Forensics could not provide a proposal but offered a flat rate of $250/hour for services. Exponent provided the City with a proposal. After reviewing the submitted proposal, staff recommends awarding the consulting services agreement to Exponent based on its demonstrated competence and professional qualifications necessary to conduct this specialized failure analysis. Exponent has previously worked successfully with the engineering staff and the City Attorney's office on the Wet Weather Phase I Project for properties' evaluation on Beacon Street. Staff Report Subject: RESOLUTION AWARDING A CONSULTING SERVICES AGREEMENT TO EXPONENT FAILURE ANALYSIS ASSOCIATES FOR THE PRE AND POST CONSTRUCTION SURVEYING FOR THE MILLER AVENUE PARKING STRUCTURE PROJECT IN AN AMOUNT NOT TO EXCEED $110,000 Page 2 of 2 FUNDING Funding for this project is included in the City of South San Francisco's 2008-2009 Capital Improvement Program and sufficient funds are available. CONCLUSION Award of the consulting services agreement to Exponent of Menlo Park, California, will allow the City to monitor the impact to the adjacent structures during the construction of the Miller Avenue Parking Structure. Terry Whit Director of Public Works ~~ Approved. arty M. Nagel Executive Director Attachment: Resolution Exponent Proposal and :Fee Schedule sb/hUrr RESOLUTION NO. REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA RESOLUTION AWARDING A CONSULTING SERVICES AGREEMENT TO EXPONENT FOR THE PRE- AND POST-CONSTRUCTION SURVEYING FOR THE MILLER AVENUE PARKING STRUCTURE PROJECT IN AN AMOUNT NOT TO EXCEED $110,000 WHEREAS, staff recommends conducting pre- and post-construction surveys to monitor and document the vibrations and pre- and post-construction conditions of the properties surrounding the Miller Avenue Parking Structure Project ("Project") construction site; and WHEREAS, staff was able to locate only two Bay Area suppliers of failure analysis surveying services as required for the Project; and WHEREAS, staff solicited the said two firms for proposals for pre- and post- construction surveying services; and WHEREAS, staff recommends awarding the agreement to Exponent Failure Analysis Associates ("Exponent") for $110,000 based on Exponent's superior understanding of the project and its demonstrated competence; and WHEREAS, the pre- and post-construction survey will allow the City to monitor the impact to the adjacent structures during the construction of the Project; and WHEREAS, the project is included in the City of South San Francisco's 2008- 2009 Capital Improvement Program (CIP) and sufficient funds are available. NOW, THEREFORE, BE IT RESOLVED, by the Redevelopment Agency of the City of South San Francisco that the Agency hereby awards the Consulting Services Agreement for pre- and post-construction surveying during the construction of the Miller Avenue Parking Structure to Exponent Failure Analysis Associates of Menlo Park, CA in an amount not to exceed $110,000, conditioned on Exponent's timely execution of the Project contract and submission of all required documents, including but not limited to, executed bonds, certificates of insurance, and endorsements, in accordance with the Project documents BE IT FURTHER RESOLVED that the Executive Director is hereby authorized to execute the agreement on behalf of the Redevelopment Agency. -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 2009 by the following vote: AYES: NOES: ABSTAIN: ABSENT: 1232023.1 ATTEST: City Clerk -2- ~~~-Un~~1~,,,. Fc~rlr.rre Arr~lysis Associates" March 20, 2009 Ray Razavi City Engineer City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Subject: Miller Avenue Parking Structure Exponent Project No. 0901573 Dear Mr. Razavi: r.1~~,I~~t,t tag ('onmiim\\•calth f)ri\c I~~lrulo Park.. (::A y.ro3; trlchhnn~~ f;a-,3/i-.)#ao facsinlilc ri~o-,;2(i-so7' \4'11'\4 ~. 1'\F10111 tl t'.l [l 111 Thank you for contacting Exponent Failure Analysis Associates (Exponent) for technical services related to the above-referenced matter. This letter presents our current understanding of the scope of services sought and terms of the engagement. The purpose of our retention is to provide engineering consultation regarding the potential effect of construction activities from the Miller Avenue Parking Structure Project ("Project") on adjacent building structures. Specifically, our scope of services is anticipated to include the following: Pre-construction condition survey: Visual documentation of interior and exterior finishes (where accessible), including flatwork of the buildings located within 100 feet of the Project site. We anticipate this task will take 5 days to complete and will cost approximately $20,000. During the course of the construction activities, Exponent can also visit the site to observe and document construction activities and types of equipment used. We anticipate each site visit will cost on the order of $400. Vibration monitoring: Continuous vibration monitoring can be carried out for the duration of the excavation and foundation stages of the Project, which is anticipated to be four months. Vibration data will be collected at four points (one on each side of the site)1 continuously during the duration of the Project. Fees for the proposed scope of services will be a function of the duration of monitoring (that is, construction activities) and are estimated to be on the order of $9,000 per month. This cost estimate includes analysis of the vibration data relative to well accepted damage thresholds for building structures. ' Data collection process will be subcontracted through Exponent to Municon Consulting. 0901573.000 RTN1 -3- Mr. Razavi March 20, 2009 Page 2 Additional data will be collected to estimate the attenuation of the ground vibrations for the expected types of vibration. This data will help develop estimates of ground vibrations at locations away from the site without having to place instrumentation at all locations. The cost for this portion of the task will be on the order of $10,000. Consultation: We anticipate consultation with City Engineers, phone conferences and project coordination will cost on the order of $12,000. All of Exponent's services will be provided on a time-and-expense basis. Charges will include professional fees, equipment usage fees, and other out-of-pocket expenses according to our Schedule of Rates 8c Charges, a copy of which is enclosed and made a part hereof by reference. Based on our current understanding of the Project and the scope of work discussed above, the total fees for the project, including subcontractor fees are expected to be $82,000 assuming four months of vibration monitoring and 10 site visits during construction to observe and document construction activities. Exponent's services are provided only in accordance with our Terms and Conditions of Agreement, a copy of which is enclosed and made a part hereof by reference. It is our understanding that Exponent's retention on this project is solely with your organization and all charges (i.e., fees and expenses) incurred by Exponent on this project will be the responsibility of the City of South San Francisco, independent of other parties/payees involved. If your organization is not responsible for these charges, please contact me immediately. Based on the information you have provided, we have performed aconflict-of-interest check for the following parties: • City of South San Francisco • Miller Avenue, South San Francisco, CA Using this information, Exponent has determined that it does not currently have a conflict that would preclude us from assisting you in this matter. Please inform me as soon as possible if this list of parties is inaccurate or incomplete, or if other parties become involved as this matter proceeds. Please indicate your understanding and acceptance of the terms of retention by signing and returning a copy of this letter. If you have any questions or require additional information, please do not hesitate to contact me at (650) 688-6702. We look forward to working with you. 0901573.000 RTN1 ~"" ,~:~ Jl._..r -4- Mr. Razavi March 20, 2009 Page 3 Sincerely, Joanna L. Meldrum, P.E., P.G. Senior Managing Engineer Civil Engineer C 63479 Licensed by the California Board for Accepted by: Authorized Signature Name and Title Professional Engineers and Land Surveyors Professional Geologist 7798 Licensed by the California Board for Organization Geologists and Geophysicists Enclosures (2) 090'1573.000 RTN1 Date -5- ~jr~i TA,/ J~_l , CONSULTING SERVICES SCHEDULE OF RATES & CHARGES PROFESSIONAL FEES The staff of Exponent comprises highly qualified professionals -both employees and consultants. Exponent charges its clients for services provided according to the skill level of the individual assigned to the client's project. For billing purposes, Exponent provides the following staff classifications that designate relative experience, training, and accomplishment within a technical field together with the range of standard hourly fees charged for their services. Principal / Officer* Senior-level technical or management person, responsible for technical direction $260.00 - $600.00 or general management or administration of the Firm. Senior Manager Senior technical professional providing high-level or individual consulting $225.00 - $425.00 assignments, or overall technical direction of projects, may have management responsibility for a technical field within the Firm. Manager Senior technical professional providing high-level or individual consulting $175.00 - $375.00 assignments or overall technical direction of projects. Senior Engineer/ Experienced technical professional skilled in planning, organizing, controlling, $140.00 - $260.00 ScientisUAssoaate and executing complex, higher-order projects or assignments. Engineer/ScientisU Trained/degreed professional responsible for executing technical assignments $100.00 - $225.00 Associate in support of client projects. Technical/Research Personnel experienced in instrumentation, programmer testing, library science, $ 80.00 - $195.00 Specialist or the development or execution of research methodologies in support of technical/engineering projects. Technical Assistant Laboratory, data processing, engineering-graphics, engineering technician, or $ 60.00 - $135.00 other personnel responsible for the execution of special¢ed tasks in support of technical /engineering projects_ Administrative/ Personnel who assist technical staff in various administrative non-technical $ 60.00- $125.00 Non-technical areas, including scheduling, report productions, communications, logistics, and Assistant project support. * Rates do not include Chairman Emeritus, Dr. Roger McCarthy. Dr. McCarthy's rate is $800.00/hour. The above hourly rates represent the professional fees charged by Exponent for work performed within the continental United States. A rate is established for each employee within his/her classification, based on that person's individual qualifications and experience. These rates are modified annually on or about January 1, or otherwise at the discretion of Exponent. For projects conducted outside the continental United States, premium rates may be applied to adjust for cost-of-living differentials. Premium rates may also be applied when, at the client's request, work is to be accomplished in such a way as to increase costs to Exponent. This may occur due to schedule constraints or planned inefficiencies. Premium rates for this work shall be no less than 15% greater than the hourly rates quoted above. Payment is required in U.S. dollars within thirty (30) days after receipt of invoice, or interest charges may be applied. FIXED-PRICE SERVICES When the services required or the character of the final work product are sufficiently defined, Exponent may provide such services or deliverables on a fixed-price basis. SPECIAL PROJECTS Specialized software, methodologies, services, or technical products developed by Exponent will be charged at rates that reflect development costs and equivalent technical value. Specific prices and terms of agreement will be provided upon request. EQUIPMENT CHARGES Technical equipment may be used both in-house and in the field to assist Exponent personnel in their work. An hourly access fee is charged for selected equipment, for which examples are the scanning electron microscope and the Materials Test System. OTHER PROJECT EXPENSES Air travel is charged at the most effective fare basis for the project involved and is invoiced to the client at F~cponent's cost. Exponent personnel below the principal dass~cafron charge coach fares per Exponent's policy. Local mileage is charged in accordance with I.R.S. guidelines. Some project expenses requiring administrative processing are charged at cost plus fifteen percent (15%). These may indude (but are not necessanly limited to) meals, materials, equipment, outside laboratory tests, outside computer charges, special printing and reproduction, shipping charges, special fees, or supplemental insurance. Consumable materials may be charged in some instances on an applied rate rather than an incurred cost basis. Professional expenses related to legal discovery requirements brought about by Exponent's services will be charged at the above rates. Revision 20090310 -6- TERMS AND CONDITIONS OF AGREEMENT Exp®nent"~` CHARGES Work performed under affixed-price arrangement will be billed at the agreed fixed amount. Work performed on atime-and-expenses basis will be charged in accordance with the most current Consulting Services Schedule of Rates 8 Charges of Exponent. Any unusual work not specifically covered by that schedule will be charged at a rate mutually determined to be reasonable in relation to the type of work to be performed. At the discretion of Exponent, a suitable retainer may be required from the client in advance. Such an amount will be held by Exponent until the final invoice is prepared, at which time the client's account will be reconciled. Evidence storage and disposal after closure of Exponent's case file will be the responsibility of the client. Upon the client's request, Exponent may agree to provide temporary storage space for a reasonable fee, which the client agrees to pay monthly upon presentation of an invoice from Exponent. Taxes will be charged where applicable. PAYMENT Invoices are typically rendered monthly or in accordance with the agreed upon payment schedule, and are due upon receipt. Outstanding balances past due over 30 days are subject to a delinquency charge until paid. Exponent, without liability, may withhold delivery of reports and other data, and may suspend performance of its obligations to the client, pending full payment of all charges. Exponent reserves the right to decline further work with any client delinquent in payment of charges due to Exponent for previous work, until such balances are paid in full. EXECUTION OF SCOPE OF SERVICES Exponent will work in accordance with generally accepted professional engineering practice. No other warranty, express or implied, is made concerning work performed under the agreement, including Exponent's findings, recommendations, specifications, or professional advice. Exponent will diligently proceed with the contracted work and report to the client in a timely manner, except for delays occasioned by factors beyond Exponent's control, by factors that were not reasonably foreseeable, or by factors initiated by the client. Work under the agreement will be terminated upon receipt by Exponent of written notice from the client, except that Exponent may complete such analyses, records, and reports as are reasonably necessary to adequately document the work performed through termination. Charges for such work will be kept to a reasonable minimum, not exceeding 10% of total charges incurred through the date of termination. Work under afixed-price agreement that is terminated before completion will be billed on a percentage of completion basis for effort expended up to the receipt of client's written notice of termination. Work under the agreement may be terminated by Exponent only for just cause. This includes, but is not limited to: development of a material conflict of interest, judicially required participation in onerous discovery or other legal process outside the intended scope of the work, or the presence of circumstances beyond Exponent's control, such as natural disasters or government intervention. Exponent, unless other specific arrangements are made, will maintain its technical fetes for 30 days after the final payment is received and the case file is closed. Financial records will be retained according to I.R.S. requirements, but not less than one year after the case file is closed. MISCELLANEOUS The client assumes full and complete responsibility for all uses and applications of Exponent's recommendations, or work under this agreement, or failure to use recommendations or work, and agrees to indemnify and hold harmless Exponent, its affiliates, officers, directors, employees, agents, and stockholders against any and all liability, damages, losses, claims, demands, actions, causes of action, and costs including attorney's fees and expenses resulting from the death or injury to any person or damage to any property or any other alleged or actual damages resulting from the aforementioned use, application, or nonuse of Exponent's recommendations or work under this agreement. The client agrees that in no event shall Exponent, its affiliates, officers, directors, employees, agents, or stockholders be liable for any incidental or consequential damages, direct or indirect, arising from Exponent's services under this agreement. Exponent will hold in strictest confidence all proprietary information and trade secrets of the client to which it may be given access. Unless otherwise expressly agreed in writing, all reports, recommendations, procedures, and other information provided to the client under this agreement shall be joint property of the client and Exponent, and may be used without restriction by either. However, unless otherwise expressly agreed in writing, Exponent shall retain exclusive rights to all proprietary information, technologies, trade secrets, inventions, or patentable ideas developed during the performance of this agreement. In any litigation involving the client in which Exponent is compelled by subpoena or court order to testify at a deposition or judicial proceeding, or to produce documents regarding work performed by Exponent, the client agrees to compensate Exponent, at its prevailing hourly rate, for all time spent by Exponent in responding to such legal process, including all time spent in preparing for such testimony. The client also agrees to pay Exponents reasonable attomey's fees and expenses included in connection with the foregoing. In the event of any such subpoena or court order, Exponent will promptly notify the client to enable the client to object to any such testimony or production of documents. In the event of a lawsuit between the client and Exponent under this agreement, such lawsuit shall be filed and tried only in a court of competent jurisdiction within San Francisco County, California. California law shall apply to any such proceeding. The prevailing party in any action shall recover from the losing party its reasonable attomey's fees and costs of suit incurred in addition to any other relief granted. Revision 050715 -7- S ~°~Sx -~~~i. 0 H ~ v o c~LIFOR~lA a e~ o DATE: May 13, 2009 TO: The Honorable Mayor and City Council The Honorable Chair and Redevelopment Agency Board FROM: Marry Van Duyn, Assistant City Manager/Assistant Executive Director SUBJECT: RESOLUTION APPROVING A MEMORANDDM OF UNDERSTANDING AMONG THE CITY OF SOUTH SAN FRANCISCO, SOUTH SAN FRANCISCO REDEVELOPMENT AGENCY AND OYSTER POINT VENTURES LLC FOR POTENTIAL DEVELOPMENT OF THE OYSTER POINT MARINA AND OYSTER POINT BUSINESS PARK; RESOLUTION APPROVING A MEMORANDUM OF UNDERSTANDING AMONG THE CITY OF SOUTH SAN FRANCISCO, SOUTH SAN FRANCISCO REDEVELOPMENT AGENCY AND THE SAN MATED COUNTY HARBOR DISTRICT FOR POTENTIAL DEVELOPMENT OF THE OYSTER POINT MARINA RECOMMENDATION Staff recommends that the City Council and Agency Board respectively approve the attached (i) Resolution approving a Memorandum of Understanding among the City of South San Francisco, South San Francisco Redevelopment Agency and Oyster Point Ventures LLC; and (ii) Resolution approving a Memorandum of Understanding among the City of South San Francisco, South San Francisco Redevelopment Agency and the San Mateo County Harbor District BACKGROUND The City owns property located at the Oyster Point Marina. The City and the San Mateo County Harbor District ("District") have established a Joint Powers Authority that governs the development, operations, and maintenance of the property, including management of the Oyster Point Marina by the District. The District has leased several portions of the Oyster Point Marina to King Ventures for the purpose of developing afirst-class hotel and avillage-style, commercial retail complex. Since 1998, there has been no progress with regard to the hotel or the retail village. Staff Report Subject: Oyster Point Ventures MOU and Harbor District MOU Page 2 of 13 Oyster Point Ventures LLC is a joint venture between Shorenstein Properties and SKS Investments LLC ("S/SKS"). S/SKS has recently purchased the Oyster Point Business Park, which is adjacent to the Oyster Point Marina, for the purpose of developing the Oyster Point Business Park into a modern research and development life sciences campus. In addition, S/SKS has entered into an agreement with King Ventures to acquire the leasehold interest in the City's property. In collaboration with the City, S/SKS has proposed apublic-private development approach that would result in an integrated development of the Oyster Point Marina and the Oyster Point Business Park based on the following development concepts: (1) a modern life sciences campus, including substantial public amenities, with research and development and/or office buildings (estimated total of 2.25 - 2.3 million gross square feet of space), retail and sufficient structured parking and new infrastructure; (2) commercial development located near and oriented to the proposed public ferry terminal that will likely provide office space, retail, food and beverage sales and a hotel; (3) continued harbor and marina uses and coordination with the proposed ferry terminal; (4) enhanced public open/recreation space amenities; and (5) infrastructure improvements related to the life sciences campus, Ferry Village and public open space (collectively, the "Project"). S/SKS requested the exclusive right to collaborate with the City to develop an integrated Oyster Point Business Park and Oyster Point Marina development project. The City Council authorized the City to enter into exclusive negotiations with the S/SKS, and on September 4, 2008, the City and the S/SKS entered into an Exclusive Negotiation Rights Agreement ("ENRA"). Pursuant to the ENRA, the City and S/SKS exchanged information, studies, reports and documents and prepared a "Framework Agreement." The Framework Agreement set forth the proposed Project, anticipated property conveyances, entitlements needed, potential development schedule and guidelines for ongoing collaboration, investigation, and negotiation between the City and the S/SKS to develop the terms and conditions of a memorandum of understanding between the parties. The City Council authorized the City to continue negotiations and planning with S/SKS, and on November 11, 2008, the City and the S/SKS executed the Framework Agreement. Pursuant to the Framework Agreement, City staff and S/SKS have further negotiated and analyzed the Project, the estimated infrastructure costs of the Project, anticipated property conveyances and land uses, preliminary site configuration in order to develop the terms and conditions of a memorandum of understanding. In addition, City staff and the Harbor District have discussed the potential fiscal impacts of the Project on the operations of the Marina. City staff and the Harbor District believe the Project will have a positive impact on the Marina in the long-term. DISCUSSION I. MEMORANDUM OF UNDERSTANDING WITH S/SKS. The purpose of the MOU with S/SKS is to establish anon-binding mutual understanding among the City, Redevelopment Agency and S/SKS regarding: (1) a project description to undertake the required analysis by the City and Redevelopment Agency pursuant to the California Environmental Quality Act ("CEQA"), (2) feasibility of the project and proposed allocation of estimated infrastructure costs Staff Report Subject: Oyster Point Ventures MOU and Harbor District MOU Page 3 of 13 among the parties, and (3) the necessary planning activities, entitlements and agreements necessary to implement the Project. Approval of an MOU does not authorize the construction of the proposed Project or any other construction and will not result in either a direct or reasonably foreseeable indirect physical change in the environment; rather, the MOU only commits the parties to certain obligations related to the further planning and negotiation of the property exchanges and development of the Project. No construction will be authorized until (i) City, in conjunction with RDA, has prepared, certified as adequate and approved an Environmental Impact Report under CEQA; (ii) City has approved the land use entitlements required for the Project; and (iii) any agreements or regulatory permits required by any other applicable regulatory agencies have been obtained. A. Project Description. 1. S/SKS Project. S/SKS will establish a modern life sciences campus, including substantial public amenities, across the S/SKS Property, which will be acquired by S/SKS ("S/SKS Project"). The S/SKS Project would include research and development and/or office buildings, comprising a total of up to approximately 2.25 - 2.3 million gross square feet of development. This figure is predicated upon a Floor Area Ratio ("FAR") calculation of 1.25, taking into account certain areas (1) reserved for public amenities, including private streets constructed on private property, beach, park, portion of the Bay Trail, or other rights of way, public open space, or recreational area, and (2) available for potential future development, and subject to confirmation by the City of the actual square footage of the parcels comprising the S/SKS Project. The S/SKS Project would also include sufficient structured parking to meet the tenants' parking needs and City's requirements. 2. Ferrer Village/Oyster Point Marina and Related Facilities. A portion of the City Property will include the redevelopment of the Oyster Point Marina and related facilities ("Ferry Village/Oyster Point Marina") located near and oriented to the public ferry terminal that is planned for future operation at Oyster Point. The Ferry Village/Oyster Point Marina will be designed to serve the ferry passengers, Marina visitors, and the Life Sciences Campus tenants. Upon completion, the Ferry Village/Oyster Point Marina will likely provide retail and commercial uses, food and beverage sales, a hotel, and other similar or related marina uses. 3. Open Space and Recreation. The Project will consist of public open/recreational space uses including, but not limited to, beach access, athletic fields, and improvements to the Bay Trail. 4. Infrastructure and Public Improvements. The Project will require infrastructure and public amenities such as road and intersection improvements, water, sewer, gas, electricity, lighting, parking, trails, parks, and landscaping Staff Report Subject: Oyster Point Ventures MOU and Harbor District MOU Page 4 of 13 improvements. These infrastructure improvements and costs are set forth in more detail in Exhibit J of the MOU. 5. Land Exchange. The property to be conveyed, pursuant to a contemplated Conveyance Agreement, is approximately 14.28 acres of land adjacent to the Oyster Point Business Park ("Marina Property"). Prior to any development of the parcels, the Marina Property, which is currently vacant, requires substantial environmental remediation, including repairs to the existing clay cap, installation of methane systems, and relocation of refuse. The total cost of these remediation measures is estimated to be approximately $18,700,000, which is the responsibility of the City. As part of the Project, the City would transfer fee title to the Marina Property to S/SKS, and S/SKS would: (i) convey back to the City, the King Leases, valued at $7,500,000; (ii) assume responsibility for the $18.7 million of required environmental remediation; and (iii) pay $4,500,000 to the City in two installments. The City and S/SKS will not exchange property interests until the City has completed the CEQA analysis, S/SKS has obtained all entitlements ,and S/SKS has provided evidence of project financing and a written commitment to the City to commence construction of the Project. 6. Concept Plan. The Concept Plan, attached at Exhibit C of the MOU, depicts the approximate extent and location of major Project elements (as currently contemplated), including the buildings comprising the Life Sciences Campus and the Ferry Village/Oyster Point Marina, areas reserved for recreation open space, major landscaping improvements, commercial uses, a hotel and new street configuration. As planning, design review and new information arising from further staff review and public input (including traffic data and information from the environmental review process) becomes available, the Concept Plan may be revised to incorporate such information. The Concept Plan will take into account the following: • Create a visual `sense of arrival' to the Oyster Point Marina area at the intersection of Oyster Point Boulevard and Marina Boulevard; • Create an aesthetically pleasing, safe and efficient pedestrian and vehicle network throughout the Life Science Campus and the Ferry Village/Oyster Point Marina; • Enhance access to and promote the use of th.e SSF Ferry Terminal and implement the transportation demand management (TDM) requirements identified in South San Francisco's Zoning Ordinance; • Design and implement publicly accessible open spaces for portions of the Life Sciences Campus and for the Ferry Village/Oyster Point Marina; and Staff Report Subject: Oyster Point Ventures MOU and Harbor District MOU Page 5 of 13 • Incorporate superior urban design features, including the relationship of buildings to open space, the connection between public and private facilities, and connections for visitors to the Oyster Point Marina and open space areas. 7. Phased Development. As shown in the Infrastructure Phasing Plan attached as Exhibit J of the MOU, the Project will be developed in several phases. S/SKS estimates the Project schedule as follows: Phases IC and ID (Estimated commencement in 2013): • Streets and utilities (including grading, subgrade, base, paving, curb and sidewalk, street lights, storm water, sanitary sewer, combined trench for gas, electric, and telecom, impermeable utility trench at sanitary landfill areas, and temporary streets and utilities); • Repair of the clay cap covering the Oyster Point Landfill; • Repaving of existing parking areas; • Grading and construction of recreational fields; • Demolition and grading at the future "hotel site"; • Landscaping of the beach/park area; • Remediation of the area identified as "Sump 1 "; • Installation of methane control and monitoring systems; • Relocation of refuse to accommodate new buildings; and • Development of buildings with no less than 508,000 square feet for research and development and/or office use on property within the Downtown/Central Redevelopment Project Area (and a projected maximum of 844,000 square feet of development within the Downtown/Central Redevelopment Project Area). Phase IIC (Estimated commencement in 2018): • Landscaping of perimeter areas of the Marina located within the Bay Conservation and Development Commission jurisdiction; • Landscape improvements of non-paved areas; • Construction of a sewer pump station; • Additional repair of clay cap covering the Oyster Point Landfill; • Additional repaving of existing parking; and • Development of commercial uses, hotel and retail. Phases IID throw h IVD Estimated commencement in 2014: • Development. of streets and utilities at the Oyster Point Business Park; • Construction of sewer pump station; • Landscaping within 100-foot shoreline band at Oyster Point Business Park; and • Development of buildings Staff Report Subject: Oyster Point Ventures MOU and Harbor District MOU Page 6 of 13 B. Planning and Infrastructure Costs. City staff has collaborated with S/SKS to analyze the feasibility of the Project and on the potential infrastructure and environmental costs of the Project. Because of the complexity of the Project, City staff and S/SKS have used their best efforts to estimate the costs of the Project and there will be further refinement and analysis conducted of the cost estimates. S/SKS has provided a proposal of the potential infrastructure costs of the Project, which are estimated at $110,664,053 ("Infrastructure Costs") as shown in Exhibit J of the MOU. In order to initiate development of the Infrastructure Improvements, the Project requires an investment of $16,640,908 from the Redevelopment Agency in addition to a $44,166,618 investment from S/SKS. Under this Infrastructure Costs proposal, the costs are allocated to the parties as follows: • Redevelopment Agency would provide $16,640,908 in tax increment funding for infrastructure improvements in Phase IC, and an additional $11,214,346 to construct additional improvements for Phase IIC; and • S/SKS would commit to: (i) acquiring the King Leases at an approximate cost of $7,500,000; (ii) paying for all costs related to planning the Project and reimbursing the City/Redevelopment for such costs (estimated at $4,172,000); (iii) making two payments of $2,250,000 each to the City/Agency at the beginning of Phase IC and Phase IIID (total of $4,500,000); (iv) financing infrastructure improvements at an approximate cost of $55,706,627 for the Project; (v) making a payment of $10,930,000 to the City/Redevelopment Agency in Phases IIID and IVD to assist Agency finance additional improvements at the Marina Property; and . (vi) developing and constructing at least 508,000 square feet of life science buildings in Phase I. C. Proposed Schedule of Planning and Develoument. Obligations under the MOU will commence upon a "Commencement Date," which would likely be sometime in June or July of this year if the City Council and Agency Board approve the MOU in May of this year. The additional time is necessary to allow for concurrent approval of the lease transfer by the Harbor District and the California Department of Boating and Waterways. City staff anticipates the Project to proceed as follows: Staff Report Subject: Oyster Point Ventures MOU and Harbor District MOU Page 7 of 13 • Third quarter 2009: Initiate preparation of EIR and Project Entitlements. • First quarter 2011: Complete environmental review and City/Redevelopment Agency approval of Project Entitlements. • First quarter 2011: Consideration of Project Entitlements, Owner Participation Agreement, Development Agreement and Conveyance Agreement to govern development, financing and transfer of the King Leases and Marina Property. • Second quarter 2013: Projected date for exchange of interests in King Leases and Conveyed Property pursuant to Conveyance Agreement. • Second quarter 2013: Projected date to commence construction of Phase I Infrastructure Improvements, provided that the Project is approved. • Second quarter 2013: Projected establishment of a community facilities district and issuance of Mello-Roos Bonds. Because the Redevelopment Agency will initially use TI funds from the Merged Project Areas for the Project, City staff and S/SKS have developed the following timing schedule in order to provide the City Council with flexibility to fund other potential projects: 1. Timing for Phase I. The City/Agency will have certain remedies (described below) if S/SKS fails to satisfy the following MOU obligations by the ninth (9th) anniversary of the Commencement Date (the "Horizon Date"): • Obtain CEQA and General Plan, Zoning, and Master Plan-level entitlements for the entire Project contemplated by the MOU; • Obtain all additional entitlements for construction of the Project from the City and all other regulatory agencies with jurisdiction over the Project; • Demonstrate financing for the Project; and • Provide a written, binding commitment with the Redevelopment Agency to commence and diligently complete construction of the Project within four years after the Horizon Date, with the exception of any force maj eure events mutually agreed upon by the Parties. City staff estimates that it will require three to four years for S/SKS to take all actions necessary to comply with CEQA and obtain the land use permits listed above. Thus, S/SKS will have approximately six to seven years (including a one year cure period described below) to commence construction of the Project, which is subject to the remedies described below. In addition, the Redevelopment Agency will not provide funding prior to commencement of construction. Finally, Staff Report Subject: Oyster Point Ventures MOU and Harbor District MOU Page 8 of 13 final agreements will include a requirement that funding assistance will occur on a reimbursement schedule that coincides with construction of buildings for the life sciences campus. 2. Notice of Default and Right to Cure. If S/SKS does not perform the MOU obligations by the Horizon Date (9 years after approval of the MOU), the City/Agency may but is not obligated to: • Provide S/SKS with written notice of the City's intent to terminate the OPA; and • If the City elects to give the notice, S/SKS shall have one (1) year ("Cure Period") after the City/Agency's Notice to: (i) obtain all entitlements for the Project, (ii) demonstrate financing for Phase One, and (iii) provide to City/Agency a written, binding commitment to commence and diligently complete construction of Phase I within three (3) years after the Horizon Date, with the exception of any force majeure events mutually agreed upon by the parties. If the City elects to give notice and if S/SKS fails to complete the MOU obligations by the end of the Cure Period, the City/Agency may but is not be obligated to: • Terminate the OPA and the Conveyance Agreement; • Exercise an option to purchase for all cash, the King Leases and entitlements for the Redevelopment Project at a fixed price of $7,500,000 if all improvements to the existing facilities (shown in Exhibit F to the MOU and estimated at $1.4 million) are completed by Developer, and if such improvements are not completed, the price for the King Leases is reduced to $6.1 million; and • Decrease the purchase price for the King Leases by $500,000 for each year Developer fails to complete the actions by the 7th anniversary of the Commencement Date, for a maximum purchase price reduction of $1,500,000. Staff Report Subject: Oyster Point Ventures MOU and Harbor District MOU Page 9 of 13 D. Future Planning Activities and Agreements. 1. Land Use Planning, Entitlements and CEQA. Prior to entering into any binding agreements, the City, Redevelopment Agency and S/SKS will conduct the required analysis pursuant to CEQA and undertake all planning activities. Such planning activities will likely include the following: • Amendments to the City General Plan, Oyster Point Specific Plan; Zoning Ordinance and Oyster Point Marina Specific Plan District; • Amendments to Redevelopment Plan for Downtown/Central Project Area; • Negotiation of a Development Agreement; • Adoption of a Tentative Subdivision/Parcel Map; • Adoption of a Master Plan and Phased Plans for the Project; • Relocation and/or Vacation of City Streets, Rights-of--Way, and Public Utilities; • Application for Use Permits; • Design Review of all Project elements; • Amendment to the Joint Powers Agreement with Harbor District; • Approval of a Community Facilities District; • Approval of use of TI for the Project; • Obtain other Government/Public Approvals as necessary, such as U.S. Army Corps of Engineers, Rivers and Harbors Act Authorization, Bay Conservation and Development Commission, San Francisco Bay Regional Water Quality Control Board, Landfill Closure Approval, Bay Area Air Quality Management District and County of San Mateo -Health Services Department. 2. Proposed Agreements -Deal Points. Prior to entering into any binding agreement, the City, Redevelopment Agency and S/SKS will undertake the required CEQA analysis of the Project and conduct further analysis of the costs and fiscal impacts of the Project. As part of the framework to implement the Project, City staff and S/SKS have discussed and agreed upon tentative deal points of a proposed Owner Participation Agreement ("OPA"), Development Agreement ("DA") and a Conveyance Agreement. The proposed deal points of an OPA, DA and Conveyance Agreement are attached as exhibits to the MOU and are not binding on the parties until each party formally adopts each agreement. Furthermore, the deal points of the OPA, DA and Conveyance Agreement are subject to modification based on the City's and Redevelopment Agency's completion of the EIR, and the parties will not enter into binding agreements until the CEQA analysis is completed. However, in order to develop a Project Description for the purposes of CEQA, the parties have agreed, subject to approval by the City Council and Agency Board, that the major deal points will likely include the following: Staff Report Subject: Oyster Point Ventures MOU and Harbor District MOU Page 10 of 13 Owner Participation Agreement • S/SKS will construct the Phase IC and Phase ID Improvements and at least 508,000 square feet of buildings for the life science campus; • Redevelopment Agency will pledge $16,640,908 of TI for the Phase IC Improvements; • The payments by the Redevelopment Agency will not occur until S/SKS has commenced construction of the Phase ID Improvements and will be consistent with a schedule of performance; • S/SKS will obtain performance bonds or other similar type of security for completion of the improvements; • S/SKS will maintain insurance and indemnify the Redevelopment Agency; • Redevelopment Agency may terminate the OPA and acquire the King Leases if S/SKS does not commence construction by the 10th anniversary of the Commencement Date (described above); • S/SKS will pay prevailing wages for improvements paid by TI and will comply with all prevailing wage laws; • Redevelopment Agency will provide S/SKS a right to exclusive negotiation for any development of City Property that may compete with the S/SKS Project. Development Agreement • 20 year term • S/SKS and City will agree to a Master Plan and specific phased plans for development of the S/SKS Project • S/SKS will pay all City fees that exist or are planned as of the effective date of the DA, exactions that exist or are planned as of the effective date of the DA, implement all mitigation measures for the S/SKS Project; • S/SKS will have a vested right to develop the S/SKS Project in accordance with the DA; Conveyance Agreement • The Conveyance Agreement will memorialize the terms of the land exchange, as discussed in Section I.A.S of this Staff Report. • City and S/SKS will not exchange property interests until S/SKS has obtained all entitlements, the City has completed the analysis under CEQA, and S/SKS has a provided to the City a written commitment to commence construction of the Project. II. MEMORANDUM OF UNDERSTANDING WITH THE HARBOR DISTRICT. City Staff and the Harbor District have discussed the potential plans for the Oyster Point Marina and the potential fiscal impacts of the S/SKS Project on the Harbor District's operations. The purpose of Staff Report Subject: Oyster Point Ventures MOU and Harbor District MOU Page 11 of 13 the MOU with the Harbor District is to establish anon-binding mutual understanding among the City, Redevelopment Agency and Harbor District regarding: (i) potential and anticipated fiscal impacts of the Project to the Harbor District, (ii) ongoing operations and management of the Marina, and (iii) the necessary planning activities to implement the Project and redevelop and operate the Marina. A. Fiscal Impacts. Provided that City, Redevelopment Agency and S/SKS enter into binding agreements related to the Project, City and/or Redevelopment Agency will agree to incorporate the following terms into an agreement to mitigate anticipated fiscal impacts to District: 1. Lease Revenue. For the purpose of commencing development of the Project, in the event the King Leases are terminated prior to District's repayment of its loan from the California Department of Boating and Waterways ("DBW Loan"), Agency will: • pay the District an annual amount equal to the minimum rent District receives from the King Leases, including inflation adjustments set forth in the King Leases ("King Lease Rent"), which would commence after termination of the King Leases and continue unti12019 (end of debt service to DBW), and • discuss in good faith with the District the payment of either (i) additional annual amounts equal to the King Lease Rent commencing after 2019 until the current expiration of the the JPA in 2026 ("Additional King Lease Rent") or (b) an amount equal to the then-net present value of the Additional King Lease Rent to finance public improvements to the Marina Property. 2. Marina Improvements. City and/or Agency shall make good faith efforts to allocate funds or arrange financing for the replacement of one dock on the Marina Property in an amount not to exceed $1,500,000 in connection with the Project. To the extent financially feasible, the parties intend to replace two docks when necessary to maintain the functioning and quality of the marina as the Project is being implemented. This may occur by funding a second dock in lieu of making a rent payment set forth in Section 1 above. B. District Office Space. In order to assist the District with reducing its operating costs, the City will cooperate with District to identify approximately 5,000 square feet of temporary office space for the District located within the City. Provided that a hotel and/or commercial space is developed on the Marina Property retained by the City, the City and/or Agency will provide District with office space to the District within such proposed commercial building. If financially feasible, the parties intend to provide space to the District without cost to the District. If no appropriate space is available, the parties will discuss the possibility of providing a portion of the Marina Property on which District may develop its own headquarters and a small commercial development to provide the District with ongoing revenue. Staff Report Subject: Oyster Point Ventures MOU and Harbor District MOU Page l2 of l3 C. Harbor District Obligations. 1. Consent to Lease Assignment. Upon written request by S/SKS, The District will consent by resolution to an assignment of the King Leases to Developer and cooperate with Developer to obtain consent of such assignment from DBW. 2. C vital Improvement and Management Plan. No later than 12 months after approval of the MOU, the District will provide the City with a capital improvement plan applicable until the end of the JPA (2026) and a management plan to increase berth occupancy and direct revenue. The Parties will cooperate and collaborate to refine such capital improvement plan and work to integrate its implementation as part of the Project, including the mutually supportive use of financing mechanisms available to the respective parties. D. Public Improvements. The City and/or Redevelopment Agency will consult with the Harbor District regarding the Public Improvements related to the Marina Property. E. JPA Amendment. The City and District will amend the JPA in order to: (i) facilitate the development of the Project by Developer; (ii) address the ongoing roles and responsibilities of the Parties as they may be modified as a consequence of the Project; and (iii) facilitate improvements by District of the harbor and marina related to the capital improvement program. In addition, the Parties will discuss in good faith the extension of the JPA beyond 2026 if that would facilitate the Project and the mutual interests of the Parties. F. Revenue Participation. If the City and/or the Redevelopment Agency undertake or cause the development of a hotel and/or commercial space on the Marina Property, the District will receive a share of financial participation and, if the JPA is extended, to facilitate future public improvements to the harbor and marina. G. Transfer of Marina Property. The District will agree to conveyance of portions of the Marina Property to Developer, provided that (i) mutually acceptable District Binding Agreements are executed by the Parties, and (ii) City and/or Agency consults with District on the planning and development of the Project. FISCAL IMPACT Pursuant to the MOU with S/SKS, S/SKS will pay for or reimburse the City and Redevelopment Agency for all costs related to the negotiations of any binding agreements, analysis under CEQA of the Project and all planning activities. . ,~~~--C ~i~w~ ~-~ .._ ~ Approved: ' sy. Marty Van Duyn a M. Nagel Assistant City Ma ' ger Ci Manager Staff Report Subject: Oyster Point Ventures MOU and Harbor District MOU Page 13 of 13 Enclosures: City Resolution - S/SKS MOU City Resolution -Harbor District MOU Redevelopment Agency Resolution - S/SKS MOU Redevelopment Agency Resolution -Harbor District MOU S/SKS MOU and Exhibits Harbor District MOU 1229224-3 RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING A MEMORANDUM OF TiTiv'DERSTANDING AI~iONG THE CITY OF SOTJTH SAN FRANCISCO, REDEVELOPMENT AGENC`r' OF TFIE CITY OF SOUTH SAN FRANCISCO AND OYSTER POINT VENTURES LLC FOR POTENTIAL DEVELOPMENT OF THE OYSTER POINT MARINA AND OYSTER PORN BUSINESS PARK WHEREAS, the City Council of the City of South San Francisco ("City") has adopted a Redevelopment Plan for the Downtown/Central Project Area (as amended, the "Project Area"); and, WHEREAS, the City is tl`ie owner of certain real property located within the Project Area and commonly knovm as the Oyster Point Marina ("Marina Property"); and, WHEREAS, the City and the San Mateo County Harbor District ("District") have established a joint powers authority that governs the development, operations, and maintenance of the Gyster Point Marina Property, including management of the Oyster Point Marina by the District; and, WHEREAS, the District has entered into certain long-term leases with King Ventures for certain portions of the Marina Property, which leases require King Ventures to develop, construct, and maintain a hotel and a commercial, village-style complex; however, to date, King Ventures has not accomplished the goals and obligations pursuant to the King Leases; and, WHEREAS, Oyster Point Ventures LLC, a joint venture between Shorenstein Properties and SKS Investments LLC ("S/SKS"), has recently purchased the Oyster Point Business Park, which is adjacent to the Oyster Point Marina, for the purpose of developing the Oyster Point Business Park into a modern research and development life sciences campus; and, WHEREAS, in collaboration with the City and the South San Francisco Redevelopment Agency, S/SKS has proposed apublic-private development approach that would result in an integrated development of the Oyster Point Marina and the Oyster Point Business Park ("Project"), pursuant to which the Project requires collaboration amongst the City, the District, the Agency and S/SKS; and, WHEREAS, the City desires to provide for an assignment of the King Leases to S/SKS, and a collaborative process regarding future capital improvements, development and management at the Marina Property, as the Parties anticipate that the operations at the Marina will benefit from rile Project and the future proximity to the life sciences campus; and, ~'v'HEREAS, the Agency desires to redevelop the Marina Property and collaborate with S/SKS regarding improvemen±s to the Marina Property and development of the Project; and, ~?VHEREAS, on November 12, 2008, the City Council approved a "Framework Agreement," which set forth a proposed Project, anticipated property conveyances, entitlements needed, potential development schedule and guidelines for ongoing collaboration, investigation, and negotiation between the City and the S/SKS to develop the terms ar~d conditions of a memorandum of understanding among the parties; and, `JVHEREAS, City staff and S/SKS have since negotiated and developed a non- binding Memorandum of LTnderstandng, attached to this resolution as Attachment 1 ("MOU"), that establishes a mutual understanding among the City, Agency and S/SKS regarding (1) a description of the Project to undertake the required analysis by the City and Agency pursuant to the California Environmental Quality Act ("CEQA"), (2j the feasibility of the project and allocation of estimated costs among the parties, and (3) the necessary planning activities, entitlements and agreements to implement the Project; and, WIiEREAS, the MOU is a preliminary, non-binding agreement that does not commit the City to a definite course of action or foreclose consideration of alternatives; and certification of environmental review pursuant to CEQA will be required prior approval of any land use entitlements for the Project; therefore, execution of this MOU is not an "approval" of a "project," as those terms are defined in CEQA. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San Francisco hereby: (1) Finds and determines that the recitals are true and correct; (2) Approves the MOU in substantially the same form attached hereto as Attachment 1; (3) Authorizes the City Manager to enter into and execute the MOU in substantially the same form as attached hereto as Attachment 1, and with any revisions, amendments, or modifications deemed necessary by counsel to the Agency to carry out the intent of this Resolution and which do not materially or substantially increase the Agency's obligations thereunder; and (4) Directs the members, employees, officers, and agents of the City to jointly and severally do any and all things and to execute and deliver any and all other agreements deemed necessary to carry out, give effect to, and comply with the terms and intent of this Resolution and the MOU as approved by this Resolution so long as such 2 Z agreements do not materially or substantially increase the Agenc}''s obligations with respect t~ the MOU. * ': * ?k I hereby certify that the foregoing Resolution vas regularly introduced and adopted by the City Council of the City of Suuth San Francisco at a regular meeting held on the day of 2009 by the following vote: AYES: NOES: ABSTAIN: ABSENT: 1232060.1 ATTEST: 3 City Clerk 3 F.ESOLTJTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRA?v'CISCO, STATE OF CALiFOR~7IA A RESOLUTION APPROVING A Iv1EMORANDUM OF Ui~iDERSTANDIi1C Aiv10NC THE CITY OF SOUTH SAN FRANCISCO, REDEVELOP>`~IENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO AND THE SAN MATEO COUNTY HARBOR DISTRICT FOR POTENTIAL DEVELOPMENT OF THE OYSTER POINT MARINA WHEREAS, the City Council of the City of South San Francisco ("City") has adopted a Redevelopment Plan for the Do.vntown/Central Project Area (as amended, the "Project Area"); and, ~xIHEREAS, the City is the owner of certain real properly Iccated within the Project Area in the City and commonly known as the Oyster Point Marina ("Marina Property"); and, , WHEREAS, the City and the San Mateo County Harbor District ("District") have established a joint powers authority that governs the development, operations, and maintenance of the Oyster Point Marina Property, including management of the Oyster Point Marina by the District; and, WHEREAS, the District has entered into certain long-term leases with King Ventures for certain portions of the Marina Property, which leases require King Ventures to develop, constnlct, and maintain a hotel and a commercial, village-style complex; however, to date, King Ventures has not accomplished the goals and obligations pursuant to the King Leases; and, WHEREAS, the District uses rent revenue from the King Leases to pay debt service on loans from the California Department of Boating and Waterways, which has a security interest in the King Leases; and, WHEREAS, Oyster Point Ventures LLC, a joint venture between Shorenstein Properties and SKS Investments LLC ("S/SKS"), has recently purchased the Oyster Point Business Park, which is adjacent to the Oyster Point Marina, for the purpose of developing the Oyster Point Business Park into a modern research and development life sciences campus; and, WHEREAS, in collaboration with the City and Redevelopment Agency of the City of South San Francisco ("Agency"), S/SKS has proposed a public-private development approach that would result in an integrated development of the Oyster Point a Marina and the Oyster Poirt Business Park, vrhich requires collaboration amongst the City, the District, the Agency and S!SKS; and, WHEREAS, the City and the District desire to provide for an assignment of the King Leases to S1SKS, and a collaborative process regarding future capital improvernents, development and management at the Marina Property, as the Parties anticipate that the operations at the iviarina will benefit from the Project and the future proximity to the life sciences campus, but treat the Project may have f scat impacts on District's operations at the Marina Property; and, WHEREAS, City and Agency staff and the Harbor District have negotiated and developed anon-binding Memorandum of Understanding, attached to this resolution as Attachment 1 ("MOU"), that addresses the potential short-term fiscal impacts of the Project, the necessary planning activities to improve the 1Vlarina Property, and the ongoing management and operations of the Marina Property; and, WHEREAS, the MOU is a preliminary, non-binding agreement that does not commit the City to a defi~ ite course of action or foreclose consideration of alternatives; and certification of environmental review pursuant to the California Environmental Quality Act (CEQA) will be required prior approval of any land use entitlernents for the Project; therefore, execution of this l~iOU is not an "approval" of a "project," as those terms are defined in CEQA. .NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San Francisco hereby: (1) Finds and determines that tree recitals are true and correct; (2) Approves the MOU in substantially the same form attached hereto as Attachment 1; (3) Authorizes the City Manager to enter into and execute the MOU in substantially the same form as attached hereto as Attachment 1, and with any revisions, amendments, or modifications deemed necessary by the City Attorney to carry out the intent of this Resolution and which do not materially or substantially increase the City's obligations thereunder; and (4) Directs the members, employees, officers, and agents of the City to jointly and severally do any and all things and to execute and deliver any and all other agreements deemed necessary to carry out, give effect to, and comply with the terms and intent of this Resolution and the MOU as approved by this Resolution so long as such agreements do not materially or substantially increase the City's obligations with respect to the MOU. 2 5 hereby certify that the adopted by the City Council of the on the day of AYES: NOES: ABSTAIN: ABSENT: 12."x2058. I foregoing Resolution was regularly introduced and City of South San Francisco at a regular meeting held _ 2009 by the following vote: ATTEST: City Clerk RESOLUTION NO. REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLU T IOTd APPROVING A MEMORANDUM OF UI~TDERSTANDIIVG AMONG THE CITY OF SOUTH SATv FRANCISCO, REDEVELOPMEi~1T AGEItiTCY OF THE CITY OF SOUTH SAN FRANCISCO AND OYSTER POINT VENTURES LLC FOR POTENTIAL DEVELOPMENT OF THE OYSTER POINT iv1ARINA AIVTD OYSTER POINT BUSINESS PARK ~,~4'I-IEREAS, tre Redevelopment Agency of the City of South San Francisco ("Agency") is a redevelopment agency formed, existing and exercising its powers pursuant to the provisions the Community Redevelopment Law cf the State of California (Health; and Safety Code Section 3300) et. seq.); and, ~'VHEREAS, the City Council of the City of South San Francisco ("Cit-y") has adopted a Redevelopment Plan for the DowntowrvCentral Project Area (as amended, the "Project Area"); and, WHEREAS, the City is the owner of certain real property located within the Project Area and commonly known as the Oyster Point Marina ("Marina Property"); and, WHEREAS, the City and the San Mateo County Harbor District ("District") have established a joint powers authority that governs the development, operations, and maintenance of the Oyster Point Marina Property, including management of the Oyster Point Marina by the District; and, WHEREAS, the District has entered into certain long-term leases with King Ventures for certain portions of the Marina Property, which leases require King Ventures to develop, construct, and maintain a hotel and a commercial, village-style complex; however, to date, King Ventures has not accomplished the goals and obligations pursuant to the King Leases; and, WHEREAS, Oyster Point Ventures LLC, a joint venture between Shorenstein Properties and SKS Investments LLC ("S/SKS"), has recently purchased the Oyster Point Business Park, which is adjacent to the Oyster Point Marina, for the purpose of developing the Oyster Point Business Park into a modern research and development life sciences campus; and, WHEREAS, in collaboration with the City and the Agency, S/SKS has proposed a public-private development approach that would result in an integrated development of the Oyster Point Marina and the Oyster Point Business Park ("Project"), which Project requires collaboration amongst the City, the District, the Agency and S/SKS; and, 7 WHEREAS, the City desires to provide for an assignment of the King Leases to S/SKS, and a collaborative process regarding future capital improvements, development and management at the Marina Property, as the Parties anticipate that the operations at the IVlarina will benefit fro~rr, the Project and the future proximity to the life sciences car~ipus; and, WTrIEREAS, the Agency desires to redevelop the I4~arina Property and collaborate with S/SKS regarding improvements to the Marina Property and development of the Project; and, WHEREAS, on Novem'ner 12, 2008, the City Council approved a -`Framework Agreement," which set forth a proposed Project, anticipated property conveyances, entitlements needed, potential development schedule and guidelines far ongoing collaboration, investigation, and negotiation between the City and the S/SKS to develop the terms ar~d conditions of a memorandum of understanding among the parties; and, WHEREAS, City staff and S/SKS have since negotiated and de.eloped a non- binding Memorandum of Understanding, attached to this resolution as Attachment l ("MOLT"), that establishes a mutual understanding among the City, Agency and S/SKS regarding (1) a description of the Project to undertake the required analysis by the City and Agency pursuant to t_h_e California Environmental Quality Act ("CEQA"), (2) the feasibility of the project and allocation of estimated costs among the parties, and (3) the necessary planning activities, entitlements and agreements to implement the Project; and, WHEREAS, the MOU is a preliminary, non-binding agreement that does not commit the City to a defi~~ite course of action or foreclose consideration of alternatives; and certification of environmental review pursuant to CEQA will be required prior approval of any land use entitlements for the Project; therefore, execution of this MOU is not an "approval" of a "project," as those terms are defined in CEQA. NOW, THEREFORE, BE IT RESOLVED that the Redevelopment Agency of the City of South San Francisco hereby: (1) Finds and determines that the recitals are true and correct; (2) Approves the MOU in substantially the same form attached hereto as Attachment 1; (3) Authorizes the Executive Director to enter into and execute the MOU in substantially the same form as attached hereto as Attachment 1, and with any revisions, amendments, or modifications deemed necessary by counsel to the Agency to carry out the intent of this Resolution and which do not materially or substantially increase the Agency's obligations thereunder; and 2 (4) Directs the members, employees, officers, and agents of the Agency to jointly and severally do any and all things and to execute and deliver any and all other agreements deemed necessary to carry out, give effect to, and comply with the terms and intent of t his Resolution and the MOU as aNproved by this Resolution so iorig as such agree~r~ents do not materially or substantiall;r increase the Agency's obligations with respect to the MOU. T T T T T 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 regular meeting held on the day of 2009 by the following vote: AYES NOES: ABSTAIN: ABSENT: 1232065.1 ATTEST: City Clerk 3 RESOLUTION NO. REDEVELOPMENT AGENCi', CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AFPROVING A MEMORANDUM OF UNDERSTANDII~TG AMONG T HE CITY OF SOUTH SAN FRANCISCO, REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO AND THE SAN MATEO COUNTY HARBOR DISTRICT FOR POTENTIAL DEVELOPMENT OF THE OYSTER POINT 1`:~ARl'NA WHEREAS, the Redevelopment Agency of the City of South San Francisco ("Agency") is a redevelopment agency formed, existing and exercising its powers pursuant to the provisions the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 et. seq.); and, V~.THEREAS, the City Council of the City of South San Francisco ("City") has adopted a Redevelopment Pian for the Downtown/Central Project Area (as amended, the "Project Area"); and, WHEREAS, the City is the owner of certain real property located within the Project Area and commonly known as the Oyster Point Marina ("Marina Property"); and, WHEREAS, the City and the San Mateo County Harbor District ("District"} have established a joint powers authority that governs the development, operations, and maintenance of the Oyster Point Marina Property, including management of the Oyster Point Marina by the District; and, WHEREAS, the District has entered into certain long-term leases with King Ventures for certain portions of the Marina Property, which leases require King Ventures to develop, construct, and maintain a hotel and a commercial, village-style complex; however, to date, King Ventures has not accomplished the goals and obligations pursuant to the King Leases; and, WHEREAS, the District uses rent revenue from the King Leases to pay debt service on loans from the California Department of Boating and Waterways, which has a security interest in the King Leases; and, WHEREAS, Oyster Point Ventures LLC, a joint venture between Shorenstein Properties and SKS Investments LLC ("S/SKS"), has recently purchased the Oyster Point Business Park, which is adjacent to the Oyster Point Marina, for the purpose of developing the Oyster Point Business Park into a modern research and development life sciences campus; and, to WHEREAS, in collaboration with the City and Agency, S/SKS has proposed a public-private development approach that would result in an integrated development of the Oyster Point Marina and the Oyster Point Business Park, which requires collaboration amongst tre City, the District, the Agency and S/SKS; and, WHEREAS, the City and the District desire to provide for an assignment of the King Leases to S/SKS, and a collaborative process regarding future capital improvements, development and management at the iv`iarina Property, as the Parties anticipate that the operations at the Marina will benefit from the Project and the future proximity to the life sciences campus, but that the Project may have fiscal impacts on District's operations at the Marina Property; and, WHEREAS, City and Agency staff and the Harbor District have negotiated and developed anon-bindi_n_g Memorandum, of Understanding, attached to this resolution as Attachment 1 ("MOU"), that addresses the potential short-term fiscal impacts of the Project, the necessary planning activities to improve the Marina Property; and the ongoing management and operations of the Marina Property; and, WHEREAS, the MOU is a preliminary, non-binding agreement that does not commit the City to a definite course of action or foreclose consideration of alternatives; and certification of environmental review pursuant to the California Environmental Quality Act (CEQA) will be required prior approval of any land use entitlements for the Project; therefore, execution of this MOU is not an "approval" of a "project," as those. terms are defined in CEQA. NOW, THEREFORE, BE IT RESOLVED that the Redevelopment Agency of the City of South San Francisco hereby: (1) Finds and determines that the recitals are true and correct; (2) Approves the MOU in substantially the same form attached hereto as Attachment 1; (3) Authorizes the Executive Director to enter into and execute the MOU in substantially the same form as attached hereto as Attachment 1, and with any revisions, amendments, or modifications deemed necessary by counsel to the Agency to carry out the intent of this Resolution and which do not materially or substantially increase the Agency's obligations thereunder; and (4) Directs the members, employees, officers, and agents of the Agency to jointly and severally do any and all things and to execute and deliver any and all other agreements deemed necessary to .carry out, give effect to, and comply with the terms and intent of this Resolution and the MOU as approved by this Resolution so long as such agreements do not materially or substantially increase the Agency's obligations with respect to the MOU. 2 I hereby ceriify that the foregoing Resolution was regularly introduced and adopted by the Redevelopment Agency of the City of South San Francisco at a regular meeting held on the day of 2009 by the following vote: AYES: T?rJES: ABSTAIN: ABSENT: 1232046.1 ATTEST Agency Secretary 3 ~~ CRAFT 5!7/2009 MEMORANDUM OF UNDERSTANDING FOR REDE'`JELOPIYIENT OF OYSTER POINT MARINA a~ and among CITY OF SOUTH SAN FRANCISCO, SO ~TTH SAN FRANCISCO REDEVELOPMENT AGENCY, and GYSTER POINT VENTURES, LLC sf-2636168 ~3 TABLE OF CONTENTS Page Recitals ..................................................................................................................................1 Section, 1 Definitions ................................................................................................................2 Section 2 Purpose of this MOU ...............................................................................................4 Section 3 Preliminary Terms; No Obligation to Proceed ........................................................4 Section 4 Good Faith Efforts to Negotiate and Cooperate ......................................................5 4.1 Exclusive Rights to Negotiate ...................................... ............................................5 4.2 Obligation to Negotiate ir, Good Faith .....................................................................5 Section 5 Term; Schedule ........................................................................................................5 5.1 Term .........................................................................................................................5 5.2 Froject Schedule .......................................................................................................~ Section 6 Project Description ...................................................................................................~ 6.1 Life Sciences Ca_rnpus ....................................................................:.........................6 6.2 City Project ..............................................................................................................6 6.3 Infrastructure and Public Improvements ..................................................................6 6.4 Integrated Planning and Design ...............................................................................6 6.5 Anticipated Roles of Parties and Control of Development ................. .....................6 Section 7 Public Approvals; CEQA; Project Entitlements ......................................................7 7.1 Project Entitlements .................................................................................................7 7.2 City Approvals .........................................................................................................7 7.3 CEQA; Preparation of Environmental Impact Report .............................................7 7.4 RDA Land Use Authority ........................................................................................7 7.5 Timely Processing by City and RDA .......................................................................7 7.6 Other Governmental Approvals; Cooperation .........................................................8 Section 8 Owner Participation Agreement; Development Agreement ....................................8 8.1 Contemplated Agreements .......................................................................................8 8.2 Coordination of Agreements ....................................................................................8 Section 9 Property Exchange ...................................................................................................8 9.1 Exchange of Parcels .................................................................................................8 9.2 Due Diligence ..........................................................................................................9 Section 10 Environmental Matters .............................................................................................9 10.1 Environmental Remediation ....................................................................................9 10.2 Environmental Indemnification ...............................................................................9 ~ Oyster Point Marina Memorandum of Understanding sf-2636168 ~~ 10.3 Methane Monitoring ....-• ..........................................................................................9 Section 11 Project Development and Financing ......................................................................10 11.1 Development and Construction of Project .............................................................10 11.2 Permits and Approvals .......................................................... .................................10 11.3 Availa'oility of Public Services ............................................. .................................10 1 i .~+ Development Casts ............................................................... .................................10 11_.5 Infrastructure Fii~ancir~g ........................................................ .................................11 11.6 Title to Infrastructure; Dedications ....................................... .................................12 11.7 Relocation andlor Vacation of Public Rights of Way and Public Utilities .................................... . ............................................ ..................................12 i 1.8 Easements ............................................................................ ..................................12 Section 12 Cooperation ................................................................................ ..................................12 Section 13 Expenses .............................................................................. -, .................................. ~ ~ 13.1 Reimbursement by Developer .............................................. ..................................12 13.2 Deposit ................................................................................. ..................................13 13.3 Biannual Accourrtir~g ........................................................... ..................................13 13.4 Unanticipated Costs ............................................................. ..................................13 13.5 Insufficient Funds ................................................................ ..................................14 Section 1.4 Developer Access ................................................................. ..................................14 Section 15 Confidentiality; Dissemination of Information ......................................................14 Section 16 No Liability .......................................................................... ..................................14 16.1 Project Costs ....................................................................... ...................................14 16.2 Indemnification ................................................................... ...................................15 Section 17 Amendment of Agreement .................................................. ...................................15 Section 18 Termination; Effect of Termination; Enforced Delay ........ ...................................15 18.1 Process ................................................................................ ...................................15 18.2 Effect of Termination .......................................................... ...................................16 18.3 Enforced Delay ................................................................... ...................................16 Section 19 Notices ................................................................................ ...................................16 Section 20 Severability ......................................................................... ...................................17 Section 21 Entire Agreement; Amendments in Writing; Counterparts ...................................18 Section 22 Successors and Assigns; No Third-Party Beneficiaries ...... ...................................18 22.1 Request for Approval; Notice ............................................. ...................................18 22.2 Approval ............................................................................. ...................................18 ii Oyster Point Marina Memorandum of Understanding sf-2636168 IS 22.3 Transfer Not Requiring Approval ..........................................................................18 Section 23 Governing Lavv ...................................................................................................... i 9 Section 24 Relationship of Parties ...........................................................................................19 Section 25 Captions; Construction ...........................................................................................19 Section 2E No Brokers ................. ....................................19 ........................................................ Section 27 Third-Party Legal Challenge ..................................................................................19 Oyster Point Marina Memofandum of Understanding sf-2636168 ~~ 1VIEMOR.ANDUM OF UNDERSTANDING (Oyster Point Marina) THIS MEMORANDUM OF UNDERSTANDING (this "MOL"'), dated and made effective as of May , 2009 (the "Effective Date"), is entered into by and among the Cite of South San Francisco, a California municipal corporation ("City"), South Sar. Francisco Redevelopment Agency, a public body, corporate and politic ("RDA") and Oyster Point t~entures, LLC, a Delaware limited liability company ("Developer"). City, RDA, and Developer are hereinafter collectively referred to as the "Parties." RECITALS A. City is the owner of certain real property located in the City and commonly known as the Oyster Point Marina ("Marina Property"), as s hown on the parcel map attached hereto as M City and the San Nlateo County Harbor District ("harbor District") have entered . tl.~a into agreements related to the development, operations, and maintenance of the Marina Property, including a joint powers agreement pursuant to Government Code section 6500 et seq. ("JPA"). City desires redevelopment of the Marina Property including potential commercial and office research and deveiopment uses and public amenities. Developer is the owner of certain property located in the City, commonly known as the Oyster Point Business Park ("Business Park''}, and adjacent to the Marina Property as shown on ~;; . ~? . •. B. The Harbor District has entered into certain long-term leases with King Ventures for certain portions of the Marina Property ("King Leases"}, as shown generally on ": "~- t ~ :~ ` ". The King Leases require King Ventures to develop, construct, and maintain a hotel and a commercial, village-style complex, but to-date, King Ventures has not accomplished the goals and obligations pursuant to the King Leases. Developer has an option to acquire King Ventures' interests in the Marina Property, contingent upon the effectiveness of this 1`~IOU. C. Developer acquired the Business Park for the specific purpose of redeveloping the Business Park as a modern research and development life sciences campus with substantial public amenities. In light of discussions with City regarding redevelopment of the Marina Property, Developer proposed collaborative process to plan and carry out an integrated development of the Marina Property and the Business Park. This proposed collaborative development is referred to as the "Project," as more fully defined below. The Project is proposed to include an office!research and development life sciences campus, commercial development (including retail, restaurants, and hotel uses), and substantial public amenities, as described in greater detail in ',; •~.. - , ~ ; _ : _ and -"- ' ~ ~ " ~ ~. D. Upon the direction and authorization of the City Council, City and Developer entered into a Framework Agreement dated November 24, 2008 ("Framework Agreement"), which established the Parties' understanding of: (i) the components of the proposed Project; (ii) the process for and proposed conveyances of interests in the Marina Property and the King Leases; (iii) a proposed approach to public financing; (iv) anticipated Project entitlements; (v) an estimated schedule; and (vi) the roles and responsibilities of the Parties. Additionally, the Framework Agreement provides a process for negotiation and preparation of this MOU, the terms and conditions of which would establish a process and tentative agreements regarding conveyance of property interests and development of the Project. The Parties anticipate that MN 1179731-11 sf-2636168 l ~7 these agreements will include one or more agreements to exchange interests in the King Leases and portions of the Marina Property ("Conveyance Agreement"), an 0~,~~ner Participation Agreement or similar agreement ("OPA") to establish financing terms fer development of porticns of the r~larina Property, and a Development Agreement ("DA") to govern development of Project compcnen±s at tl,,e Business Parl: and portions of the Marina Properly. The Conveyyance Agreement, OPA, and DA would be acted on contemporaneously with the Project entitlements (including amendment to the JPA), but only following certification of an environmental impact report ("EiR"} for the Project. E. This MOU does not authorize the proposed construction of the Project or any other construction and will not result in either a direct or reasonably foreseeable indirect physical change in the environment; rather, this MOU only comrr~its the Parties to certain obligations related to the planning and negotiation of the property exchanges and development thereon as described herein. City, in conjunction ~~rith P.DA, pursuant to the California Environmental Quality Act (Section 21000 et seq. ofthe Public Resources Code, and the Guidelines set forth at 1 ~+ California Code of Regulations section 15000 et seq., "CEQA"), will prepare an EIR to evaluate the potential environmental impacts of the proposed Project. No construction will be authorized until (i) City, in conjunction with RDA, has prepared, certified as adequate and approved an EIR; (ii) City has approved the land use entitlements required for the Project; and (iii) any agreements or regulatory permits req~aired~by any other applicable regulatory agencies have been obtained. G. The Parties acknowledge that the effectiveness of any OPA will be contingent upon the approval of such OPA and related documents by RDA, and that the effectiveness of any Conveyance Agreement and DA will be contingent upon the approval of such Conveyance Agreement, DA and related documents by the City Council. F. The Parties recognize that the participation and cooperation of the Harbor District is essential to the implementation of the Project. Accordingly, the Parties are committed to engage in ongoing communications with the Harbor District regarding all aspects of the proposed Project and implementation processes that would affect the Harbor District. NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: Section 1 Definitions. "Business Park" shall mean the area currently owned by Developer and commonly known as the Oyster Point Business Park, as shown on "City/Harbor District MOU" shall mean anon-binding agreement among City, RDA and the Harbor District, entered in conjunction with this MOU, to establish a preliminary understanding among those parties regarding RDA's potential financial assistance to the Harbor District and the Harbor District's continuing role with respect to management of the Marina Property and the implementation of the Project. "City Project" shall mean the planning and development by City or its third-party designee of a "Ferry Village" and open space/recreational uses on the City Property, including associated Infrastructure Improvements, and including those Infrastructure Improvements that Developer intends to construct pursuant to the terms herein. 2 MN 1179731-11 sf-2636168 ~U "City Property" shall mean the portion of the Marina Property to be retained in fee ownership by City. "Commencement Date" shall mean the first date on which (i) City, RDA, and Developer have all duly approved and executed this MOU, (ii) City and Harbor District have both duly approved and executed the City/Harbor District MOU, and (iii) all other conditions to the effectiveness of the assignment of the King Leases have been satisfied, including consent b-y the California Department of Boating and Waterways, Harbor District, and City. "Conveyance Agreement" shall mean one or more agreement(s) executed by City and Developer to govern the transfer of the King Leases from Developer to City and the transfer of the Conveyed Property from City t~ Developer. "Conveyed Property" shall mean a portion of the Marina Property to be conveyed in fee ownership from City to Developer pursuant to a Conveyance Agreement and subject to the terms of an OPA. "DA" shall mean a development agreement to be entered between City and Developer, pursuant to Government Code section 65864 et seq., for development of the Developer Project. "Developer Project" shall mean the planning and development by Developer of a modern life sciences campus, including research and development and office uses, substantial public amenities, and open space development on the Developer Property, including associated Infrastructure Improvements, as further described in ~~ "~ _ _ : . "Developer Property" shall mean ail of the land currently owned and to be acquired by Developer, consisting of the Business Park and the Conveyed Property. "Effective Date" shall mean May , 2009, the date on which City, RDA, and Developer have all duly approved and executed this MOU. "Environmental Conditions" shall mean preexisting environmental conditions present on the Marina Property prior to conveyance of the Conveyed Property, including without limitation those identified in ~ " ~ it "Framework Agreement" shall mean that agreement between City and Developer, dated November 24, 2008, entered upon the direction and authorization of the City Council. "Harbor District" shall mean the San Mateo County Harbor District. "Infrastructure Improvements" shall mean those improvements contemplated for development of the Project, as set forth in ~~ "~ ~[ "JPA" shall mean the joint powers agreement entered on October 24, 1977 between City and the Harbor District, pursuant to Government Code section 6500 et seq., and as subsequently amended. "King Leases" shall mean certain long-term leases the Harbor District has entered with King Ventures for certain portions of the Marina Property, as shown on _.'~ ~ ~"~ °::, . "Marina Property" shall mean the area commonly known as the Oyster Point Marina property, as shown on the parcel map attached hereto as ' . .The Marina Property is comprised of the City Property and the Conveyed Property. MN 1179731-11 sf-2636168 ~~ "OPA" shall mean an Owner Participa±ion Agreement to be entered between RDA and Developer for redevelopment of tiie Conveyed Property. "Project" shall mean the proposed integrated deveiopment of the Marina Property and the Business Park. The Project is comprised of the Developer Project and the City Project, which the Parties intend to plan and carry out by a collaborative process. "Project E :titlements" shall 'nave the mea~iirig set forth m ~a ~ ~~~ of this MOU. "RDA" shall mean the Redevei_npment Agency cf the City of South San Francisco. "Redevelopment Plan" shall mean the Redevelopment Plan for the Downtown/Central Redevelopment Project, adopted by RDA on July 1'', 1979, and as subsequently amended. "Term" shall have the meaning set forth in - ~ ~~`;p~, ~~- ? of this iv10U. Section 2 Purpose of this MOU. This MOU is intended as an expression of preliminary points of agreement among the Parties. It is intended to provide a basis for: (i} conducting environmental review under CEQA by establishing an adequately specific description of a "project" for analysis under CEQA; (ii) ascertaining the riecessity and nature of various project entitlements and other governmental authorizations and approvals; and (iii} negotiating terms of a possible OPA, DA, and Conveyance Agreement, all of which would be subject to approval, following ail necessary public hearings, by the RDA and the City Council, respectively. Section 3 Preliminary Terms; No Obligation to Proceed. Nothing in this MOU creates a binding obligation, and no binding agreement will exist unless the Parties sign an OPA, a DA, and a Conveyance Agreement. Each Party expressly acknowledges and agrees that this MOU creates no obligation on the part of any Party to: (i) enter into an OPA, a DA, or a Conveyance Agreement; (ii) grant any approvals or authorizations required for the Project; (iii) agree to any specific terms or obligations; (iv) provide financing for the Project; or (v) proceed with the development of the Project; provided that, the Parties agree that ; " ~ ~;~ ~ ~ ~ ,: ~ . ~~, ~:,.' shall be binding upon the Parties. Except as set forth herein, all of the terms set forth in this MOU are preliminary in nature and subject to approval by each of the Parties; and memorialization in an executed OPA, DA, Conveyance Agreement and related documents. The provisions of this section are hereby incorporated into each and every section of this MOU as though set forth in their entirety in each such section. Section 4 Good Faith Efforts to Negotiate and Cooperate. 4.1 Exclusive Rights to Ne otiate. City and RDA each agree that they will not, during the Term of this MOU, directly or indirectly, through any officer, employee, agent, or otherwise, solicit, initiate or encourage the submission of bids, offers or proposals by any person or entity with respect to the acquisition of any interest in the Conveyed Property or the portions of the City Property on which Developer intends to construct Infrastructure Improvements, or the development of such property, and neither City nor RDA shall engage any broker, financial adviser or consultant to initiate or encourage proposals or offers from other parties with respect to the disposition or development of such property or any portion thereof. Furthermore, neither City nor RDA shall, directly or indirectly, through any officer, employee, agent or otherwise, engage in negotiations concerning any such transaction with, or provide information to, any person other than Developer and its representatives with a view to engaging, or preparing to 4 MN 1179731-11 sf-2636168 2~ engage, that person with respect to t_h_e disposition or development of the Conveyed Property or any portion thereof, or the portions of the City Property on which Developer intends to construct Infrastructure Improvements. 4.2 Obligation to Negotiate in Good Faith. This MOTJ oni_y birds the Parties to negotiate and cooperate in good faith for the purposes specified herein, and net to enter into any further agreement. City, RDA; and i~eveloper shall use reasonable efforts to complete negotiations for and preparation of an OPA, DA, Conveyance Agreement and related documents which shall set forth the terms and conditions governing disposition and development of the Project. Furthermore, the Parties shall use reasonable efforts to obtain any third-party consent, authorization, or approval required in correction with the transactions contemplated hereby. Section 5 Term; Schedule. 5.1 Tel~m. The term of this MOU (the "'T'erm") shall commence on the Commencement Date, and shall terminate five hundred forty days (540) days thereafter, unless extended or earlier terminated as provided herein. The Term may be extended for up to a maximum of three (3) additional thirty (30) calendar day terms, or as otherwise mutually agreed, upon the mutual written agreement of the Parties and approval by the City Council and RDA, provided that the activities contemplated herein have progressed to the satisfaction of the City Council and RDA in their sole discretion. 5.2 Project Schedule. Subject to further negotiation and unforeseen circumstances, the schedule attached hereto and incorporated herein as : 4 i°~xs~~ reflects both Parties' reasonable estimates of Project milestones, based on each Party's good-faith, diligent pursuit of their respective responsibilities, in compliance with applicable law. Section 6 Proiect Description. The Farties intend that the elements listed below be included in the Project, subject to compliance with CEQA and obtaining all necessary City land use entitlements and other governmental approvals. The following elements are depicted on the ~ ' p ilf Concept Plan attached as ; mn~,~ti, u~ ~ , "- ~~~ and are described in more detail in `,~ ~,~~~ ~~„. 6.1 Life Sciences Campus. Developer will plan and develop a modern life sciences campus, including research and development and office uses, and substantial public amenities ("Developer Project"). The Developer Project will be constructed across a portion of the Marina Property to be conveyed in fee ownership from City to Developer ("Conveyed Property") and the Business Park; collectively, the Conveyed Property and the Business Park shall be referred to as the "Developer Property." 6.2 City Project. The portion of the Marina Property to be retained by City ("City Property") generally will be planned and developed by City or its designee as follows; collectively, this portion of the Project is referred to as the "City Project." The Parties agree that Developer also intends to plan and develop certain portions of the City Project as set forth in '~ ,' 3 ~ ~~ 6.2.1 Ferr. V~ illage and Marina Facilities. A portion of the City Property will be planned and developed as a "Ferry Village," which will likely provide retail and commercial uses, food and beverage sales, and a hotel. 5 MN 1179731-11 sf-2636168 ~• t 6.2.2 Open Space and Recreation. The Project will provide for Harbor District and Marina uses and public openrecreational space, to be planned and developed on the City Property in conjunction with Harbar District as appropriate. 6.3 Infrastructure and Public Improvements. The Parties anticipate that certain infrastructure improvements and public amenities, as set forth in ~ "~ ` ° ~~~ ("Infrastructure Improvements"), will be required to implement the Projec±. 6.4 Integrated Planning and Design. 6.4. i The Parties intend to create an integrated plan and design for the Project, as generally outlined above. The Parties will further discuss and execute agreements that wil_1 address the compatibility of the City Property with the Developer Property. Such discussion will include proposed uses of the Developer's and City's respective Properties as set forth in .: ~~'~ ' . 6.4.2 In recognition of the va1_ue of maintaining integrated planning and consistency of development for the Project, at any time City or Ri~A should desire to offer any parcel or parcels of the City Property to be developed for uses that wculd be substantially similar to-the uses proposed to be developed on the Developer Property, City or RDA shall offer to, and upon indication of interest by, Developer, will enter into an exclusive negotiations agreement with Developer for the acquisition and development of such parcel or parcels. T'he term of the exclusive negotiations agreement shall be six (6j months, except as otherwise agreed upon by the Parties. 6.5 Anticipated Roles of Parties and Control of Development. Notwithstanding the Parties' intention that the Project be planned on an integrated basis as described in "ec~~, the Parties also intend that development will be carried out in two distinct parts: (i) Developer will be in sole control of planning and development of the Developer Project on the separately owned Developer Property and responsible for certain Infrastructure Improvements on certain portions of the City Property; and (ii) City (working in conjunction with any designated third- party contractor(s)) will be in sole control of planning and development of the City Project on the City Property. Except as provided herein, the Parties anticipate that the City Project will be constructed and operated by a third party. Neither Party shall have any responsibility for development of the portions of the Project on property owned by another Party except for certain Infrastructure Improvements as set forth in _ ' ~ ' - .. Section 7 Public Approvals; CEQA; Project Entitlements. 7.1 Project Entitlements. The Parties anticipate that the Project will require discretionary entitlements, approvals, authorizations, and agreements from City, RDA, and other regional, state, and federal entities ("Project Entitlements"), including those set forth in 7.2 Cit~pprovals. Developer will be responsible for obtaining all Project Entitlements from City and/or RDA for the Developer Project in accordance with City/RDA's standard application process for discretionary land use entitlements, including payment for all of City/RDA's costs of processing such approvals. Nothing set forth herein shall be construed as a 6 MN 1179731-11 sf-2636168 2 ~ grant of ar~y such Project Entitlements, or as an obligation on the part of City or RDA to approve such Project Entitlements. ?.3 CEQA; Preparation of Environmental Impact Report. Airy approval of a Project Entitlement by City and/or RDA shall be subject to and in full corr~piiar~ce with CEQA. IvTo construction or binding agreement between the Parties will 'oe authorized until (i) City, in conjunction with RDA, has prepared, certified as adequate and in full compliance witl, CEQA, and approved an EIR and related fndir.gs; (ii) City has approved the Project Entitlements over which it has jurisdiction; and (iii) any agreements or regulatory permits required by any other applicable regulatory agencies have been obtained. The Parties anticipate undertaking and completing a program level EIR under CEQA for the entire Project, including the Developer Project and the City Project, and a project level EIR under CEQA for eac'r~ phase of the Project. The program-level EIR will include a project level analysis for Phase I of the Project, as defined ~~. :~, in ', ~ ~u,~;,~ ~~;. Developer will take all actions necessary, including submission of all necessary reports and documents and payment of funds necessary for preparation of an EIR. 7.4 RDA Land Use Authority. RDA shall review all Project-related amendments to the General Pian and the Oyster Point Marina Specific Plan to determine the consistency of such amendments with the Redevelopment Plan. Such amendments must be determined by RDA to be consistent with the Redevelopment Plan prior to approval thereof by City. Except as set forth in this ~~; ` ."`: , .! RDA shall delegate to the City all land use authority over the Project, including, without limitation, the authority to review and approve all zoning entitlements, subdivision maps, and all design review approvals. 7.5 Timely Processing by City and RDA. Upon submission by Developer of all appropriate applications and processing fees for any Project Entitlement over which it has jurisdiction, City and/or RDA, as appropriate, shall promptly and diligently commence and complete all steps necessary to act on the Project Entitlement application including, without limitation: (i) providing at Developer's expense reasonable overtime staff assistance and/or staff consultants for planning and processing of each Project Entitlement application; (ii) if legally required, providing notice and holding public hearings; and (iii) acting on any such Project Entitlement application. City and/or RDA shall ensure that adequate staff is available, and shall authorize overtime staff assistance as may be necessary, to timely process such Project Entitlement application. To the extent practicable and in accordance with applicable law, the review and processing of applications for Project Entitlements will occur contemporaneously with preparation of the EIR for the Project. 7.6 Other Governmental Approvals; Cooperation. City and/or RDA shall cooperate with Developer in its efforts to obtain any permits or approvals as may be required from other governmental or quasi-governmental agencies having jurisdiction over the Project, including those listed above and others not listed above, and shall, from time to time at the request of Developer, join with Developer in the execution of such permit applications and agreements as may be required to be entered into with any such other agency, and will use reasonable efforts to enter into binding agreements with any such entity as may be necessary to ensure the timely availability of such permits and approvals. 7 MN 1179731-11 sf-2636168 Z~ Section 8 Owner Participation Agreement; Development A~rPement. 8.1 Contemplated Agreements. After completion of the rewired analysis pursuant to CEQA and the certification of a Finai EIR, and in the exercise of the full la~~rful discretion of City and/or RDA, as applicable, the Parties may enter into (i) an SPA that will, except as modified by the mutual consent of the Parties, be based on the terms set forth in : ~ ~.~; : ~ ~ ":. below aiid in ~` _ ~~ .~ , ii) a DA to be based enerall on the terms set forth it ~~ ' ` ,and (iii) a Conveyance Agreement, to be based generally on the terms set forth in ~; _.~~. The ..~~ .~ terms of the OPA, DA and Conveyance Agreement, set forth below and in the Exhibits, are expressly subject to and shall be modified as necessary to allow implementation of the mitigation measures in the Finai EIR for the Project or an alternative project design that may be identiried and selected by the City and./or RDA as tl-ie environmentally preferred alternativ?. 8.2 Coordination of Agreements. The Parties anticipate a single, coordinated process to plan and prepare- the ?PA, DA, and Conveyance Agreement concurrently, resulting in an integrated Project as stated in ~ ~ ~ To the extent practicable and in accordance wit h applicable law, the negotiation and drafting of the Conveyance Agreement, OPA, and DA will occur contemporaneously with preparation of the EIR for the Project, subject to any modifications necessary to comply with X11 applicable laws. Section 4 Property Exchange. 9.1 Exchange of Parcels. 9.1.1 Property to Be Exchanged. The Parties anticipate creation of new legal parcels to facilitate the conveyance of property interests pursuant to the OPA. The future parcels to be exchanged by the Parties pursuant to this b~ ,~ ';. are as depicted generally on ~~~~~~~,; 9.1.2 Conveyances Between the Parties. At such time as the Parties are prepared to initiate construction of the Infrastructure Improvements, and subject to satisfaction of the conditions set forth in the Conveyance Agreement, the Parties anticipate that the following actions will take place: A. Pursuant to the Conveyance Agreement, Developer will convey to City, and City will accept from Developer, Developer's interest in the King Leases. Following the conveyance, and any necessary consent from the I-larbor District and the California Department of Boating and Waterways, the King Leases will be terminated. Developer shall remove any liens, encumbrances, or sub-leases, except as agreed by the Parties. B. City shall convey to Developer, and Developer shall accept from City, fee title to the Conveyed Property, which will consist of approximately 14.28 acres, in accordance with the terms, covenants and conditions set forth in the Conveyance Agreement. The conveyance of the Conveyed Property from City to Developer shall be accomplished through the Conveyance Agreement and by recordation of a grant deed and an amendment to the JPA. 8 MN 1179731-11 sf-2636168 2~{ 9.2 Due Diligence. The Parties intend to conduct due diligence for the property conveyances in accordance with the terms and process set forth in ~ ~~• Section 10 Environmental Matters. 10.1 Environmental Remediation. The Parties anticipate that development of the Project on the 1Vlarina Property will require environmental remediation and related geotecru~ical work, including cleam~p of sumps on the i/Iarina Property, a methane monitoring system as set forth in Section 10.3, relocation of refuse, and repair of the cla}~ cap covering the landfill. The Parties agree to allocate costs fo_r these remediation activities as set forthin ~,~„~~ ~~• 10.2 Environmental Indemnification. With respect to preexisting environmental conditions present on the Marina Property, including those identified in >>~h~~ts~ ,~'~ ~~~, ("Environmental Conditions"), the Parties intend that, both before and following Developer's acquisition of the Conveyed Property, City shall _re±ain responsibility for all such Environmental Conditions. City shall indemnify, defend, release, and hold harmless Developer in connection with any costs or claims arising from or otherwise related to the Environmental Conditions; provided, however, that Developer understands that it will be responsible for payment of the costs incurred in furtherance of the remediation activities contemplated in ~~~ ~`~~ ~. The City shall have no obligation to defend, indemnify or hold Developer harmless for, and Developer. understands that , as respects City and RDA, Developer will be solely responsible for, remedia±ion, damages, penalties, or other costs to the extent arising from or otherwise related to (i) a~~y releases of hazardous materials that are brought on to the Conveyed Property by Developer or its agents after the acquisition; (ii) exacerbation of the Environmental Conditions arising from Developer's negligence, gross negligence, willful misconduct, or failure to conduct the remediation in compliance with applicable environmental laws. 10.3 Methane r~~onitoring. The Parties irterd that City andlor Harbor District shall retain responsibility for monitoring landfill-related methane releases on the City Property and the Developer Property, as well as maintenance, repair, or replacement of the equipment and systems necessary to conduct necessary monitoring. Developer does not through this VIOU, and will not through the OPA or any future agreement relating to the Project, acquire responsibility to carry out methane monitoring or related maintenance, repair, or replacement on the City Property or Developer Property, or any other environmental assessment, stabilization, remediation, or associated costs. Notwithstanding the foregoing, the Parties intend that (i) Developer will fund initial installation of methane monitoring systems on the Conveyed Property, as set fortr~ in ,~ ~ ' . ~ , and (ii) Developer will cooperate to the extent reasonably necessary in methane monitoring activities conducted by City or a third party. Section 11 Project Development and Financing. 11.1 Development and Construction of Project. The Parties contemplate that Developer will develop and construct the Developer Project in accordance with the terms set forth in ~' - S ~ " "..'Y `~ ~, and that RDA and City (or their contractors, lessees or agents) will develop and construct the City Project, in accordance with high and consistent standards for private and public facilities, respectively. Without limiting the effect of the foregoing, the MN 1179731-11 sf-2636168 ZS Parties anticipate that the OPA will allocate to Developer responsibility for construction of certain Infrastructure Improvements in furtherance of the City Project as set forth in f~~; .t~. 11.2 Permits and Approvals. Leveloper will timely submit to the appropriate City agencies design and related documents required by applicable laws required for land use approvals and building permits. Developer acknowledges that the execution of the DA by City does not limit in any manner the discretion of City ir, the approval process in accordance with applicable la~~~s. City staff will work cooperatively with Developer to assist in coordinating the expeditious processing and consideration of all relevant Project Entitlements. Developer will promptly pay when due all. fees and charges required in connection with the processing of pe :mits and approvals by City, Co~~nty and all other governmental or nor_aovernmental agencies with jurisdiction over the Project Entitlements, as set forth ir, °;;, -~ " i~: °. - 11.3 Availability of Public Servic°s. To the maximum extent permitted by law and consistent with its authority, the Parties intend that the_DA will include a provision pursuant to which the Cit}~ shall assist Developer in reserving such capacity for services as may be necessary to serve the Project. The minimum sewer capacity to be reserved for the Project shall be established by a Final EIR for the Project. 11,4 Developmer_t Costs. The Parties have esti_r~ated the cost of certain Infrastructure Improvements (the "Improvement Costs"), as set forth in ~''~ ~_~~~~ ;: ~; :. The Parties anticipate that the OPA will allocate responsibility for payment of the Improvement Costs as set forth in ~~,~ ~ '~ ' ,however, the amount of the Improvement Costs shall be (i) further refined in connection with the preparation of detailed plans and specifications for the Infrastructure Improvements, (ii) appro :red by the Parties, and (iii) subject to final approval memorialized in the OPA based on such updated cost estimates. When developing particular Infrastructure Improvements, any cost overruns will be paid by, and any cost savings will be retained by, the Party responsible for funding those Infrastructure Improvements (or, as applicable, by each Party in proportion to its responsibility to fund such improvements). Notwithstanding the foregoing, the Parties anticipate that each Party will pay all other direct and indirect, foreseen or unforeseen, costs associated with the development of the Project on its respective separately owned Prcperty. 11.5 Infrastructure Financing. In order to finance a portion of the Improvement Costs, the Parties intend to utilize public finance mechanisms allowed under California law, including, without limitation, one or more of the mechanisms set forth below. To the extent practicable and in accordance with applicable law, the negotiation and drafting of any agreernents or other documents relating to public financing will occur contemporaneously with preparation of the program level EIR for the Project. 11.5.1 CommunitYFacilities District for Public Improvements. The City, upon request of Developer, intends to form one or more community facilities districts ("CFD") and levy a special tax on the Developer Property included in such CFD solely in order to defray certain of the Improvement Costs, including without limitation, construction, engineering, environmental remediation, financing, land acquisition (if necessary), and other costs related to the Infrastructure Improvements in Phases ID, IC, and IID-IVD, as identified in :'.~"~ The City may commence the process for formation of the CFD promptly following execution of the OPA. Subject to prior agreement between City and Developer regarding the formation of such 10 MN 1179731-11 sf-2636168 ~~ CFD and the terms thereof, Developer shall consent to the formation of such CFD and the levy of special taxes to defray the Improvement Costs, including costs for those Infrastructure Improvements to be located on the Developer Property. Subject to prior agreement between City aiid Deveioper regarding the formation of such CFD and the terms thereof, Developer agrees not to protest the formation of such district or levying of special taxes thereunder and, i f an election is required for formation of the CFD and/or levy of special taxes, Developer agrees to vote in that election and agrees to vote in favor of the formation of the CFD and/or levy of a special- tax. In any leases or agreements for sale of the Developer Property periiiitted by the City, Developer shall include provisions that assure that any right of consent, right tc protest or right to vote on formation of a CFD or levy of a special tax that is held by the tenant or transferee is exercised in the same manner as is required of Deveioper in this Section. Developer acknowledges and agrees that nothing in this MOU or the OPA will limit the legislative discretion of City to form a CFD or to act on protests or objections made in connection with formation of such district or the levy of any special tax by the district. 11.5.2 RDA Payment of Special Tax. To the extent permitted by law, the City may elect to include any portion of the City Property within the bo»ndaries of a CFD established under H ~.- ~ d ~ ~.~ ~;~:,, above. In the event City makes such election, RDA will pay or cause the payment of any special taxes imposed by such CFD with respect to the City or ar~y improvements thereon.- 11.5.3 RDA Payment of Improvement Costs. The OPA will provide that, upon commencement of construction of certain Infrastructure Improvements, RDA will make a payment to Developer for a portion of the Improvement Costs (the "RDA Funding Requirement"). Notwithstanding the foregoing, Developer acknowledges and agrees that RDA will only be obligated to pledge and pay the RDA Funding Requirement in the event that Developer has undertaken or completed development and construction of such portion of the Infrastructure Improvements as set forth in the OPA. The OPA will set forth a payment system (such as requisition requests) for the RDA Funding Requirement, including a schedule for phased payments during each phase of the Project consistent with ~ , "" "-"' ; _ ~. Developer will be responsible for all Improvement Costs not paid by the RDA Funding Requirement. 11.5.4 RDA Budget. "the OPA will contain a provision that requires that RDA will include the RDA Funding Requirement pledge in its annual budget and will make timely application for and submit all documentation required to the allocation to RDA of the RDA Funding Requirement within the times and in the amounts required to fulfill RDA's obligations hereunder. RDA will take all actions and budget all amounts, including prepayments or additional payments if necessary, in order to fulfill and satisfy RDA's obligations under the MOU and this OPA prior to expiration of any applicable time limits with respect to RDA's ability to do so under the Redevelopment Plan. 11.5.5 Existing Assessments. The Parties understand and agree that as of the Effective Date, the fees, taxes, exactions, dedication obligations, and assessments (collectively, "Assessments") listed in ~~;; ' ~ are the only City Assessments. City is unaware of any pending efforts to initiate, or consider applications for new or increased Assessments covering the Marina Property or Business Park, or any portion thereof, except for those pending efforts described on ~ : ~ ~;, ~ ~ .. In order for Developer to accurately predict the feasibility of the MN 1179731-11 sf-2636168 ~~ Project, and material to Developer's willingness to make the commitments contemplated herein, the Parties intend that, as of the effective date of the DA_, the DA will vest Developer's right to develop the Project subject only to the Assessments listed on !:~~ ~~~~ -. 11.E Title to Infrastructure; Dedications. The Parties anticipate that, following construction of the public Infrastructure Improvements, the Improvements will be dedicated to City, acid City will assume responsibility for rr~aintenancc, repair, and replacement, subject to the expiration of typical warranty periods otherwise applicable within the City. 11.7 Relocation and/or Vacation of Public Rights of Way and Public LTtilities. In order for development of the Project to occur in accordance ;:pith the Concept Plan, portions of certain public rights-of--way and public utilities that run through tl"ie Marina Property mast be vacated by the City, and the vehicular circulation on the Marina Property must be reconfigured. Without limiting City's discretion in its consideration of a future application for the relocation or vacation of any public rights-of=way or public utilities, City shall accept and process in good faith any sucl-~ application submitted by Developer in connection with the Project and consistent with the Concept Plan. 11.8 Easements. Developer will execute appropriate documents providing for the recordation of easements and/or license agreements, at no cost to the C ity, for the public infrastructure Improvements to be constructed on the Developer Property as identified in ~ ° ~ `,>~; ~. Section 12 Cooperation. Each Party agrees: (i) to furnish upon request to each other Party such further information; (ii) to execute and deliver to each other Farty such other documents, and execute such instruments and applications; and (iii) to do such other acts and things, all as another Party may reasonably request for the purpose of carrying out the intent of this IV1OU. Section 13 Expenses. 13.1 Reimbursement by Developer. Developer shall pay or reimburse all subsequent costs and expenses (including but not limited to legal fees and consultant costs) incurred or paid by City and RDA in connection with this MOU and the activities contemplated hereby (including without limitation, the analysis of Project pro formas, the negotiation and preparation of an OPA and DA, the preparation of surveys, the preparation of any reports required by Redevelopment Law (Health 8c Safety Code Section 33000 et seq.), if applicable, the undertaking of any actions necessary for the conveyance of the Conveyed Property or any portion thereof, and compliance with all other required statutory procedures), except as the Parties otherwise may agree. Within ninety (90) days of the Effective Date, the Parties shall meet and confer to prepare an initial budget for the foregoing costs. City will provide Developer in advance with the rates to be charged by each City department and each outside consultant to City and/or RDA and descriptions for work under this MOU, including the scope and estimated budget of the City's costs and such outside consultant costs for work under this MOU. 13.2 Deposit. Within five (5) business days of the Effective Date, Developer shall ensure that $50,000 is on deposit with City for the initial costs set forth herein, including any remaining funds Developer previously placed on deposit with City pursuant to the Framework MN 1179731-11 sf-2636168 12 Agreement, which the Parties agree shall carry over to satisfy the terms of this Section. At any such time that City provides written notice to the Developer that the amount on deposit is beio :v $20,000, Developer shall within ten (1.0) business days deposit are additional $50,000 with City. 13.3 Biannual Accounting. Commencing on July 31, 2009 and continuing e:Tery six (6) months thereafter, City and RDA will provide Developer witl-i a written accounting of costs incurred pursuant tv this MOL' by the City and RDA during the prior six months (either January thro~agr~ June or July through December). The Parties agree that the first report will cover January 1, 2009 through June 30, 2009. The Parties also agree that during the final month of each six-month period identified above, City and RDA wiil provide a ~,uritten estimate of the costs to be incurred and a description of the work to be performed during the follo~~ing six- rizonth time period. Within ilfteen (IS) days of receiving the City and RDA report, the parties shall arra_n_ge fora "meet and confer" to review the submission and to agree on a budget for the upcoming six-month period. The meet and confer process need not be lengthy or in person. "rhe Parties agree to work cooperatively and in good faith in this biannual process to set mutually acceptable budgets for City and RDA's work pursuant to this l~/IOTJ. In light of those budgets, Developer will replenish the Developer Project Account from time to time through additional wire transfers or other appropriate methods of payment. :~~ith regard to the consultant costs for preparation of the environmental impact report and the Redevelopment Pian amendment, Developer agrees that it shall deposit the full amount of those consultant contracts prior to City and/or RDA issuing a notice to proceed to the consultants. 13.4 Unanticipated Costs. I:f at any point, City and/or RDA reasona'ly anticipate that it or they will encounter costs pursuant to this MOU that (1) have not previously been addressed through the biannual submission/meet and confer process and (2) cannot reasonably be addressed through existing uncommitted funds in the respective accounts, City and/or RDA will provide Developer with a written explanation of the circumstances giving rise to such out of the ordinary course costs. The parties will thereafter promptly meet and confer to resolve the issue in a mutually acceptable manner. 13.5 Insufficient Funds. If Developer elects not to provide additional funds as requested by City and/or RDA, or to the extent that there are insufficient funds to support continuing costs and expenses incurred by City and/or RDA consistent with the terms of this MOU, City and/or RDA shall have no further obligations under this MOU or to continue processing Developer's applications and/or the Redevelopment Plan until such time as additional funds from Developer are deposited. In addition, City and RDA will not authorize additional consultant contracts or authorize additional work by consultants related to the Project Entitlements identified in :;"~: _ '~~ unless: (1) such work is necessary for City or RDA to satisfy any state or federal requirements, and (2) Developer has not submitted a written request to the City to withdraw its application for all Project Entitlements identified in _':, , of this MOU. Section 14 Developer Access. During the Term, City shall provide Developer access to the Marina Property and will cooperate with the Developer to enable Developer or its agents, employees, consultants, contractors, or subcontractors to obtain access to the Marina Property for the purpose of obtaining data and making tests necessary to investigate the condition of the Marina Property, provided that Developer complies with all safety rules and does not 13 MN 1179731-11 sf-2636168 2~( unreasonably interfere with the operations of any current tenants. Developer's inspection, examination, survey ar~d review of the Marina Property will be at Developer's sole expense. Developer sl'iail provide City with copies of all reports and test results related to the Mariiza Property promptly following completio:: of such reports and testing. Except as othei-v~~ise agreed upon by City in writing, Developer shall repair, restore and return the Marina Property and any improvements thereon to their cr_~ndition immediately preceding Developer's entry thereon at Developer's sole expense. Developer shall at all times'~:eep the iv'larina Property free and clear of all liens and encumbrances affecting title to the Marina Property. V4'itho~at limiting any other indemnity provisions set forth in this MOU, Developer shall indemnify, defend (in accordance with the procedure set forth ir. M .?:,- '':)and hold City and its respective elected and appointed officers, officials, employees, agents and representatives (all of the foregoing, collectively hereinafter the "Indemnitees") harmless from. and against all liability, Ioss; cost, claim, demand, action, suit, legal or administrative proceeding, penalty, deficiency, fine, damage and expense (including, witl-io~at limitation, reasonable attorneys' fees and costs of litigation) (all of the foregoing, collectively hereinafter "Claims") resulting from or arising in conr_ection with entry upon the Marina Property by Developer or Developer's agents, employees, consultants, contractors or subcontractors pursuant to this Section 15 Confidentiality; Dissemination of Information. The Parties hereby incorporate by reference the Confidentiality Agreement errtered between the Parties, effective as of April 1 ~, 20C9, and attached hereto as :-. a „ ` ~ -~~ . Section 16 No Liability. 16.1 Project Costs. Developer hereby acknowledges and agrees that City and RDA have no obligation whatsoever to accept or approve of any OPA, DA, Conveyance Agreement, or related Project Entitlements proposed in this MOU. Accordingly, City and RDA shall have no obligation whatsoever to reimburse Developer for any costs incurred by Developer during the Term, including reimbursement costs for City and/or RDA retained consultants. 16.2 Indemnification. 16.2.1 Developer hereby covenants, on behalf of itself and its permitted successors and assigns, to indemnify, hold harmless and defend (in accordance with the process set forth in ~;,;,;,..: )Indemnitees from and against all Claims and liability, resulting from or arising out of the actions of Developer or its agents, employees, consultants, contractors, or subcontractors pursuant to this MOU; provided however, Developer shall have no indemnification obligation with respect to Claims resulting from or arising out of the gross negligence or willful misconduct of any Indemnitee. 16.2.2 The obligations of Developer under this indemnification shall survive the termination of this MOU, regardless of whether any approvals, permits or entitlements are granted by City. Notwithstanding the foregoing, the Parties anticipate that the Conveyance Agreement, OPA, and DA will each contain indemnification provisions relating to the subject matter of each agreement and that such indemnification provisions will supersede the indemnification provided under this MOU. 14 MN 1179731-11 sf-2636168 3d 16.2.3 City and RDA will promptly notify Developer of any Claim that is or may be subject to this indemnification and will cooperate fully in the defense. 16.2.4 City anchor r'ZDA may, in its respective discretion, participate in the defense of any Claim if City and/or RDA defends the Claim in good faith. To the extent tr~at City andlor RDA uses ar~y of its resources responding to a Claim, Developer shall reimburse City and RDA its respective reasonable expenses upon demand. Sue h expenses include, but are not limited to, staff time, court costs, legal. _fees (City Attorney's time at their regular rate for external or non-City agencies or retained outside counsel), and any other direct or indirect cost associated with responding to the Claim. 16.2.5 Developer shall pay all court-ordered costs ar~d attorney fees, except for those relating to Claims arising out of the gross negligence or willful misconduct of any Indemnitee. Section 17 Amendment of Agreement. This MCU may be amended from time to time, in whole or in part, by mutual written consent of the Parties hereto or their successors in interest. Section 18 Termination; Effect of Termination; Enforced Delay. 18.1 Process. This MOU may be terminated at any time by rrmutual written consent of the Parties. City shall have the right to terminate this 1`/IOU upon its good faith determination that Developer is not proceeding diligently and in good faith to carry out its obligations pursuant to this MOU. City shall exercise such. right by providing, pursuant to a duly adopted City Council resolution, at least ninety (90) days' advance v~7itten notice to Developer which notice shall describe the nature of Developer's default hereunder. Notv.~ithstanding the foregoing, if Developer commences to cure such default within such 90-day period and diligently prosecutes such cure to completion within the earliest feasible time but not later than ninety (90) days following the date of the notice, this MOU shall remain in effect. Developer shall have the right to terminate this MCU, effective upon thirty (30) days' written notice to City, if (i) the results of its investigation of the Marina Property are unsatisfactory with respect to Developer's desired redevelopment activities; (ii) Developer is unable to obtain other necessary approvals, rights or interests; or (iii} Developer determines, in its sole discretion, that proceeding with the Project will not be financially feasible. Neither Party shall have the right to seek an award of damages as a result of the termination of this MOU pursuant to this Section, unless made in bad faith. 18.2 Effect of Termination. Upon termination as provided herein, or upon the expiration of the Term and any extensions thereof without the Parties having successfully negotiated a DA, an OPA, a Conveyance Agreement, and related documents, this MOU shall forthwith be void, and there shall be no further liability or obligation on the part of either of the Parties or their respective officers, employees, agents or other representatives; provided however, the provisions of (Expenses), _~• ~ -; (Developer Access), ' :'. •. y, (Confidentiality), (Indemnification) and ~; -~ ,y (No Brokers) shall survive such termination. 18.3 Enforced Delay. Performance by any Party shall not be deemed to be in default, and all performance and other dates specified in this MOU shall be extended where delays are 15 MN 1179731-11 sf-2636168 3( due to: war, insurrection, strikes, lockouts, riots, foods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, governmental restrictions or priority, litigation, including court delays, unusually severe weather, acts or omissions of another Pariy, acts or failures to act of other public or governmental agency or entity, or any other cause 'oeyond tree affected Farty's reasonable control. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the Party claiming sacl-i extension is sent to the other Pariies within thirty (30) days of the commencement of the cause and such extension is not rejected in writing by the other Parties within ten (10) days of receipt of the nonce. No Farty shall unreasonably withhold consent to an extension of time pursuant to this Section. See±ion 19 Natices. Except as otherwise specified ire this MOU, all notices to be sent purs»ant to this MOU shall be made in writing, and seat to the Parties at their respective addresses specified 'below or to such other address as a Party nay designate by written notice delivered to the ether Parties in accordance with this Section. `All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; or (iv) facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first- class or certified mail or by overnight delivery; or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on anon-business day. City: City of South San Francisco 400 Grand Ave. South San Francisco, CA 94080 Attn: City Manager Phone: (650) 829-6620 Facsimile: (650) 829-6623 Agency: Redevelopment Agency of the City of South San Francisco 400 Grand Ave. South San Francisco, CA 94080 Attn: Executive Director Phone: (650) 829-6620 Facsimile: (650) 829-6623 16 MN 1179731-11 sf-2636168 3Z `J~ith a copy to: Meyers Iv'ave 575 Market Street, Suite 2600 San Francisco, CA 94105 Attn: Ste~~en T. Mattas Phone: (415) 421-3711 Facsimile: (415) 421-3767 Developer: SRI Nine Oyster Point LLC 235 Montgomery Street, 16th Floor San Francisco, CA 94104 Attn: Todd Sklar P hone: (415) 772-7069 Facsimile: (415) 772-7148 With copi::s to: Oyster Point Ventures LLC 601 California Street, Suite 1310 San Francisco, CA 94108 Attn: Paul Stein. Phone: (415) 421-8200 Facsimile: (415)-421-8201 Morrison ~ Foerster LLP 425 Market Street San Francisco, CA 94105 Attn: Zane O. Gresham Phone: (41 S) 268-7000 Facsimile: (415) 268-7522 Section 20 Severability. If any term or provision of this MOU or the application thereof snail, to any extent, be held to be invalid or unenforceable, such term or provision shall be ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining terms and provisions of this MOU or the application of such terms and provisions to circumstances other than those as to which it is held invalid or unenforceable unless an essential purpose of this MOU would be defeated by loss of the invalid or unenforceable provision. Section 21 Entire Agreement; Amendments in Writing; Counterparts. Except as expressly set forth herein, this MOU contains the entire understanding of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral and written, between the Parties with respect to such subject matter. This MOU may be amended only by a written instrument executed by the Parties or their successors in interest. This MOU may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. Section 22 Successors and Assigns; No Third-Party Beneficiaries. This MOU shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns. Subject to approval by City as to qualifications and financial capabilities of Developer's 17 MN 1179731-11 sf-2636168 33 assignee, Developer may transfer or assign all or any portion of its interests, rights or obligations under this MOU to any third party or parties acquiring an interest or estate in the Project or any portion thereof including, without lirriitation, purchasers or ground lessees of lots, parcels, or facilities. 22.1 Request for Approval; Notice. For any transfer or assignment that requires City's approval, Developer shall noti~r City in w-rir_ing of its request for consent, which notice shall incl~~de: (i) the proposed effective date of transfer or assignment (which shall not be less than thirty (30) days nor more than three-hundred sixty-five (365) days after Developer's notice; (ii) the name and address of the proposed transferee, and (iii) current, audited financial statements of the proposed transferee certified by an officer, partner, or owner thereof anu any other relevant information pertaining to the proposed transferee's qualif cations or financial capabilities that Ciry may reasonably and timely request. ~ ~rw "~°~'1~'" x"' 22.2 Approval City may refuse to give its consent under this o~ o„ly if, in light of the proposed transferee's development experience and financial resources, such transferee would not, in the City's reasonable opinion, be able to perform the obligations proposed to be assumed by such assignee. In making such determination, the City shall evaluate: (i) the financial ability of the proposed transferee to own and develop the Project, or portion thereof so transferred; and (ii) the fitness and experience of the proposed transferee and its senior managerial personnel to own and develop the Project or portion thereof so transferred. Such approval by City shall not be unreasonably delayed, conditioned, or v~~ithheld. Failure of City to notify Developer ir. writing of its consent or disapproval within forty-five (45) calendar days of written notification by Developer to City of a proposed transfer shall be deemed to be an approval of the proposed transfer. 22.3 Transfer Not Requiring Approval. Notwithstanding the foregoing, Developer shall be permitted to assign this MOU without City or RDA consent to an entity or entities controlled by Developer (or either owner of Developer) or under common control with Developer (or either owner of Developer), provided that Developer owns and controls no less than fifty percent (~0%) of such successor entity. Subject to the immediately preceding sentences, this MOU is not intended to benefit, and shall not run to the benefit of or be enforceable by, any other person or entity other than the Parties and their permitted successors and assigns. Section 23 Governing Law. This MOU shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. All disputes arising hereunder shall be heard in courts having jurisdiction in San Mateo County, California. Section 24 Relationship of Parties. The Parties agree that nothing in this MOU is intended to or shall be deemed or interpreted to create among them the relationship of lessor and lessee, buyer and seller, or of partners or joint venturers. Section 25 Captions; Construction. The captions of the sections and articles of this MOU are for convenience only and are not intended to affect the interpretation or construction of the provisions hereof. The provisions of this MOU have been jointly drafted by the Parties and will 18 MN 1179731-11 sf-2636168 3`~ be constn~ed as to the fair meaning and not for or against any Party based upon any attribution of such Party as the sole source of the language in question. Section 26 No Brokers. Each Party vaarrants and represents to the other that no brokers have been retained or consulted in connection with this transaction other than as disclosed in ~~,rriting to the other Party. Each Party agrees to defend, indemnify and hold 'Harmless the other Parties from any Maims, expenses, cOJtJ or liabilities arising in cor~r~ection with a breach of this warranty and representation. The terms of this Section shah s~arvive the expiration or earlier termination of this MGTJ. Section 27 Third-Party T.e~al Challenge. In the went of any administrative, legal, or equitable action or other proceeding instituted by any person not a party to this iV10U challenging the validity of this iv10U c-r any Project Entitlement; or in the event of a claim hereunder requiring Developer to indemnify City and/or RDA pursuant to ~~~~ ~{~ ~~ hereof, the Parties shall cooperate in defending such action or proceeding. City ailrl.lor RDA shall promptly notify Developer of any such action against City and/or RDA. If City and/or RDA fails promptly to notify Developer of any legal action against City and/or RDA or if City and/or RDA fails to cooperate in ±he defense, Dev?1_oper shall not thereafter be responsible for City's defense. TI'ie Parties shall use best efforts to select mutually agreeable legal counsel to defend such action, and Developer shall pay the fees and expenses for such legal cour~sei (including City Attorney time and overhead for the defense of such action), but shall exclude City staff overhead costs and normal day-to-day business expenses incurred by City. In the event City and Developer are unable to select mutually agreeable legal counsel to defend such action or proceeding, each Party may select its own legal counsel and Developer shall pay its and City and/or RDA's legal fees and costs. Developer's obligation to pay for legal counsel shall not extend to fees incurred on appeal unless otherwise authorized by Developer. City shall not reject any reasonable settlement. If City does reject a settlement acceptable to Developer, which settlement would not increase materially any casts or expenses to be incurred by City or RDA and does not include a material change to the Project, City and/or RDA may continue to defend such action at its own cost and risk. SIGNATURES ON THE NEXT PAGE 19 MN 1179731-11 sf-2636168 35 IN WITNESS WHEREOF, the Parties have executed this Memorandum of Understanding effective as of the date first written above. CITY AGENCY CITY CF SOUTH SAN FRANCISCO, a m~inicipal corporation By REDEVELOPMENT AGENCY OF THE CITY OF SOUTIi SAN FRANCISCO, a p»blic body, corpora±c and politic By: Name: Name: City Manager Executive Director ATTEST: ATTEST: By: BY~ City Clerk Agency Secretary APPROVED AS TO FORM: APPROVED AS TO FORiv1: By: BY~ City Attorney Agency General Counsel 1179731-11 20 Oyster Point Marina 3/ Memorandum of Understanding l~ DEVELOPER O'U'STER POINT VENT"uRES L.LC, a Delaware limited iiatiility company By: SRI Nine Oyster Point LLC, a Deiaware limited liability company; its Managing Member By: Name: Its: By: SKS Oyster Point, LLB, a Delaware limited liability company, its Member By Name: Its 1179731-11 21 Oyster Point Marina 3-7 Memorandum of Understanding EXHIBITS TO MEMOR,NDUM OF UNDERSTANDING FOR REDEVELOPMENT OF OYSTER POINT MARINA by and among CITY OF SOUT?I SAN FRANCISCO, REDEVELOPMEN T AGENCY OF THE CITY OF SOTJTH SAN FRANCISCO and OYSTER PCINT VENTURES, LLC SSF DRAFT 5/6/~OQ9 MN 1 1 95207-1 0 sf-2634417 2~, Fxhihit T,ist Exhibit A: Existing Parcel Map Exhibit B: Estimated Project Schedule Exhibit C: Concept Plan Exhibit D: Project Description Exhibit E: Project Entitlements Exhibit F: OPA Provisions Exhibit G: DA Provisions Exhibit H: Future Parcel Map Exhibit I: Property Convcyar~ces Exhibit J: Infrast1~~cture Development and Financier Exhibit K: Existing Environmental Conditions Exhibit L: Fees, Taxes, Exactions, DE;dication~Obligations, and Assessments Exhibit M: Confidentialit~AQreement of April 15, 2009 MN 1195207-10 sf-2634417 `~~ Exx~st~:r A: xistin~ Parcel Map This Exhibit depicts the boundaries of t:he parcels comprising the Marina Property and the Business Parx; the approximate size in acres of each parcel; and the current ov~mership/control of each paYCel, including the parcels currently encumbered by the King Leases. K~ sf-2634417 A-1 I I r \ -----~ 1 ' a\ I D I''4;.' I n /; _ ~ I, 1 1 ~t~ / 1 1 ~ ii ~ F~ 1 ~ _/1 / -^ ~r 71 i 1 k '~..,~ 'a s'. p 9~ 9 6 4 a i f s ~~ 0 ;' ~ ry y '~ ' ~(~ ~ 9 s € t 9 Z ~ m f~ 7~ [ a (~ a 86 r t I t a31 ~sy s O z~ I ~ a ~I~ D •~, v~C`~ n ~ \ \ 'iS, s1 to + a `.4 ~~E4i p N ~ n m ~; C ~ ~ t ~ ~ oIS O T~ `' ~ ~,i I 1 ~ J 'L' S,. wall e 5S'~I.._ _ _ ._ _ _ - _ '- _ _ ~£.. I l j ~ 7 ~ "'~ I U151ER1'01\'I tlOI,LLVA1tU _ ___ ~ ~~ II n ~ ~n ~ ,: I~, ~ ---- /~ I ra ,~"' R~1 °'~ -". „~ N ^a n I. 3;iP3 p '~ N a I .9 i ~' I r< _ '~t r,~PARCELI•J ~~ '~`'s o ~o p ~' I I I / / ~ t~ 11 ~ 3 ~ ~ , 1 N D I I '.I( I' f1] ,: ° i i4;sl~ y / ,vv` I T' I 3 d a' I~. ~f. ,,.,.. ~..... $I I 19 N ~~ »,34i{3i7'~;~iC3a ~o I ~ jll i :i °' :.. 3 I I i:' es r I I .. n-n,i.errl ~~ MA(INAr y. `~~1 i ~ I ~t~ L eye/,' ~~:1 I I 13 i r '~ a _ 9 /.' ~ I I ` A (~7 , d RG6 t ~ ~ I ~I~ CN n I d° ry` r. k~A .,: I I I, I ,;.~ I. I „ _ t i I I I~ ~` !!i ~ I I 1 u M a; i7 t ) n~ I I r ?§ o I 1 1 4 K r.tii g I I I F I. I li I, ~ t 1 '~.i l', ~, I f I I I: 9 1 I~ I i I I ~ I D ~I - '1 I i I I F A cc I ~ '.T IS rl ~iY 1~'.. 4 ~ I I ,a e. ~ r~ I IFi I .' A r. I A It Ir, I II I t^I 1;~". ! I I n x pl_ _ ; ; . I, I r- .IC; I n I af:'57:~,2?E::re::^.c-i~ ~______._`_______.____1____ ,- r ~~ m l l a 6'; p a° tt]iitri E t r r i' ~' I IA i~ ~ a~ ~I :, ~=~s,r.,t t.'=-i~ I~ ~ I I I r. i I I I. a~,..M""~+iti~l , ~ .~^ 31 kl t.,.~~~ ',i~ S' i ~ it I f 1. -l. 1¢~ i i' e I I I r 'I I; a tl iii'. ~. r I l ~"ii (' I ,~ I I ~~.G': il.ti':.:•_'' i I Z Z ~ O I ,i II I ~ ~ I al ;56~ Y 1y •C~I I I '"r O O y f~l '~ I HUN '~ ~ 71 I IBS t ~ I X00 ~ d I C' ~ S '; Il~''l~ '] i _._ I 00 ~ a I DI 1 `I ~ ~~------~-- A I I- ....::cc::: ):: iS D ~ m r II o Sii[F'~eS~`.i<~e I i n ~ o ti z I p a I I ~,~,` :it4"~~ii.zi~C ~ ~~ j1 W .4 B~ w ~ a 7 t ~7 I 1 SI 'P.'J^A^. Ai Ira` I= 1~ i \ \ 'x' b ~' { 11 wyn ~~. L/ N ~ t I a I I .m w l I O y yFBi, d,i 6P }? r`, y n 11 i ~ I I ,{ K t,~s~ ~; ~ ~, ~ °~ _ a m I II ~t;°' ~I f.~ I 1 1V ~t71 I ~ rl I~ ~ ~~ i_I-_ .. 7 I I iJ tG~tl ;67 4 r r ~` ~Ir ~` I I ~~ D O 1 I ~~~~ I I ~J a I ~ Ci ct 9 D ~, I ~. n ~~~.~~J u µ u z r I a I I m if,y a ~;II n : ~ v ' ,,.„ li I :rl ~ .e_ ~~ e r. Ip '31'~ a ~ I I' Ic 1, D Ip e I I I ._.~R.___ ~ I I I 1... _ ~ I I ' ~ r'A, ,,.,,_ ,r r I II ,... ,.....a. I ~I r ~ I IS I I al ~~o I al ~'~ yII > I~ nl ~(OI°... I IA i I m 'r, I ~ I r•I lYt :r,,, i ! I Im r . I ' n 'i ~~ ' I Ir i ,. ~ + I le I E ¢ r. I i3 IF A!a I ... I.i~.~m ~. I i D a ~~ .r„ .. , ~ ~ ~ iR ~ ~,, ja4, rp r I it a ~i ~ \ ~': Y~ ~ i I~; ~ 0 ?n\ ~ /F I v~ ~ o / r f .t ~'' D v C 'x ~ i ~ -~ ~` v 4 \+F In.3 m' II N I r~C,t y" '~. i 1 'i:w,~ ~ ~ °a '. :~ a _~ I I . ,. ~ ,., ,. o ,~ p L___________ Iv________________-__ ______~_________.____.____~___~ ^ ~'~ Il a ~{I i ~ P I l C ll l I I TT N ~ i ~; rn m 11 I ~; r i e~ Z 9 -I ~ 3i ~ ~ ~ i .~~ y ~ I 'plyg a ~ f ~~n t ~ ' ~~ I ~ ~ i ~ A a B §?? ~ i ~L~ ~4s O W 3d ~ ~0 O ~ N 3 O ~ N B~sW ~3 m ~ N ^ ~ a . ~ g D { 4 ~'~ ~ ; "N'4 m ~ _~ v ~ m ~ ° ~`. 3 999 ~~g ~ 3 2 2~ ~ ~k~ ~ ~ ~. ~~ EXHIBIT B: Estimated Project Schedule This Exhibit sets forth both Parties' reasonable estimates of Project milestones, based on each Party's good-faith, diligent pursuit of their respective responsibilities, in curnpliance with applicable law. These milestones inch.~de the items listed below, for ilh~strative purposes only. Initiate preparation of EIR aid Project Entitlements: Third quarter 2009 2. Complete environmental review and RDA and City approval of Project Entitlements: I~ first quarter. 20 i 1 3. Approval and execution of Crnlveyance Agreement to govern transfer of the King Leases and Conveyed Property: First quarter 2011 4. Projected date for exchange of interests in King Leases and Conveyed Property pursuant to Conveyance Agreement: Second quarter 2013 5. Projected date to commence construction of Phase I Infrastructure Improvements: Second quarter 2013 6. Projected establishment of a c+~mrr~unities facilities distict and issuance of Mello-Roos Bonds: Second quarter 2013 The Parties recognize that despite their respective diligent good faith efforts, the achievement of these milestones is subject to circumstances and actions of others beyond their respective reasonable control, such as actions by other governmental agencies, market conditions, financing, and other business and economic factors, and that such circumstances will be taken into account in the OPA and DA. This estimated schedule does not affect the Parties' rights or remedies under any termination provisions that may be included i_n_ an nPA and/or DA. sf-2634417 g-~ ~ ~" EXHIBIT C: Concept Plan The Concept Plan depicts the approximate extent and location of major Project elements (as currently contemplated), including the buildings comprising the Life Sciences Campus and the Ferry Village/Oyster Fcint. Marina, areas reserved for recreatioi;/open space, major landscaping improvements, commercial uses, a hotel and circulation elements (such as rood configuration). The Parties recognize that as planning and design p?-ogresses and new information arising from huiiher staff review and public input (including traffic data and information from the environmental review process) becomes available, the Parties may revise the Concept Plan, including the location of specific Froject comporerts, such as roadway configuration. In that regard, the Parties intend tha± any revisions tc the Concept Flan should take ii;to account the following: • Create a visual `sense of arrival' to the Oyster Point Marina area at the intersection of Oyster P tint Boulevard and Marina Boulevard. • Create an aesthetically pleasing, safe and efficient pedestrian and vehicle network tl.roughout the Life Science Campus and the Ferry Village/Oyster Point Marina. • Enhance access to and promote the use of the SSF Ferry Terminal and implement the transportation demand management (TDM) requirements identified in South San Francisco's Zoning Ordinance. • Design and implement publicly accessible open spaces for portions of the Life Sciences Campus and for the Ferry Village/Oyster Point Marina. • Incorporate superior urban design features, including the relationship of buildings to open space, the connection between public and private facilities, and connections for visitors to the Oyster Point Marina and open space areas. sf-2634417 C-1 m ~~ r Z rN 3 O N fD ~O a~ N r+ ~~ ~o ~, _. ~~ ~_ N ^ n l/ O O D C1 (D ~-h ~_ 6~ N O O X ~ S ~ 6 ~_ ~ ~ ~ ~. s Ext~~Bi~[' D: Pro;~ct Description The Parties intend that the elements listed below be included in the Project for purposes of providing a "project" that can be the subject of detailed environmental review, in compliance with CEQA, and for determining all other necessary Project Entitlements. 1. Infz-astr~acture ana P ~ablic Improvements. The Parties anticipate that the Prejcct will require infrastructure and public amenities such as road and intersection, improvements, water, sewer, gas, electricity, lighting, parking, trails; parks, and landscaping improvements. These Infrastructure Improvements are set forth in more detail in Exhibii ~ to the MOU. 2. Developer Project. 2.1 Life Sciences Campus. Developer wi11_ establish a mcdern life sciences campus, including substantial public amenities, across the Developer Property, which will be acquired by Developer ("Developer Project"). The Developer Project would include research and development and/or office buildings, generally as indicated on Exhibit C to the IvIOU, predicated upon a Floor Area Ratio ("FAR") calculation of 1.25, taking into account certain areas (1) reserved for public amenities, including ?ny private streets, beach, park, portion of the Eay Trail, or ether rights of way, public open space, or recreational area, and (2) available for potential futurz development, and subject to confirmation by the City of the actual square footage of the parcels comprising the Conveyed Property. Developer acknowledges that City may determine that development of-the Developer Project at an FAR of 1.2~ may require mitigation measures in addition to those imposed by City with respect to development at an FAR of 1.0. Should City approve, and Developer build, the Developer Project at an FAR of greater that 1.0, Developer agrees that it will pay the cost of such additional mitigation measures. The Developer Project would also inch~de sufficient structured parking to meet the tenants' parking needs and City's requirements. Tl~e Developer Project will provide an enhanced entrance to the heart of City's biotechnology district, and an integrated overall appearance to the Oyster Point area. 2.2 Developer Project Phasing. The Developer Project will be constructed in phases, which may be generally as set forth below, and which will be set forth in more detail in the OPA and DA. Developer intends to seek approval for a Master Plan, Planned Unit Development, or similar planning document to guide the development of the entire Developer Project. (a) Phase ID and- IID Improvements. Phases ID and IID will each consist of certain Infrastructure Improvements and building construction. The OPA will provide for Developer to fund and construct the Phase ID and IiD Improvements, and the DA will provide for Developer. to construct the Phases ID and IID Improvements in accordance with approved Precise Plans (or similar planning documents as the Parties may mutually agree upon) for each phase. (b) Phases IIID and IVD Improvements. Phases IIID and IVD will each consist of certain Infrastructure Improvements and building construction. The DA will provide for Developer to fund and construct the Phases IIID, and IVD Improvements in accordance with sf-26344'17 D-1 L f 5 approved Precise Plans (or similar planning documents as the Parties may mutually agree upon) for each phase. 3. City Project. The portion of the Marina Property to be retained by City ("City Property") generally v~~iil be planned and developed by City or its designee as allows; collectively, this portion of the Project is referred to as the "City Project." The Parties agree that Developer intends to plan, fund, and/or develop certain. portions of the City Project as set forth below. 3. i Fer!-y Village/v •sty er Point iVlarina and Related Facilities. A portion of the City Property will include the redevelopment of the Oyster Point Marina and related facilities ("Ferry Village/Oyster Point Marina") located near and oriented to the public ferr}~ terminal That is planned for future operation. at Oyster Point. The Fer!-y Village/Oyster Point Marina will be designed to sense the ferry passengers, Marina visitors, and the Life Sciences Campus tenants. Upon completion, the Ferry Village/Oyster Point Marina r,1ay provide retail and corr~mercial uses, food and beverage sales, a hotel, and other similar or related marina uses. The Parties anticipate that the Ferry Village/Oyster Foint Marina will be constructed and operated by a third party. The provisions of the OPA relating to the Ferry Village/Oyster Foint Marina are intended to allow City to provide infrastructure and financing that would facilitate continued operation and improvement of the Oyster Point 1~iarina 3.2 Open Space and Recreation. The City Project may include, and the OPA may provide for, public open/recreational space uses including, but not limited to, beach access, athletic fields, and improvements to the Bay Trail. 3.3 City Project Phasing. The City Project will be constructed in phases, ~~~hich may be generally as set forth below, and which will be set forth in more detail in the OPA. (a) Phase IC Improvements. Phase IC will consist of certain Infrastructure Improvements. The OPA will provide for Developer to construct the Phase IC Improvements, with financial commitments from RDA and Developer to fund portions of such Improvements. (b) Phase IIC Improvements. Phase IIC will consist of certain Infrastructure Improvements and development of buildings and other public amenities. The City and/or RDA, at its discretion, may undertake to construct the Phase IIC Improvements, with financial commitments from RDA and Developer to fund portions of such Improvements at the beginning of Phase IIID and Phase IVD. 4. Environmental Review. The Parties intend that at the time program-level environmental review is completed for the entire Project under CEQA, aproject-level environmental impact report will also be prepared for Phases IC and ID (collectively, "Phase I") of the Project. Subsequent project-level environmental review will be conducted in compliance with CEQA prior to construction of any later phases of the Project. 5. Compatible Uses. The Parties will ensure the compatibility of uses on the City Property with the uses of the adjacent Developer Property. This may include appropriate restrictions on proposed uses of certain portions of the City Property so as to avoid physical and design conflicts with the uses contemplated on the Developer Property. sf-2634417 l]-2 ~~ ExxIBIT E: Project Entitl_Pments The Parties anticipate that the Project will require the following entitlements, approvals, authorizations, and agreements from the City, RDA, and other regional, state, and federal entities ("Project Entitlements"), as described below. 1. Amendments io file City eyener al Flan. The Parties anticipate that it may be necessary to amend the City's i~99 General Plan as fellows: 1.1 More clearly permit research and development uses within areas designated for Coastal Commercial use. 1.2 Permit development within the Developer Property at an FAR of 1.25. 1.3 Additional, minor amendments to the Ger_eral Plan to ensure conformity between the Project and the General Plan. 2. Amendments to Oster Point Specific Plan. The Parties intend to amend, replace, or repeal the existing Oyster Point Marina Specific Plan ("Specific Plan") to facilitate development of the Project. The Specific Plan may be modified in the following ways. (references to the relevant sections of the existing Specific Plan are inchided in parentheses): 2.1 Allow off ce, research and development/laboratory, commercial, retail, eating and drinking establishments, and hotel use on the Conveyed Property and City Property (B.1), including without limitation all uses listed in Section 20.59.030 of the SSFMC. 2.2 Allow for street configuration different than that depicted on the existing Specific Plan Map (B.2). 2.3 Allow certain buildings on the Conveyed Property to exceed fifty (50) feet in height, consistent with Project requirements, the Zoning Ordinance, and FAA regulations (C.4). 2.4 Modify parking rate requirements as necessary, consistent with Project requirements and City regulations (C.5). 2.5 Modify or eliminate requirement for Precise Plan (A.S.b; G.1 - G.10). 3. Amendments to Zoning Ordinance. 3.1 Oyster Point Marina Specific Plan District_ To the extent that the Oyster Point Specific Plan is amended, pursuant to Section 2 above, it will be necessary to amend the corresponding regulations in the Zoning Ordinance for the Oyster Point Specific Plan District. 3.2 Use Regulations and Development Standards. Because the City is undergoing a comprehensive Zoning Ordinance Update, it is not known at this time whether it will be necessary to seek amendments to the use regulations or development standards applicable to the Project area, outside of the Oyster Point Specific Plan District. The Parties intend to meet and confer to consider the need for potential Zoning Ordinance amendments, and options for sf-2634417 E-1 establishing continuing specific permissible uses, as the Zoning Ordinance Update progresses and after the City enacts an updated Zoning Ordinance. Amendments to Redevelopment Flan for IDowntown/Central Project Area. 4. i Debt Limits. The RDA may seek an amendment to the Redevelopment Plan for tl~e Added Territory to the DowritowrJCentral Project Area; which applies to the Marina Property, for the pu:-pose of increasing the limitation on outstanding bonded indebtedness. 4.2 Boundaries. The RDA may also consider adjusting the boundaries of the Downtown/Central Project Area iti order to include part or all of the Business Park within the Froject Area. 5. Development A~reernent. The Parties intend to negotiate and prepare a Development Agreement ("DA") and, following completion of environmental review under CFQA, will present the D A for consideration by the City Council in accordance with the provisions of Government Code section 65864 et seg. The intent of the DA is to provide Developer a vested right to develop the Developer Property. Tentative initial terms of the DA are set forth in Exhibit G to the MOU. Tentative Subdivision/Parcel I`Jlap. 6.1 The Parties intend to obtain approval for a Tentative and Ti final Subdivision iviap/Parcel Map in order to effectuate the conveyance of the Conveyed Property and facilitate the redeveloprr~ent Project. 6.2 The Parties recognize that if the new parcels created by any Subdivision Map or Parcel Map would not meet the City's minimum subdivision standards, as set forth in Chapter 1 x.16 of the Municipal Code, then the City will require a Use Permit for those parcels based on approval of a Planned Unit Development. Master Plan or Similar; Precise Plan or Similar. 7.1 Developer intends to seek approval for a Master Plan, Planned Unit Development, or similar planning document to guide the development of the entire Developer Project. 7.2 To the extent that any future Oyster Point Specific Plan, as amended pursuant to Section 2 above, requires submittal and approval of a Precise Plan prior to construction or exterior modification of any structure, the Parties anticipate that Developer will seek approval of a Precise Plan for development of the Developer Project on the Conveyed Property. Additionally, the Parties may agree that approval of Precise Plans or similar planning documents maybe required for planning and development of specific phases of the Developer Project. 7.3 The Parties intend that the specific form of the planning documents contemplated by this Section, and the appropriate process for obtaining approval of those plans, will be set forth in the Zoning Ordinance, Specific Plan, or, as appropriate, DA. sf-2634417 E_2 L~g 8. Relegation and/or Vacation of City Streets, Rights-cf--Way, and Public Utilities. In order for developr~7ent of the Project to occur in accordance :x~ith the Cor:cept Plan, portions of certain public rights-of--way and public utilities that run through tr~e Property must be vacated by the City, and the veh icular circulation on the Property must be reconfigured. Without limiting City's discretion in its consideration of a future application for the relocation or vacation of any public rights-of--way or public utilities, the City shall accept and process in good faith any such application submitted by Developer in connection. ~v/ith the Project. 9. TJse Permit (Together with a Transportation Demand Management Program). Developer intends to seek, based on the generation of over 100 average daily vehicle trips associated with the Life Sciences Campus, a Use Permit for uses at the Life Sciences Campus. In conjunction with the Use Permit, Developer :vill_ also seek approval for a Transportation Demand Manageiuer~t Program as prolJided in Chapter 20.120 of the current Zoning Ordinance, and as those provisions may'oe amended as part of the Zcring Ordinance Update. 10. Design Review. The Parties intend to seek Design Rcview approval for development of each component of the Project, in accordance with Chapter 20.85 of the current Zoning Ordinance, and as those provisions may be amended as part of the Zoning Ordinance Update. 11. Agreements witl: Harbor District. 11.1 City/Harbor District MOU. The City and RDA intend to enter a Memorandum of Understanding with the Harbor District ("City/Harbor District MOU"). 11.2 Amendments to JPA. The City intends to seek amendments to the Joint Powers Agreement (as subsequently amended) dated November 11, 1977, between the City and Harbor District ("JPA"). The proposed amendments will eliriinate the applicability of the JPA to the Conveyed Property and the Harbor District's authority to manage, operate and maintain the Conveyed Property, and will facilitate continued operation of the Oyster Point Marina facilities (buildings, docks, slips, parking and related facilities). 12. Financing for Infrastructure. 12.1 Approval of Community Facilities District. The Parties anticipate that the City will initiate proceedings to form a community facilities district and levy a special tax on the Developer Property to provide financing for a portion. of the Infrastructure Improvements. 12.2 Approval of Redevelopment Financing. The Parties anticipate that, pursuant to an OPA, RDA will pledge a specified amount of funding for a portion of the Infrastructure Improvements. 13. Other City Approvals. The Parties understand that additional discretionary approvals may be required from the City beyond those listed above. sf-2634417 E-3 ` ` 14. Other Government/Public App: ovals. 14.1 U.S. Arnl~rps of Engineers. (a) Clean Water Act Section 404 Authorization. Authorization will be required if Project involves discharge of any dredge/fill material to the San Francisco Bay, and potentially for other construction-related activities. (b) Rivers and 'rIarbors Act Authorization. Authorization will be required if Project involves work on marina facilities and/or dredging activities. 14.2 Bay Conservation and .Development Commission. (a) Coastal Development Permit. A Coastal Development Permit will be required for development activities occurring within the 100-foot shoreline band subject to BCDC jurisdiction. (b) Amendments to Bay Plan. The Parties do not anticipate the reed to seek specific amendments to the Bay Plan; howe~~er, such amendments maybe necessary depending on specific activities that maybe proposed to occur within. the 100-foot shoreline band. 14.3 San Francisco Bay Regional Water Quality Control Board. (a) Landfill Closure Approval. Approval will be required for any new activities that may affect the integrity of the previously-closed Oyster Point Landfill, and for any new closure and post-closure maintenance activities relating to the Landfill. (b) Waste Discharge Requirements. Waste Discharge Requirements will be required to govern discharges subsequent to landfill closure activities. 14.4 Bay Area Air Quality Management District -Methane Exemption. Approval will be required to obtain an exemption from Bay Area Air Quality Management District review and permitting requirements relating to methane emissions from the closed Oyster Point landfill. 14.5 County of San Mateo -Health Services Department. (a) Landfill Post-Closure Land Use Approval. Approval will be required for any land uses within 1000 feet of the closed Oyster Point Landfill, or occurring above disposed waste. (b) Gas Monitoring and Control Program Approval. Approval will be required pursuant to landfill closure. 14.6 California Department of Public Health. Approval will be required for siting of drinking water pipelines on the Developer Property and City Property. sf-2634417 E-4 EXHIBIT F: OPA Provisions The Parties intend that any Owner Participation Agreement ("OPA") entered by the Parties to govern the development of the Project will incorporate substantially the following provisions. These provisions are not exhaustive and ;ray be expanded as the Parties reach agreements on other aspects of the Project, and as may be necessary following preparation of the environmental impact report for the Project. The Exhibits referred to in this Exhibit F will be prepared in conjunction with the Owner Participation Agreement itself. The improvements to existing facilities on the King Leases contemplated by Section 9.2(c)(ii) is included with this Exhibit F as "Oyster Point -King Leaseholds Estimate of ivlajor Capital Expenditures" dated April 24, 2009, and will be included as an Exhibit to the OPA. [Note: to the extent that certain defined terms appear in bath the body of the MOUand this Exhibit, those terms are intended to hale the same nleaiiings.J 1. Parties. The parties to the OPA shall be the edevelopment Agency of the City of South San Francisco ("RDA") and Oyster Point ventures LLC ("Developer"). RDA and Developer each may be referred to herein as a "Party," and collectively as the "Parties." 2. Redevelopment Project. The proposed redevelopment project ("Redevelopment Project") contemplated by this Agreement is the redevelopment of that certain portion of the Oyster Point Marina Specific Plan Area located within the Downtown/Central Redevelopment Project Area, conveyed in fee by City to RDA and then by RDA to Developer, and as depicted on Exhibit _ ("Conveyed Praperty"). Specifically, the P~edevelopment Project will consist of (i) the construction of certain public infrastructure improvements and amenities (the "Phase IC Improvements") set forth in Section 2.1 below; and (ii) the constriction of certain privately owned buildings and associated improvements on the Conveyed Property (tree "Phase ID Improvements") set forth in Section 2.2 below. 2.1 Phase IC Improvements. The Phase IC Improvements consist of those improvements identified as part of "Phase IC" in Exhibit J to the Memorandum of Understanding ("MOU") entered among the City of South San Francisco ("City"), RDA, and Developer, effective as of , 2009, and in Exhibit _ to this OPA. The Phase IC Improvements include: (a) Streets and utilities (including grading, subgrade, base, paving, curb and sidewalk, street lights, storm water, sanitary sewer, combined trench for gas electric, and telecom, impermeable utility trench at sanitary landfill areas, and temporary streets and utilities) in the following locations: (i) At the future street "hub" area (as identified in Exhibit ~ (ii) Extending east from the hub across the Oyster Point Marina area (b) Repair of the clay cap covering the Oyster Point Landfill on specified City-owned parcels; (c) Repaving of existing parking areas at specified City-owned parcels; sf-2634417 F-1 (d) Grading and construction of recreational fields on specified City-owned parcels; (e) Demolition and grading at the future "hotel site" on specified City-owned parcels; and (f) Landscaping of tl~e beach/park area on specified City-owned parcels. 2.2 Phase iD Improvements. The Phase ID Improvements, which are described in more detail in Exhibit , incl~ade: (a) Repair of the clay cap covering the Oyster Point Landfill on the Conveyed Property; (b) Remediation of the area identified as "Sump 1"; (c) Installation of methane control and monitoring systeir~s on the Conveyed Property; (d) Relocation. of refuse on the Conveyed Property to accom:rIodate new buildings; and (e) Development of buildings with no less than five-hundred eight thousand (508,000) square feet for research and development and/or office use. 2.3 Phase IIC Improvements. The Phase IIC Improvements consist of those improvements identified as part of "Phase IIC" in Exhibit J to the MOU, and in Exhibit _ to this OPA_. The Phase IIC Improvements include: (a) Landscaping of certain City Property within the jurisdiction of the San Francisco Bay Conservation and Development Commission ("BCDC"); (b) Landscape tune-up at non-paved, non-BCDC City Property; (c) Sewer pump station at the Marina; (d) Clay cap repair at specif ed City Property at the Marina; and (e) Repaving of existing parking areas at specified City. Property at the Marina. 2.4 Project Consistency With Redevelopment Plan. Developer has submitted to RDA a Master Plan for development of the Developer Project (as defined in the MOU), of which the Redevelopment Project is a part. As part of the OPA, RDA will make a finding that the Developer Project shown on the Master Plan is consistent with the Redevelopment Plan for the Downtown/Central Redevelopment Project ("Redevelopment Plan"). sf-2634417 F_2 3. Financing of Phase IC Improvements. 3.1 Improvement Costs. The Parties have estimated the cost of (i) the Phase IC Improver~~ents (the "Phase IC Improvement Costs"), ar~d (ii) the Phase iD Improve~~ ents (the "Phase ID Improvement Costs" and, together with the Phase IC Improve;~~ent Costs, trc "jmprovement Costs''). The amount of the Improvement Costs shall be: (i) further refined in connection with the preparation of detailed plans and specif cations for the Phase IC Improvements and the Phase ID Irrlprovements, (ii) approved by both Parties, and (iii) memorialized in the GPA based on such updated cost estimates. 3.2 Payment of Phase IC Improvemen± Costs. RDA will pay to Developer an amount equal ±o RDA's proportional contribution to the Phase IC Improvement Costs (currently estimated at approximately sixteen million six-hundred forty-one thousand dollars ($16,641,OJ0)) (the "RDA Funding Requirement"), subject to modification and further refinement to the improvement Costs and as mutually agreed upon by tl~e Parties. Notwithstanding the foregoing, Developer acknowledges and agrees that RDA will only be obligated to pledge and pay the RDA Funding Requirement in the event that Developer has undertaken or completed developrr~ent and construction of such portion of the Phase IC and/or Phase ID Improvements as set forth in the Project Schedule attached as Exhibit _. Accordingly, the payment system for the RDA Funding Requirement, including a schedule for phased payments during each phase of the Redevelopment Project, consistent with the Schedule of Performance, will be as set forth in Exhibit _. RDA and Developer shall each be responsible for funding their respective proportional shares of all Phase IC Improvement Costs not paid by the RDA Funding Requirement. Developer shall be responsible for all Phase ID Improvement Costs not paid by the RDA Funding Requirement. Any. cost savings for the Improvement Costs will be retained by the Party responsible for those Improvement Costs (or, as appropriate, by each Party in proportion to its responsibility far such Improvement Costs). The Parties intend to share data and costs related to the Phase IC Improvements as set forth in Exhibit 3.3 RDA Budget. RDA will include the RDA Funding Requirement pledge in its annual budget and will make timely application for and submit all documentation required to the allocation to RDA of the RDA Funding Requirement within the times and in the amounts required to fulfill RDA's obligations hereunder. RDA will take all actions and budget all amounts, including prepayments or additional payments if necessary, in order to fulfill and satisfy RDA's obligations under the MOU and this OPA prior to expiration of any applicable time limits with respect to RDA's a'oility to do so under the Redevelopment Plan. 3.4 Phase IIC Improvement Costs. The Parties have estimated the cost of (i) the Phase IIC Improvements (the "Phase IIC Improvement Costs"), which such amount of the Improvement Costs shall be: (i) .further refined in connection with the preparation of detailed plans and specifications, (ii) approved by both Parties, and (iii) memorialized in the OPA based on such updated cost estimates. 4. Financing of Phase IIC Improvement Costs. 4.1 Phase IIC Improvement Costs. The Parties have estimated the cost of (i) the Phase IIC Improvements (the "Phase IIC Improvement Costs"), which such amount of the sf-2634417 F-3 ~~ Improvement Costs shall be: (i) further refined in connection with the preparation of detailed plans and specifications, (ii) approved by both Parties, and (iii) memorialized in the OPA based on such updated cost estimates. 4.2 Payment of Phase IIC .improvement Costs. Develuper will pay to RDA an amount equal to Developer's contribution to the Phase IIC Improvement Costs (currently estir:~ated at approximately Ten Million Nine Hundred Thirty Thousand dollars ($1x,930,000)) (the "Developer Funding Requirement"), subject to modification and further refinement to the Phase IIC Improvement Costs and as mutually agreed upon by the Parties, in two installments as follows: (i) Five Million Dollars ($5,000,000) upon commencement of Phase IIID of the Project, and (ii) Five Million Nine Hundred Thirty Thousand dollars ($5,930,172) upon commencement of Phase IVD of the Project. Notwithstanding the foregoing, RDA acknowledges and agrees that Developer will only be obligated to pay the Developer Funding Requirement in the event that (i) Developer has completed development and construction of the Redevelopment Project and Phase IID as set forth in the Project Schedule attached as Exhibit _, and (ii) City has undertaken development of Phase IIC. Accordingly, such installment payments of the Developer Funding Requirement will be consistent with the Schedule of Performance as set forth in Exhibit _ RDA shall be responsible ~r all Phase IiC Improvement Costs not paid by the Developer Funding Requirement. 5. Development and Construction of Project. 5.1 Development Schedule and Phasing. Developer shall commence and complete construction of the Redevelopment Project and shall satisfy all otl'ier obligations of Developer under the OPA within the time periods set forth in this Section and the Schedule of Performance attached hereto as Exhibit _ and incorporated by this. reference, unless such time periods maybe extended upon mutual written consent of the City and the Developer based upon force majeure. Without limiting the foregoing, Developer shall commence construction within sixty (6G) calendar days following conveyance of the Conveyed Property to Developer, and shall diligently prosecute to completion the development and construction of the Redevelopment Project in accordance with the Schedule of Performance, unless an extension is approved by RDA. Each party shall use diligent and commercially reasonable efforts to perform the obligations to be performed by such party pursuant to this Agreement within the times periods set forth herein, and if no such time is provided, within a reasonable time, designed to permit issuance of a final Certificate of Completion. 5.2 Performance and Payment Bonds. (a) Prior to commencement.of the Redevelopment Project, Developer shall cause Developer's contractor to deliver to RDA copies of payment bond(s) and performance bond(s) or other surety instrument, acceptable to RDA in its sole discretion, issued by a reputable insurance company licensed to do business in California, each in a penal sum of not less than one-hundred percent (100%) of the scheduled cost of construction for such phase of the Redevelopment Project (the "Performance Security"). The Performance Security shall name RDA as a co-obligee. If, and to the extent, Developer is required to post a performance bond or other security in favor of the City pursuant to California Government Code sections 66499- 66499.10 to guaranty completion of the Phase IC Improvements (the "City Security"), the sf-2634417 F-4 5~ posting of such City Secwity shall satisfy the requirements of this Section 5.2 for such Phase IC Improve„~ents- (b) In lieu of the Performance Security, Developer may submit evidence satisfactory to RDA of the Developer's ability to commerce and complete the construction of the Phase ID Improvements in the form of an irrevocable letter of credit, pledge of cash deposit; certificate of deposit, or other marketable securities held by a broker or other financial institution, with signature auihcrit_y of RDA required for any withdrawal, or a completion guaranty in a form and from a guarantor acceptable to RDA. Such evidence must be submitted in approvable form in sufficient time to allow RDA to review and approve the information ;Frithin the time specified in the Schedule of Performance. (c) Upon corripletion by Developer of any distinct portion of the Redevelopment Project for which a Certificate of Completion (defined belo`a/) is issued, RDA shall release such portion of the Performance Secarity that is equal to the ratio of the cost of the completed improvements to the total Improvement Costs. 5.3 Insurance. Prior to the commencement of construction for each Phase of the Redevelopment Project, except as otherwise stated herein, on the Conveyed Property or any portion thereof, Developer shall famish or cause to be furnished to RDA appropriate certificates of the following insurance policies: (a) Workers' Compensation. During the term of the OPA, Developer shall fully comply with the terms of the laws of the State of California concerning workers' compensation. Said compliance shall include, but not be limited to, maintaining in full force and effect one or more policies of insurance insuring against any liability Developer may have for workers' compensation. Said uolicy shall also include employer's liability coverage no less than $1,000,000 per accident. (b) General Liability Insurance. Developer shall obtain at its sole cost and keep in full force and effect during the term of the OPA commercial general liability insurance in the amount of $5,000,000 per occurrence for bodily injury, personal injury, and property damage. Said insurance shall provide (1) that RDA, and its officers, agents, employees and volunteers, shall be named as additional insurreds under the policy, and (2) that the policy shall operate as primary insurance, and that (3) no other insurance effected by RDA or other named insureds will be called upon to cover a loss covered thereunder. (c) Automobile Liability Insurance. Developer shall obtain at its sole cost and keep in full force and effect during the term of the OPA automobile liability insurance in the amount of $3,000,000 per occurrence for bodily injury and property damage. Said insurance shall provide (1) that RDA, and their officers, agents, employees and volunteers, shall be named as additional insureds under the policy, and (2) that the policy shall operate as primary insurance, and that (3) no other insurance effected by RDA or other named insureds will be called upon to cover a loss covered thereunder. (d) Course of Construction Insurance. Developer shall obtain at its sole cost and keep in full force and effect during the course of construction, Course of Construction sf-263441? F-5 ~ jC insurance with pelicy limits no less than $5,000,000 without any coinsurance penalty provisions in the standard "Builders Risk'' form policy. RDA shall be named as loss payee and tree insurer shall waive all rights of subrogation against RDA. (e) Certificates of Insurance. Developer shall file with RDA, prior to co~~~mencement of construction oti the Conveyed Property or any portion thereof or prier to any access to or entry on the Conveyed Property as authorized by the ! SPA, certificates of insurance which shall provide that no cancellation, major change in coverage, expiration, or ronrene~:vai will be made during the teen of the OPA, without thirty (30) calendar days written notice to P.DA prior to the effective date of such cancellation or change in coverage (except that oniy ten (10) calendar days prior notice shall be required for cancellation due to non-payment of premiums). Developer shall deliver copies of the insurance policies upon RDA r equest. (f) tither Requirements. Developer shall also furnish or cause to be furnished to RDA evidence satisfactory to RDA that any contractor ~:~ith wr~om it has contracted for the performance of work on the Conveyed Property carries the same insura;~ce required of Developer hereinabove, and in the amounts of coverage specified, and each general contractor shall be required to obtain certification of insurance from all su'ocnntractors. ~.4 RDA Right of Access. For the purposes. of assuring compliance with the OPA, representatives of RDA shall have the reasonable right of access to the Conveyed Property without charges or fees and at normal construction hours during the period of construction for the purposes of the OPA, including, without limitation, inspection at its own expense of the work being performed in constructing the Phase IC improvements. Such representatives of RDA shall be those who are so identified in writing by the Executive Director of the RDA or his/her designee. 5.5 Equal Opportunity in Contracting Construction. During the construction of the Phase IC Improvements, Developer and all of Developer's subcontractors shall not discriminate on the basis of race, religion, sex, sexual orientation, or national origin in the hiring, firing, promoting or demoting of any person engaged in the construction work and shall require its contractors and subcontractors to refrain from discrimination on such basis. 5.6 Certificate of Completion. Promptly after substantial completion (subject to correction of p~anch list items) of all construction and development of all or any distinct portion of the Phase IC Improvements or the Phase ID Improvements capable of independent use, Developer shall provide to RDA an instrument so certifying. Upon receipt of such certificate, RDA shall confirm that such portion of the Redevelopment Project has been substantially completed, which confirmation maybe based upon inspection by the Chief Building Official and Fire Marshall of the City, and upon such confirmation shall furnish Developer with a final Certificate of Completion, substantially in the form attached hereto as Exhibit _ (the "Certificate of Completion"). The Certificate of Completion shall be,-and shall so state, conclusive determination of satisfactory completion of the construction of the applicable portion of the Phase IC Improvements and the Phase ID Improvements required by the OPA upon the Conveyed Property. Upon completion of all Phase ID Improvements and Phase ID Improvements in the Redevelopment Project, RDA shall issue a final Certificate of Completion sf-2634417 F_6 ,~~ confirming such completion. The final Certificate of Completion shall be in such form as to permit it to be recorded in the Office of the County Recorder of San Mateo County. If 1ZDA refuses or fails to furnish a Certificate of Completion after written request from Developer; RDA shall, within. ten (10) business days after receipt of such written request, provide Developer with a written stater::ent of the reasons RDA refused or failed to furnish a Certificate of Completion. The statement shall also contain RDA's opinicn of the action Developer must take to obtain a Certificate of Completion. If RDA shall have failed to provide such written statement within said 10-day period, Developer shali be deemed entitled to the Certificate of Completion. A Certificate of Completion shall not cor~stibate evidence of compliance with or satisfaction of any obligation of Developer to any 1.older of a mortgage er any insurer of a mortgage securing money loaned to finance the Redevelop, er~t Project or any part thereof. 5.7 Easements. Developer hereby agrees to execute appropriate documents providing for the recordation of previously identified easement agreements, at no cost to City or RDA, for the Phase iC Improvements to be constnacted on the Conveyed Property. 5.8 Compliance with Laws. Developer will carry out the constn:ction of the Redevelopment Project in conformity with all applicable state, local and federal laws, rules, statutes, ordinances and regulations, including without limitation, all applicable state and federal labor laws and standards, all applicable disabled and handicapped access requirements, including without limitation, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., and, as provided in the concurrently executed Development Agreement between City and Developer, City's zoning and development standards, building, Public Art ordinance, plumbing, mechanical and electrical codes, and all other. applicable provisions of the South San Francisco Mur_icipal Code (all of the foregoing, "Applicable Laws"). 5.9 RDA Disclaimer. Developer acknowledges that RDA is under no obligation, and RDA neither undertakes nor assumes any responsibility or duty, to Developer or to any third party to in any manner review, supervise, or inspect the progress of construction or the operations of the Redevelopment Project. Developer and all third parties shall rely entirely upon its or their own supervision and inspection in determining the quality and suitability of the materials and work, and the performance of architects, subcontractors, and material suppliers and all other matters relating to the construction and operation of the Redevelopment Project. Any review or inspection undertaken by RDA is solely for the purpose of determining whether Developer is properly discharging its obligations to RDA, and shall not be relied upon by Developer or any third party as a warranty or representation by RDA as to the quality of the design or construction of the Phase IC Improvements or otherwise. 5.10 Indemnity. Developer will defend, indemnify and hold harmless RDA and its elective and appointive boards, commissions, officers, agents, attorneys, consultants and employees, and all of their respective successors and assigns ("Xndemnitees") from and against any and all present and future claims, demands, suits and actions at law or in equity, and losses, liabilities, expenses, penalties, fines, orders, judgments, injunctive or other relief, and costs and damages of every kind, nature and description (including but not limited to attorneys' fees and ~7 sf-2634417 F-7 court costs; with counsel reasonably acceptable to RDA), and administrative, enforcement or judicial proceedings, whether known or unknown (collectively, "Claims"} arising from or in connec±ion with Developer's failure to comply with the Agreement and/or with all Applicable Laws relating to the construction or operation of the Redevelopment Project, including, without limitation, all applicable federal and state labor laws and standards, or in any other manner relating to development of the Redevelopment Project, or Developer's activities or performance under the OPA whether such activities or herformance are 'uy Developer of by anyone directly or indirectly employed or contracted with by Developer and whether such Claim shall accrue or be discovered before or after termination of the OPA. Developer's indemnity obligations under this Section will not extend to Claims resulting solely from Indemnitee's gross negligence or willful misconduct. This Section 5.10 shall su. give tl-ie termination of the OPA. 5.1 I Liens and Stoo Notices. TJntil the issuance by RDA of a certificate of completion for the Redevelopment Project, Developer shall not ailo~~~ to be placed on the Conveyed Property or any part thereof any lien or stop notice on account of materals supplied to or labor performed on behalf of Developer. If a claim of a lien or stop notice is given or recorded affecting the Conveyed Property, Developer shall v/ithin twenty (20) calendar days of such recording or service: (a) pay and discharge the same; or (b} effect the release tl-Hereof by recording and delivering to the party entitled thereto a surety bond in sufficient form and amount or provide other assurance reasonably satisfactory to Rl7A that the claim of lien or stop notice will be paid or discharged. 5.12 Right of RDA to Satisfy Liens on the Conveyed Property. After the conveyance of the Conveyed Property, if Developer fails to satisfy or discharge any lien or stop notice on the Conveyed Property pursuant to Section 5.11 above, or provide reasonable assurances to RDA with respect to same, RDA. shall have the right, but not the obligation, to satisfy any such liens or stop notices at Developer's expense and without further notice to Developer. In such event Developer shall be liable for and shall promptly reimburse RDA for such paid lien or stop notice. Alternatively, RDA may require Developer to immediately deposi± with RDA the amount necessary to satisfy such lien or claim pending resolution thereof RDA may use such deposit to satisfy any claim or lien that is adversely determined against Developer. Developer shall file a valid notice of cessation or notice of completion upon cessation of construction of the Redevelopment Project for a continuous period of thirty (30) calendar days or more, and shall take all other reasonable steps to forestall the assertion of claims or liens against the Conveyed Property or the Redevelopment Project improvements. RDA may (but has no obligation to) record any notices of completion or cessation of labor, or any other notice that RDA deems necessary or desirable to protect its interest in the Conveyed Property and the Redevelopment Project improvements. All rights and obligations under this Section 5.12. and under Section 5.11 hereof shall be subject and subordinate to the rights of and lender holding a lien or security interest in the Conveyed Property or portion thereof. 5.13 Subordination. Any lien created or claimed under the provisions of the OPA shall expressly be made subject and subordinate to the rights of any lender whose is used for financing the acquisition or development of the Conveyed Property. , 6. Default; Reversion. Failure or delay by either Party to perform any material term or provision of the OPA constitutes a default under the OPA. The Party who so fails or delays must sf-2634417 F_g immediately commence to cure, correct or remed}~ such failure or delay and shall complete such cure, correction or remedy with reasonable diligence. The injured Party shall give written notice of default to the party in default specifying the default complained of by the injured Party. Except as required to protec~ against further damages and except as otherwise expressly provided in the OPA, the injured Party may not institute proceedings agai~ist the party in default until thirty (30) calendar days after giving such notice (or such longer time as may reasonably be required to cure such defawt, provided the Party in dew ult is using diligent efforts to cure such default). During such thirty (30) calendar day period the Party receiving notice shall net be deemed to be in default. Failure or delay in giving such notice shall not constitute a waiver of any default or of any such rights or remedies or deprive such Party of its right to institute and maintain any actions or proceedings that it may deem necessary to protect, assert or enforce any such rights or remedies. 6.1 Event of Default of Developer. The occurrence of any of the following shall constitute a breach or default under the terms of the OPA by Developer: (a) Developer transfers or assigns or attempts to transfer or assign the OPA or any rights therein or in the Conveyed Property and/or the Improvements in violation of the OPA; (b) There is a change in tree ownership or identity of Developer or the parties in control of Developer or the degree thereof contrary to the provisions of the OPA; (c) Developer does not maintain the necessary equity capital, as set forth in the Financing Pian, and mortgage financing for acquisition and development of the Conveyed Property in satisfactory form and in the manner and by the date provided in the OPA; (d) Developer does not take title to the Conveyed Property under tender of conveyance by City pursuant to the terms of the OPA; (e) Prior to the issuance of a Certificate of Completion, a default or breach arises under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Conveyed Property or part thereof and remains uncured beyond any applicable cure period such that the holder of such security instrument has exercised or given notice of its intent to exercise the right to accelerate repayment of such loan; (f) Developer fails to commence or complete construction of the Redevelopment Project within the times set forth in the Schedule of Performance (as such may be extended pursuant to mutual agreement of the Parties), or once construction has commenced, Developer abandons or suspends construction of any Phase of the Redevelopment Project prior to completion of such Phase of construction for a period of sixty (60) days; (g) Developer fails to maintain insurance on the Conveyed Property and the Redevelopment Project as required by the OPA; (h) Following conveyance of the Conveyed Property to Developer, if Developer fails to pay taxes or assessments due on the Conveyed Property or the Redevelopment Project or fails to pay any other charge that may result in a lien on the Conveyed Property or the Redevelopment Project, and Developer fails to cure such default within thirty (30) days. sf-2634417 F-Q ~~ (i) Any representation or warranty contained in the OPA or in any financial statement, certificate or report submitted to RDA_ in connection with the OPA proves to have been incorrect in any material and adverse respect when made and continues to be materially adverse to the RDA; (j) Developer shall have assig~ied its assets for the benefit of its creditors (other than pursuant to a mortgage loan) or suffered a sequestration or attaclii.ient of or execution on any substantial part of its property, unless the property so assigned, sequester~;d, attached or executed upon shall have been returned or released within sixty (60) days after such event (unless a lesser time period is permitted for cure u;~der any other mortgage on the Conveyed Property, in which event such lesser time period shall apply under this subsection as well) or prior to a;,y sooner sale pursuant to such sequestration, attachment, or execution; (k) A court having jurisdiction shall have made or entered any decree or order (i) adjudging tree Developer to be bankrupt or insolvent, (ii) approving as properly filed a petition seeking reorganization of the Developer or seeking any arrangement for either of the Developer under the bankruptcy law or any other applicable debtor's reLef law or statute of the United States er any state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of the Developer in bankruptcy or insolvency or for any of its properties, or (iv) directing the winding up or liquidation of the Developer; (1) Developer is in breach or default with respect to any other material obligation, term, .provision, covenant or agreement contained in the OPA. Upon expiration of Developer's right to cure as provided in Section _, the OPA, and any rights of Developer or any assignee or transferee in the OPA pertaining thereto or arising therefrom with respect to RDA, may, at the option of RDA, be terminated by RDA by written notice thereof to Developer. 6.2 Event of Default of RDA. Provided that the Developer has satisfied its obligations hereunder, the following events shall constitute a breach or default by RDA: (a) City, without good cause, fails to convey the Conveyed Property to Developer within the time and in the manner set forth in the OPA and Developer is otherwise entitled by the OPA to such conveyance; or (b) RDA breaches any other material provision of the OPA and fails to cure such breach within any applicable cure period. 6.3 Cure of Default. In the event of an alleged default or breach of any terms or conditions of the OPA, the Party alleging such default or breach shall give the other Party notice in writing specifying the nature of the alleged default and the manner in which said default may be satisfactorily cured and a reasonable period of time in which to cure, that shall in no event be less than sixty (60) days, or if such default cannot reasonably be cured within sixty (60) days, a period of time that is sufficient to allow for such cure. During any such period, the Party charged shall not be considered in default for purposes of termination or institution of legal proceedings. sf-26344 i 7 F-10 6.4 Legal Actions; Specific Performance; Limitation on Dama es. Upon the occurrence of a Developer event of default and the expiration of the applicable cure period, RDA shall have the right, in addition to any other rights or remedies provided in the OPA and subject to any applicable restrictions set forth in the OPA, to institute an action at Iaw or in equity to seek specific performance of the teens of the OPA, or to cure, correct, prevent or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of the OPA; provided, however; F.DA acknowledges and agrees that the remedies set forth in Section ~.2 are RDA's sole remedies for Developer's failure to perform any or all of the Developer Obligations, as defined in Section 9.1. Upon the occurrence of an RDA event of default and the expiration of the applicable cure period, Developer shall have the right, in addition to any other rights or remedies provided in the OPA and subject to any applicable restrictions set forth in the OPA, to institute an action at law or in equity to seek specific performance of the terms of the OPA, or to cure, correct, prevent or remedy any default, consistent with the purpose of the OPA. Any such legal actions will be filed ir1 the Superior Court of San Mateo County, California. 6.5 Remedies Cumulative. The rights and remedies of the parties under the OPA shall be cumulative, and the exercise or failure to exercise one or more of such rights or remedies by either Party will not preclude the exercise by it, at the sum:, time or different times, of any right or remedy for the same default or any other default. 6.6 Acceptance of Service of Process. In the event that any legal action is commenced by the Developer against RDA, service of process on RDA will be made by personal service upon the Clerk of the RDA or in such other manner as maybe provided by law. In the event that any legal action is commenced by RDA against the Developer, service of process on the Developer will. be made by personal service upon Developer's agent for service ofprocess of the Developer at the address Listed in Section _ herein or in such other manner as may be provided by law.. 6.7 Inaction Not a Waiver of Default. No failure or delay by either Party in asserting any of its rights or remedies under the OPA shall operate as a waiver of any default or of any such right or remedy, nor deprive such Party of its right to institute and maintain any action or proceeding which it may deem necessary to protect, assert or enforce any such rights or remedies. Without limiting the generality of the foregoing, the failure or delay by either Party in providing a notice of default shall not constitute a waiver of any default. 7. Prevailing Wade. Developer and all of Developer's subcontractors shall comply with California Health and Safety Code Section 33422.1, and shall comply with California Labor Code Section 1720 et seq. and all regulations adopted pursuant thereto (collectively, "Prevailing Wage Laws"), and be responsible for carrying out the requirements of such provisions. This requirement is applicable to all development located on the Conveyed Property and/or the City Property and .any infrastructure constructed that benefits the Conveyed Property and/or the City Property that is in whole or part paid for with tax increment funds. Developer covenants to take no action which would cause RDA to violate the Prevailing Wage Laws. Developer shall, and hereby agrees to, unconditionally indemnify, reimburse, defend, protect and hold harmless Indemnitees from and against any and all Claims that directly or indirectly, in whole or in part, are caused by, arise from, or relate to, or are alleged to be caused by, arise from, or relate to, the ~1 sf-2634417 F-11 payment or requirement of payment of prevailing wages or the. req~air~ment of competitive bidding in the construction of the Redevelopment Project that is ir, whole or in part paid for with tax increment fitirds, the failure to comply with any state or federal labor laws, regulations ar standards in connection with this Agreement, including but not limited to California Labor Code Section 1720 et seq. and the Prevailing Wage Laws, or any act or omission of RDA or Developer related to this ~ ~grec:nent with respect to the payment or requirement of payment of prevailing wages or the requirement of competitive bidding, whether or not any insurance policies shall have been determined to be applicable to any such claims, demands, suits, aciions, losses, liabilities, expenses, penalties, fines, orders, judgments, injunctive or other relief, costs, damages, or administrative, enforcement. or judicial proceedings. It is further agreed that RDA dces not, and shall not, waive any rights against Developer which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by RDA, or the deposit with RDA by Developer, of any of the insurance policies described in this Agreemer.±. If applicable, as provided in California Labor Code Section l 720 et seq., the hourly and daily rate of wages to be paid each of the classes of mechanics and workers employed in connection with construction of the Redevelopment Project shall not be less than the rate of such wages the;, prevailing ire Sai, Mateo County. If Prevailing Wages applies to any portion of the Redevelopment Project, Developer agrees to and shall forfeit, as a penalty to RDA, the sums established and applicable pursuant to California Labor Code Section 1720 et seq. for each calendar day or portion thereof that each workman employed in connection with the Redevelopment Project is paid less thar, the rates designated in tl"iis paragraph for any work performed under this Agreement by Developer or any subcontractors or agents of Developer; or is not reported to the labor commissioner and RDA as required pursuant to California Labor Code Section 1720 et seq. 8. Successors and Assigns; Na Third-Party Beneficiaries. This GPA shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns. Subject to approval by RDA as to qualifications and financial capabilities of Developer's assignee, Developer may transfer or assign all or any portion of its interests, rights or obligations under this OPA to any third party or parties acquiring an interest or estate in the Redevelopment Project or any portion thereof including, without limitation, purchasers or ground lessees of lots, parcels, or facilities. 8.1 Request for Approval; Notice. For any transfer or assignment that requires RDA's approval, Developer shall notify RDA in writing of its request for consent, which notice shall include: (i) the proposed effective date of transfer or assignment (which shall not be less than thirty (30) days nor more than three-hundred sixty-five (365) days after Developer's notice; (ii) the name and address of the proposed transferee, and (iii) current, audited financial statements of the proposed transferee certified by an officer, partner, or owner thereof and any other relevant information pertaining to the proposed transferee's qualifications or financial capabilities that RDA may reasonably and timely request. 8.2 Approval. RDA may refuse to give its consent under this Section 8.2 only if, in light of the proposed transferee's development experience and financial resources, such transferee would not, in RDA's reasonable opinion, be able to perform the obligations proposed to be assumed by such assignee. In making such determination, RDA shall evaluate: (i) the ~~ sf-2634417 F-12 financial ability of the proposed ±ransferee to own and develop the Project, or portion thereof so transferred; and (ii) the fitness and experience of the proposed transferee and its senior managerial personnel to own and develop the Redevelopment Project or portion thereof so transferred. Such approval by RDA shall not be unreasonably delayed, conditioned, or withheld. Failure of City to notify Developer in writing of its consent or disapproval within forty-five (45) calendar days of ~.vritten notification by Developer to RDA of a proposed transfer shall be deemed to be an approval of the proposed transfer. 8.3 Transfer Not Requiring Approval. Notwithstanding the foregoing, Developer shall be permitted to assign this OPA without RDA consent to an entity or entities controlled by Developer (or either owner of Developer) or under common control with Developer (or either owner of Developer), provided that Developer owns and controls no less than fifty percent (Sn° o) of such successor entity. Subject to the immediately preceding sentences, this OPA is not intended to benefit, and shall not run to the benef t of or be enforceable by, any ot1-ier person or entity other than the Parties and their permitted successors and assigns. 9. Termination of OPA; Disposition of Kind Propert,,~. 9.1 Developer Obli~a±ion at Horizon Date. By the ninth anniversary of the Commencement Date of the ~~~07J ("Horizon Date"), Developer shall undertake the following actions (collectively, "Developer Obligations"): (a) Obtain CEQA and General Plan, Zoning, and Master Plan-level entitlements. for the entire Project contemplated by the MOU, which includes the City Project, the Redevelopment Project, and the remainder of the Developer Project. (b) Obtain all additional entitlements for construction of the Redevelopment Project from the City and all other regulatory agencies with jurisdiction over the Redevelopment Project; (c) Demonstrate financing for the Redevelopment Project; and (d) Provide a written, binding commitment with RDA to commence and diligently complete construction of the Redevelopment Project within four years after the Horizon Date, with the exception of any force majeure events mutually agreed upon by the Parties. 9.2 Remedies for RDA. (a) If Developer does not perform the Developer Obligations by the Horizon Date, RDA may (but shall not be obligated to) give to Developer a formal written Notice of Intent to terminate the OPA and the Conveyance Agreement, and, after giving such notice, the right to exercise the remedies set forth in subsection (c) below. (b) After RDA gives such Notice of Intent, Developer shall have one year to: 63 sf-2634417 F-13 (i) Obtain CEQA and G?_n_eral Plan, Zoning, and Master Plan-level entitlements for the entire Pre;ect contemplated by the MOU, which includes the City P roject, the Redevelopment Project, and the remainder of the Developer Project; (ii) Obtain all additio nal entitlements for construction of the Redevelopment Project from City and ail other regulatory agencies with jurisdiction over the Redevelopment Project; (iii) Demonstrate financing for the Redevelopment Project; and (iv) Provide a written, binding commitment to c;mmence and diligently complete construction of the Redevelopment Project within: three years after the rIorizon Date, with the exception of any force majeure events mutually agreed upon by the Parties. (c) If Developer has not completed the actions identified in Section 9.2(b) at the end of the one-year period following RDA's Notice of Intent, RDA may, but shal_1 not be obligated to: (i) Terminate the OPA and the Conveyance Agree:r~ent; (ii) Exercise an option to purchase for all cash the King Leases and entitlements far the Redevelopment Project at a fixed price of seven million five hundred thuusand dollars ($7,500,000) if ail improvements to the existing facilities set forth. in Exhibit _ are completed by Developer; and (iii) Decrease the purchase price for the King Leases by five hundred thousand dollars ($500,000) for each year Developer fails to complete the actions identified in Section 9.1 after the seventh (7th} anniversary of the Commencement Date, for a maximum purchase price reduction of one million five hundred thousand dollars ($1,500,000). The termination of the OPA, in part or in whole, shall not affect the rights or obligations of Developer or City under the separate Development Agreement covering the Developer Property. 10. Nondiscrimination and Nonseare~ation Clauses. 10.1 In accordance with Section 33436 of the Health and Safety Code, Developer herein covenants by and for itself, its transferees and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Conveyed Property, nor shall Developer or any person claiming under or through it, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Conveyed Property. ~~ sf-2634417 F-14 10.2 All deeds, leases and contracts contemplated by this Agreement and entered into on behalf of RDA. shall include the nondiscrimination and nonsegregation language required by Health and Safety Code Section 3343b. 11. %~evQloper's Right of First Opportunity. 1 he Parties intend to create an integrated plan ar~d design for the Project, as generally oatlined above. The Parties will further discuss and execute agreements that will address the compatibility of the City Property with the Developer Property. Tn recognition of the value of maintaining integrated planning and consistency of development for the Project, at any time City or RDA should desire to offer any parcel or parcels of the City Property to be developed for uses that would be substantially similar to the uses proposed to be developed on the Developer Property, City or RDA shall offer to, and upon indication of interest by, Developer, will enter into an exclusive negotiations agreement with Developer for the acquisition and development of such parcel or parcels. The term of the exclusive negotiations agreement shall be six (6j months, except as otherwise agreed upon by the Parties. ~, 5 sf-2634417 F-15 W }J 'a c~ U L _~ v- O «f N W 'a ^O i N Q~ Y ++ a. 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Q O o Y ~ 2 .r `- p ~ (~ ~ N ~ ~ I `° o ~ ! ~~~ ~ U N ~ C ~ ~ ~ ~ ~ d I O Q ~ C ~ I I - ;C ~ p p- O ~ ' (D ~ p I ~ ~ N C ~ ~ 'a N 07 ~o ~ o I U ~ ~ N C O Q ~ `~ ~ ~ a U I t O ~ O O ~ I a a~3L~ °' 9 ~ c m c ~ _ C ~ O ~ U O ~ ~ ~ ~~ Y p C r- -p ~ U O LL1 O v3 C U ~ c° c ~ ~-- c`'o ~ v~ x ~ O > ca v -~ .n° 3 ~ ~ co a '~ ~ ~ ~in .` N ~ j vOi _ C U ~ cLa Y ~ ~ ~ ti p ca o c ' ~ ~ U U ~ o ' ~ ~° ~ ~ a ~ ~ ~ 3~ aci i a ~U i a cg a~ a I °o °o G o v _ ~ ~ ~ r- ~ ~ ~ ~ ~ ~ ~ ~ ~ r Y ~3 c E ~ ~ c . ~ ~ u~i c ~c O m U U O C ~, ~ ~ cn C N Y U C O a~ ~ O "a N ~ ^ O U ~ N ~ N O O ''J ti 3 ;~, ~ F- ~ ? o ~ ~ U ~ ;, -` U ... ~ ~. o ~ o ~ ~ Q p ~ ' ~ ~ •.- C 3 m ~+ O ~ .Y U ~ 'D C ~ c~ ~ ~ ~ (D O O O U U m N C ~ ~ ( B ~ N ~ [/~ N O N ? ~° ~ ~ a 0 0 d U O 0 c~ O (D O O N_ ~' N 6g ExxIRIT G: DA Provisions The Parties intend that any Development Agreeiiient ("DA") entered by the Parties to goven~ the development of the Developer Project will substantially incorporate the following provisions. These provisions are not exhaustive and maybe expanded, deleted or modified as The Parties reach agreements on otrier aspects of the Developer Project, and as rr~ay be necessary following preparation of the environmental impact report for the overall Project. The Exhibits referred to in this Exhibit G will be prepared in conjunction with the Development Agreement itself. jNote: to the extent that certain defined terms appear in both the body of the MOU and t7~is Exhibit, these terrns are intended to have tl~e same meani;~gs.l 1. Parties. The parties to the DA shall be the City of South San Francisco ("City") and Oyster Point Vent~.:res LLC ("Developer"). City and Developer each may be referred to herein as a "Party," and collectively as the "Parties." 2. Term. The term of the Agreement will be twenty (20) years. 3. The Project and Project Approval Process. 3.1 The Project. The proposed project ("Developer Project") consists of development of a life sciences campus on acres of Developer's property ("Developer Property''), commonly known as the Oyster Point Business Park and including certain property within the Oyster Point Marina Specific Plan Area acquired from City pursuant to a separate conveyance agreement. The Developer Project will include construction of research and development and office buildings predicated upon a Floor Area Ratio ("FAR") calculation of 1.25, taking into account certain areas (1) reserved for public amenities, including any private streets, beach, park, portion of the Bay Trail, or other rights. of way, public open space, or recreational area, and (2) available for potential future development, and subject to confirmation by the City of the actual square footage of the parcels comprising the Conveyed Property. Developer acknowledges that City may detennine that development of Developer Project at an FAR of 125 may require mitigation measures in addition to those imposed by City with respect to development at an FAR of 1.0. Should City approve, and Developer build, the Developer Project at an FAR of greater that 1.0, Developer agrees that it will pay the cost of such additional mitigation measures. 3.2 Project Phasing. The Developer Project will be constructed in several phases, generally as follows: (a) Phase IC Improvements. The Phase IC Improvements consist of those improvements identified as part of "Phase IC" in Exhibit J to the Memorandum of Understanding ("MOU") entered among the City of South San Francisco ("City"), RDA, and Developer, effective as of , 2009. The Phase IC Improvements, which are described in more detail in Exhibit ,include: (i) Street:> and utilities (including grading, subgrade, base, paving, curb and sidewalk, street lights, storm water, sanitary sewer, combined trench for 6~ sf-2634417 G-1 gas electric, and telecom, impermeable utility trench at sanitary landfill areas, and temporary streets and utilities) ir. the following locations: area (1) At the future street "hub" area (as identified in Exhibit ~ (?) Extending east from the hub across the Oyster Point 1Vlarina (ii) Repair of the clay cap covering the Oyster Point Landfill on specified City-owned parcels; (iii) Repaving of existing parking areas at specified City-owned parcels; (is%; Grading and construction of recreational fields on specified City- o ::~ned parcels; (v) Demolition ar~d grading at the furare "hotel site" on specified City- owned parcels; and (vi) Landscaping of the beachfpark area on specified City-owned parcels. (b} chase ID Improvements. The Phase ID Improvements, which are described in mare detail in Exhibit ,include: (i) Repair of the clay cap covering the Oyster Point Landfill on the Conveyed Property; (ii) Remediation of the area identified as "Sump 1 "; (iii) Installation of methane control and monitoring systems on t11e Conveyed Property; (iv) Relocation of refuse on the Conveyed Property to accommodate new buildings; and (v) Development of buildings with a minimum of 508,000 square feet for research and development and/or office use. (c) Phases IID, IIID, and IVD Improvements. (i) Development of streets and utilities at Business Park; (ii) Construction of sewer pump station l; (iii) Landscaping within 100-foot shoreline band at Business Park; and ~~ sf-2634417 G-2 (iv) Develapment of buildings ;x'it.41 up to `; square feet for research and development and/or office use_ 3.3 Project Approvals. Frior to appro~~al of the Development Agreement, and concurrently with the certification of the EIR for the Developer Project, the City has taken cP.veral actions to review and plan for the future development of the Developer Project ("Project Approvals"). These include: a Master Plan for development of the Developer Project; [list to be added as DA is finalized in fi.-ture]. 3.4 Subsequent Approvals. Certain other land use approvals, entitlements, and permits are necessary or desirable for implementation of the Developer Project ("Subsequent Approvals"). The Subsequent Approvals may inciude, without limitation, the following: separate final development plans fcr each Phase of the Developer Project (each a "Phase Plan"), Use Permits, design review approvals,. improverrient agreements, grading permits, building permits, lot line adjustments, sewer and water connection permits, certificates of occupancy, subdivisionmaps, rezonings, development agreements; permits, res~abdivisions, and any amendments to, or repealing of, any of the foregoing. [List to be supplemented as DA is finalized in future]. All Subsequent Approvals shall be consistent with the terms of the Agreement and shall be exercised in a ;fia~~ner that supports the vested rights granted by the Agreement. 4. Developer Obligations. 4.1 City Fees. (a) Developer shall pay those processing, inspection and pian checking fees and charges required by trc City under the then current and applicable regulations for processing applications and requests for Subsequent Approvals. (b) Consistent with the terms of the Agreement, City shall have the right to impose such development fees (the "Development Fees") as have been adopted by City as of the Effective Date of this Agreement or as to which City has initiated formal studies and proposals, pursuant to City Council action. Development Fees shall be due upon issuance of building permits or certificates of occupancy for the Developer Project, as maybe appropriate, except as otherwise provided under the Agreement. 4.2 Mitigation Measures. Developer shall comply with the Mitigation Monitoring and Reporting Program ("MMRP") identified in the EIR for the Developer Project, as it may be modified from time to time in accordance with the MMRP or other law. 4.3 Additional Consideration. As consideration for its vested rights to develop the Developer Project in accordance with this Agreement and the separately executed Owner Participation Agreement between Developer and the Redevelopment Agency of the City of South San Francisco, Developer has committed to make payments to the City as follows: (a) At the time the City/RDA conveys certain property (the "Conveyed Property") from City/RDA to Developer, and upon satisfaction of all requirements pursuant to a separate Conveyance Agreement for conveyance by City/RDA and payment by Developer, 71 sf-2634417 G-3 Developer vrill make a cash payment to City/RDA of two million two hundred fifty thousand dollars ($2,250,000}. (b) At the time Developer commences construction of Phase IIID of the Developer Project, Developer will make an additional cash payment to City/RDA of two million two hundred fifty the~asand dollars ($2;250,000). 5. City Obli~atio~:s. 5.1 Protection of Ves±ed Rights. To the maximum extent permitted by law, City shall take any and al] actions as may be necessary or appropriate to ensure that the vested rights provided by the Agreement can be enjoyed by Developer and to prevent any City Law, as def ned below, from invalidating or prevailing over all or any part of the Agreement. City shall cooperate with Developer and shall undertake such actions as may be necessary to ensure the Agreement remains in fu]] force and effect. City sha]1 not support; adopt, or enaci ary City Law, or take any other action which would violate the express provisions or intent of the Agreement. ~.2 Availabili~ of Public Services. To the maximum Fxteiit permitted by ]aw and consistent with its a~athority; the City will assist Developer in obtaining capacity for sewer, water, and storm services as may be necessary to serve the Developer Project. Developer agrees that it shall pay the then-effective fees for the services provided pursuant to this Section. 5.3 Right to Rebuild. Developer may renovate or rebuild the Developer Project or any part thereof within the Term of the Agreement should it become necessary due to natura] disaster, changes in seismic requirements, or should the buildings located within the Developer Project become functionally outdated, within Developer's sole discretion, due to changes in technology. Any sucl^i renovation or rebuilding shall be subject to the square footage, height limitations and FAR vested by the Agreement, and shall comply with the Project Approvals, the building codes existing at the time of~such rebuilding or reconstruction, and the requirements of CEQA. 6. Cooperation; Implementation. 6.1 Processing Application for Subsequent Approvals. The City will not use its discretionary authority in considering any application for a Subsequent Approval to change the policy decisions reflected by the Agreement or otherwise to prevent or delay development of the Developer Project. 6.2 Timely Processing by City. Upon submission by Developer of the application for any Subsequent Approval and processing fees, City shall promptly and diligently commence and complete all steps necessary to act on the application including, without limitation, (i) providing at Developer's expense, as requested by Developer or determined to be necessary by the Chief Planner, reasonable overtime staff assistance and/or staff consultants for planning and processing of the Application; (ii) if legally required, providing notice and holding public hearings; and (iii) acting on the application. City shall ensure that adequate staff is available, and shall authorize overtime staff assistance as may be necessary, to timely process the application. City Staff also agrees to timely process any subsequent permits and approvals required to implement the Developer Project. sf-2634417 G-.4 ~~ b.3 Review of Subsequent Approvals. The City may deny an application for a Subsequent Approval only if such application dues not comply with the Agreement or Applicable Law (as def ned below}. 6.4 Uther Government Permits. The City shall cooperate with Developer in its efforts to ~~btain, as maybe required, permits alld approvals from other governmental or quasi- gove?nniental entities and sriall, from time to time at the request of Developer, use its best efforts to enter into binding agreements with. any such entity as may be necessary to ensure the timely availability of such permits and approvals. 7_ Master Plan; Phase Plans. ?. l Developer ryas submitted to City a i raster Plan for developir~ent of the Developer Project. City has determined that. the Master Plan is consistent with the South San Francisco General Plan ("General Plan"), the ~Jyster Point 1`~larina Specific Plan ("Specific Plan"). The Master Plan, including the Project Description and Scl-iedule of Performance, is incorporated into this DA as Exhibit 7.2 Developer shall sub_r_'~i.t to City, for approval by City, separate final development plans for each Phase of the Developer Project (each a "Phase Plan"). Each Phase Plan shall be consistent with the General Plan, the Specific Plan, Redevelopment Pian, the Project Description and the Schedule of Performance, and shall include all required Phase Plan application documents, including without limitation, elevations and site plans showing size and location of buildings and infrastructure, the number and location of parking spaces for any proposed buildings, and (1) the specific treatment and location of all landscaping amenities, (2) the location of all pedestrian and automobile ingress and egress points, (3) the proposed uses of the buildings and (4) the location of other public or private streets and improvements foi that portion of the Developer Property included within the specific Phase Plan. Any Phase Plan shall comply and be consistent with the requirements set forth in Section _ below. 7.3 Upon approval by the City, each Phase Plan shall be incorporated automatically into the DA as a part of Exhibit 7.4 Any subsequent material change, modification, revision or alteration of any approved Phase Plan shall be submitted for approval by the City; and if such change, modifications, revisions or alterations are not approved, the approved Phase Plan shall continue to control. Any proposed material change, modification, revision or alteration shall be approved or disapproved by the City within seventy-five (75) calendar days of submittal. If the City refuses or fails to approve or disapprove the revision, modification or alteration to the Phase Plan within said seventy-five (75) calendar day period, the City shall, within ninety (90) calendar days after receipt of such submittal, provide the Developer with a written statement of the reasons the City refused or failed to approve such submittal. If the City fails to approve or deny the amended Phase Plan and to provide the Developer with the written statement described above, the submittal shall be deemed approved. sf-2634417 ~ / G-5 8. Standards, Laws, and Re~alations Governing Project. 8.l Vested Right to Develop. Develcper shall have a vested right to develop the Developer Pruject on the Developer Property in accordance with the terms and conditions of this Agreement and the Applicable Laws. Nothing in this section shad be deemed to eli;r~inate or diminish the requirement of Teveloper to obtain any required Subseq~aent Approvals. 82 Permitted Uses Vested by This Agreement. Tile permitted uses of the Developer Property; the density and intensity o_f use of the Developer Property; the maximum height, bulk and size of proposed buildings; provisions for reservation or dedication of land for public purposes and the location of public improvements; the general location of public utilities; and other terms and conditions of development applicable to the Developer Project, shall be as set forth in the Project Approvals and; as and when they are issued (beat not in limitation of any right to develop as set forth in the Project Approvals), the-Subsequent Approvals. Permitted uses shall include, without limitation, research and development, office, employee-serving amenities such as personal service establishments, eating and drinking establishments, childcare, and physical tness facilities. 8.3 A~licable Law. The rules, regulations, official policies, standards and 4 ~~ r ~ all be those set specifications applicable to the Developer Projec~ (the Applicable ~..a`:") sh~ forth in this Agreement and the Project Appro~~als, and, with respect to matters not addressed'oy this Agreement or the Project. Approvals, those rules, regulations, official policies, standards and specifications (including the General Plan and City ordinances and resolutions) governing permitted uses, building locations, timing of construction, densities, design, and heights, fees, assessments, exactions, and taxes in force and effect on the Effective Date of this Agreement, or as specified in Exhibit - (a) The Parties understand and agree that as of the Effective Date the fees, taxes, exactions, and assessments listed in Exhibit _ are the only City fees, taxes, exactions, and assessments. Except for those proposed fees, exactions or assessments set forth in Exhibit _, City is unaware of any pending efforts to initiate, or consider applications for new or increased fees, taxes, exactions, or assessments covering the Developer Property, or any portion thereof, except for those pending efforts described on Exhibit _. This shall not prohibit City from imposing on Developer any fee or obligation that is imposed by a regional agency m accordance with state or federal obligations and required to be implemented by City. 8.4 No Public Procurement Process. Nothing in this Agreement, including any related agreements for financing of infrastructure or public amenities, shall require Developer to follow any statutory provisions, regulations, rules, or procedures applicable to City and/or RDA with respect to bidding for public procurement or contracting; nor shall City attempt to impose any such requirement on Developer or its tenants by way of ordinance or condition of approval. 8.5 Uniform Codes. City may apply to the Developer Property, at any time during the Term, then current Uniform Building Code and other uniform construction codes, and City's then current design and construction standards for road and storm drain facilities, provided any such uniform code or standard has been adopted and uniformly applied by City on a citywide ~~ sf-2634417 G-6 basis and provided that no such code or standard is adopted for the purpose of preventing or otherwise limiting construction of all or any part of the Developer Project. 8.6 Life of Development Approvals. The term of any approval, permit, or other land use entitlement approved as (i) a Project Approval, and in effect as of the effective date of the Agreement, or (ii) subsequent Approval, shat] automatically be extended for the longer of the duration of the Agreement (including any extensions) or the term otherwise applicable to such Project Approval or Subsequent Approval if the Agreement is no longer in effect. Changes in Law. 9.1 No Conflicting Enactments. City shall not impose on the Developer Project (whether by action of the City Council or by initiative, referendum or other means) ar~y ordinance, resolution, rule, regulation, standard, directive, condition or other measure (each individually, a "Ciiy Law") That is in conflict with applicable law or this Agreement or that reduces the development rights or assurances provided by this Agreement. Without limiting the generality of the foregoing, any City Law shall be deemed to conflict with applicable law or this Agreement or reduce the development rights provided hereby if it would accomplish ar~y of the following results, either by specific reference to the Developer Project or as part of a general enactment which applies to Qr affects the Developer Project: (a) Change any land use designation or permitted use of the Developer Property; (b) Limit or control the availability of public utilities, services or facilities or any privileges or rights to public utilities, services, or facilities (for example, water rights, water connections or sewage capacity rights, sewer connections, etc.) for the Developer Project; (c) Limit or control the location of buildings, structures, grading, or other improvements of the Developer Project in a manner that is inconsistent with or more restrictive. than the limitations included in the Project Approvals (as and when they are issued); (d) Limit or control the rate, timing, phasing or sequencing of the Developer Project as set forth in the Project Approvals; (e) Apply to the Developer Project any City Law otherwise allowed by this Agreement that is not uniformly applied on a City-wide basis to all substantially similar types of development projects and project sites; (f) Result in Developer having to substantially delay construction of the Developer Project or require the issuance of additional permits or approvals by the City other than those required by Applicable Law; (g) Limit the processing or procuring of applications and approvals of Project Approvals; (h) Establish, enact, increase, or impose against the Developer Project or Developer Property any fees, taxes (including without limitation general, special, and excise ~S sf-2634417 G_] taxes), assessme;~ts, liens or other monetary obligations other than those specifically permitted by this Agreement and referred in Exixibit _ or other connection fees required by third party utilities; or (i) Substantially increase the cost of constn~cting or developing the Developer Project or any }:,ortion therf;of. 9.2 initiatives and Referenda. (a) if any City Law is enacted or imposed by initiative or referendum, or by the City Council directly or indirectly in connection with any proposed initiative or referendum, which City Law would conflict with Applicable Law or this Agreement or reduce the development rights provided by this Agreement, such Law shall not apply to the Developer Project. (b) Without limiti;~g the generality of ar~y of the foregoing, no moratorium or other limitation (whether relating to the rate, timing, phasing or sequencing of development) affecting subdivision maps, 'ouilding permits or ot_h_er entitlerrients to use that are approved or to be approved, issued or granted within the City, or portions of the City, shall apply to the Developer Project. (c) To the maximum extent permitted by law, City shal_1 prevent any City Law from invalidating or prevailing over all or any part of this Agreement, and City shall cooperate with Developer and shall undertake such actions as may be necessary to ensure this Agreement remains in full force and effect. (d) Developer reserves the right to challenge in court any City Law that would conflict with Applicable Law or this Agreement or reduce the development rights provided by this Agreement. 9.3 State and Federal Law. As provided in California Government Code ~ 65$69.5, the Agreement shall not preclude the application to the Developer Project of changes in laws, regulations, plans or policies, to the extent that such changes are specifically mandated and required by changes in state or federal laws or regulations. 10. Amendment of Agreement. This Agreement may be amended from time to time, in whole or in part, by mutual written consent of the parties hereto or their successors in interest, as follows: 10.1 Administrative Agreement Amendments. Any amendment to this Agreement which does not substantially affect (i) the Term of this Agreement, (ii) permitted uses of the Developer Property, (iii) provisions for the reservation or dedication of land, (iv) conditions, terms, restrictions or requirements for subsequent discretionary actions, (v) the density or intensity of use of the Developer Property or the maximum height or size of proposed buildings or (vi) monetary contributions by Developer, shall not, except to the extent otherwise required by law, require notice or public hearing before the parties may execute an amendment hereto. Such amendment may be approved by City resolution. ~Y sf-2634417 G-~ i0.2 P>mendment Exemptions. No Subsequent Approval, or amendti~?nt of a Project Approval or Subsequent Approval, shall require an amendment to this Agreement. instead, any such matter automatically shall he deemed to be incorporated into the Developer Project and vested under this Agreement. I i . Assignment and Transfer. Developer may transfer or assign all or any portion of its interests, rights or obligations under the Agreement, the Project Approvals, or Subsequent Approvals to third parties acquiring an interest or estate in the Developer Project or any portion thereof including, without limitation, purchasers or lessees of lots, parcels or facilities. An Assignment and Assumption of Rights and Obligations form is attached as Exhibit _ 12. Cooperation in the Event of Leal Challenge. 12.1 Cooperation. In the event of any administrative, legal, er equitable action or other proceeding instituted by ary person not a party to the Agreement challenging the validity of any provision of the Agreement or any Project Approval or Subsequent Approval, the parties shall cooperate in defending such action or proceeding. City shall promptly notify Developer of any such action against City and/or RDA. If City fails promptly to notify Developer of any legal action against City or if City fails to cooperate in tree defense, Developer shall not thereafter be responsible for City's defense. The Parties shall use best efforts to select mutually agreeable legal counsel to defend such action, and Developer shall pay compensation for such legal counsel (including City Attorney time and. overhead for the defense of such action), but shall exclude other City staff overhead costs and normal day-to-day business expenses incurred by City. Developer's obligation to pay for legal counsel shall not extend to fees incurred on appeal unless otherwise authorized by Developer. In the event City and Developer are unable to select mutually agreeable legal counsel to defend such action or proceeding, each party may select its own legal counsel and Developer shall pay its and City's legal fees and costs. 12.2 Cure; Reapproval. If, as a result of any administrative, legal, or equitable action or oti7er proceeding, all or any portion of the Agreement or the Project Approvals or Subsequent Approvals are set aside or otherwise made ineffective by any judgment in such action or proceeding (based on procedural, substantive 'or other deficiencies, hereinafter "Deficiencies"), the parties agree to use their respective best efforts to sustain and reenact or readopt the Agreement, and/or the Project Approvals, that the Deficiencies related to, unless the Parties mutually agree in writing to act otherwise. 13. Default; Remedies; Termination; Other Procedures. 13.1 Defaults. Any failure by either party to perform any term or provision of the Agreement, which failure continues uncured for a period of thirty (30} days following written notice of such failure from the other :party (unless such period is extended by mutual written consent), shall constitute a default under the Agreement. Any notice given shall specify the nature of the alleged failure and, whE;re appropriate, the manner in which said failure satisfactorily may be cured_ If the nature of the alleged failure is such that it cannot reasonably be cured within such 30-day period, then the commencement of the cure within such time period, and the diligent prosecution to completion of the cure thereafter, shall be deemed to be a cure within such 30-day period. Upon thf; occurrence of a default under the Agreement, the non- 77 sf-2634417 G-g defaulting party may instigate legal proceedings to enforce the terms of the Agreement or, ir, the evert of a material default, terminate the Agreement. If the default is cured, then no default shall exist and the noticing party shall take r~o further action. 13.2 Termination. If City elects to consider terminating the Agreement due to a materia'.- default of Developer, then City shall give a notice of intent to terminate the Agreement and the riatter shall be scheduled for con sideration and revie ~~~ by the City Council at a duly noticed and conducted public hearing. Developer shall have the right to offer written and oral_ evidence prior to or at the time of said public hearings. If the City Council determines that a material default has occurred and is continuing, and elects to terminate the Agreement, City shall give written notice of termination of the Agreement to Developer by certified mail and the Agreeme~~t shall thereby be terminated sixty (601 days thereafter; provided, however, that if Developer files an action to cl-ialienge City's termination of the Agreement within such sixty-day period, then the Agreement shall remain in full force and effect until a trial court has affirmed City's termination of the Agreement and all appeals have been exhausted (or the time for requesting any and all appellate review has expired); provided, however, that the time period during which the Agreement shall remain in effect shall not exceed three (3) years. _. 13.3 Periodic Review. (a) Throughout the Term of the Agreement, at least once every twelve (12) months following the execution of the Agreement, City shall review the extent of good-faith compliance by Developer with the terms of the Agreement. (b) If City fails, during any calendar year, to either (i) conduct the Periodic Review, ~r (ii) notify Developer in writing of City's determination, pursuant to a Periodic Review, as to Developer's compliance with the terms of the Agreement and such failure remains uncured as of December 31 of any year during the term of the Agreement, such failure shall be conclusively deemed an approval by City of Developer's compliance with the terns of the Agreement. 13.4 Enforced Delay Extension of Time of Performance. In addition to specific provisions of the Agreement, neither party shall be deemed to be in default where delays in performance or failures to perform are due to, and a necessary outcome of, war, insurrection, strikes or other labor disturbances, walk-outs, riots, floods, earthquakes, f res, casualties, acts of God, restrictions imposed or mandated by other governmental entities (including new or supplemental environmental regulations), enactment of conflicting state or federal laws or regulations, judicial decisions, or similar basis for excused performance which is not within the reasonable control of the party to be excused. Litigation attacking the validity of the Agreement or any of the Project Approvals, or any of the Subsequent Approvals, or any permit, ordinance, entitlement or other action of a governmental agency other than City necessary for the development of the Developer Project pursuant to the Agreement shall be deemed to create an excusable delay as to Developer. Upon the request of either party hereto, an extension of time for the performance of any obligation whose performance has been so prevented or delayed will be memorialized in writing. The term of any such extension shall be equal to the period of the excusable delay, or longer, as may be mutually agreed upon. ~~ sf-2634417 G-10 EXHIBIT H: Future Parcel NIa This Exhibit depicts the approxi~~.ate boundaries of the fixture legal parcels the Parties anticipate creating in order to effectuate conveyance of the Conveyed Property, and development of the Developer Property and City Property. sf-2634417 H-1 EXHIBIT I: Property Conveyances 1. Property Conveyances. The Parties intend to exchange property interests on portions of the Marina Property through one or more agreement(s) ("Conveyance Agreement"). The Conveyance Agreement will be based generally on the terms set forth below. i.l Developer Conveyed Interests. For the purposes of this L~xhibit, "Developer Conveyed Interests" refers to those portions of the Property currently encumbered by the King Leases, which Leases Developer intends to acquire, and in which Developer intends to convey its interest to the City pursuant to a Conveyance Agreement_ The location of each parcel identified below is depicted in Exhibit A to the MOU (Existing Parcel Mapl. i Existin Parcel Acres ~ (i) Parccl A 6.28 (ii) Parcel B [King j 1.90 - (iii) Parcel C 1.04 (iv) Parcel D-1 I.18 (v) Parcel D-2 2.81 (vi) Yarcel_ E 3.81 (v) ~ Parcel E-1 1.96 (vi) Parcel E-2 2.12 (vii) Parcel E-3 0.09 (viii) Parcel E-4 0.00 (ix) Parcell-1 3.80 (x) Parcell-2 0.49 (xi) Parcell-3 0.38 (xii) Parcell-4 0.86 (xiii) Parcell-5 1.81 (xiv) Parcell-6 4.79 (xv) ParcelI-7 2.93 TOTAL 36.14 1.2 Convey d Property "Conveyed Property" refers to those portions of the Property which Developer intends to acquire in fee from City pursuant to a Conveyance Agreement. The location of each parcel identified below is depicted in Exhibit H (Future Parcel Map). Future Parcel Acres (i) Parcell 9.99 (ii) Parcell 4.29 TOTAL 14.28 1.3 Devel moment Rights. Through the exchange of the Developer Conveyed Interests and the Conveyed Property, the Parties intend for Developer to obtain the right to acquire the entitlement to develop up to a floor area ratio of 1.25 on the Life Sciences Campus. The Parties gv sf-2034417 further intend that the calculation of land area ;ur purposes of floor area ratio will include certain areas reserved for public amenities, including any streets, beach, park, portion of the Lay Trail, or other rights of way, p~abiic open space, or recreational area. 2. Due Diligence 2.1 Feasibility Studies. During the period co~~~~-ner~cing upon the Effective Date and terr~ina±ing (_~ d?ys thereafter ("Due Diligence Period"), Developer and City may undertake additional inspection, .review and testing of the Conveyed Property and the King Lease property, respectively, including without limitation (i) review of file physical condition of such property, including inspection and examination. of mils, environmental factors, and archeological information relating to the property; (ii) ~rther review and investigation of the effect of any zoning, maps, peririts, reports, engineering data, regulations, ot-dinances, and laws affecting the property, (iii) further ev%tluation of the property to determine its feasibility for such Party's intended use and (iv) further review and investigation of any potential relocation costs pursuant to Section ?260 et seq. of the California Government Code. All of the foregoing are hereinafter collectively referred to as "Feasibility Studies." The Parties may consult with or retain civil engineers, contractors, soils and geologic engineers, architects ar~d other specialists in its investigation., and may consult with or retain other consultants to determine if the property is suitable for each Party's intended use. 2.2 Contracts, Reports and Investigations. Developer and City each agree to make available within fifteen (15,1 >,usiness days following the Effective Date of the MOU, any and alI additional inforrr~ation (beyond that which each party has already provided to the other party), studies, reports, investigations, contracts, leases, rental agreements and other obligations concerning or relating to the property such Party has agreed to convey pursuant to the MOU which are in such Party's possession or which are reasonably available to such Party, including without limitation surveys, studies, reports and investigations concerning the property's physical, environmental, or geological condition, habitability, or the presence or absence of Hazardous Materials in, on or under the property and its compliance with all applicable state and federal environmental laws. 2.3 Right of Entry. During the Due Diligence Period, each Party grants to the other and to such other Party's agents and employees the right, upon reasonable notice, to enter upon the property such Party shall acquire pursuant to the MOU for the purpose of inspecting, examining, surveying and reviewing such property in accordance with the MOU. Each Party shall obtain the other Party's advaneE; consent in writing to any proposed physical testing of the property, which consent shall not be unreasonably conditioned, withheld or delayed. Each Party shall also obtain any necessary approvals from the Harbor District. Physical tests shall be scheduled during normal business hours unless otherwise approved by the owner of the property to be tested. Each Party agrees to indemnify the other Party and to hold such other Party harmless from and against all liability, loss, cost, damage and expense (including, without limitation, reasonable attorneys' fees and costs of litigation) resulting from such Party's activities pursuant to this Section except to the extent that such liability, loss, cost, damage and expense arises as a result of the negligence or other wrongful conduct of the indemnified Party or the indemnified Party's agents or employees. This Section shall survive the expiration or termination of the MOU and the Close of Escrow. SI sf-2634417 ~-2 3. Es: row; Close of Escrow= Upon notice that all Parties are prepared to consu~rmate the conveyance of property interests pursuant to the Conveyance Agreement, the Parties shall open an escrow to at the office of Title Company located at ("Title Company" or "Escrow Agent'') or such other title company as may be mutually agreed upon by the Parties. Upon the opening of escrow, the Parties shall deposit witri the Escrow Agent ar, executed copy of tree Conveyance Agrec:nent, which collectively shall serve as the joint escrow instructions of City and Developer for this transaction, together vrith such additional instructions as may be executed by the Parties and delivered to the Escrova Agent. 3,1 Close of Escrow; Closing Costs. Each Party shall pay the cost of ar~y title insurance such Party elects to purchase witl: respect to the property or interest to b~ acquired by such Party pursuant to the Conveyance Agreement. Developer shah pay all other closing costs and escrow fees (including ~*~ithout limitation recording fees, escrow charges, real estate transfer taxes, and documentary transfer taxes) associated with the close of escrow (the "Close of Escrow") for the conveyance of the Developer Conveyed Interests to City and conveyance of the Conveyed Property to Developer. 32 Condition of Title. At the Close of Escrow, Developer shall convey to City the Developer Conveyed Interests free anti clear of all recorded liens, encumbrances, assessments, leases and taxes except as are consistent with the Conveyance Agreement, and City shall convey to Developer fee simple title to the Conveyed Property free and clear of ail recorded liens, encumbrances, assessments, leases and taxes except as are consistent with the Conveyance Agreement; provided, however, that the property to be exchanged shall remain subject to easements of record. g~ sf-2634417 I-3 Exx?BIi ~: Infrastructure Development and Financi~i This Exhibit iderftifies the public ir~frastP~cture improvements contemplated by the Parties as necessary for the Projec~ ("Infrastructure Improvements"); the allocation of responsibility for infrastructure Improvement development and costs; ti:e timing of development of specific Infrastructure h ~provemer.~ts in relation to one anotr~er and to Proj:,ct construction; and financing sources. Although the :rarties recognize that the need for and costs of speci is improvements may change as a _result of the environmental review process or for other reasons beyond the Parties' reasonable control, this Exhibit reflects the Parties' good-faith understanding, developed through peer review, of the necessary Infrastn~cture Improvements, their anticipated costs, and the availai51lity of public financing sources to fiand these costs. 1. Infrastructure .Improvements. The Infrastructure Improvements are those identified on the attached Sources and Uses chart (J-3), ar~d depicted on the Site and Improvement Costs diagram (J-4). 2. Improvement Costs. The Parties agree that the direct, indirect, and total costs listed under "Uses" on the attached Sources and Uses chart reflect the Parties' best good-faith estimates of the costs of specific Infrastructure Irr~provements (collectively, the "Improvement Costs"). 3. Funding Sources. The Parties intend that the funding sources for the Impr~..-vement Costs will be generally as listed and i~llocated under the "Sources" on the attached Sources and Uses chart. These funding sources fall in±o the following categories: 3.1 S/SKS Sources. (a) Out-of-Pocket. Developer will privately provide the Out-of-Pocket funds. Tl~e Out-of-Pocket funds include cash consideration Developer intends to provide to the City in conjunction with (i) the exchange of property interests pursuant to a Conveyance Agreement, and (ii) Developer's initiation of construction of Phase IID. (b) Mello-Roos/CFD. The Parties intend that, pursuant to the terms of the MOU, the City may form one or more community facilities districts ("CFD") and levy a special tax on the Developer Property in order to provide the Mello-Roos/CFD funds. 3.2 City/RDA Sources. (a) Phase I TIF. The Parties intend that, pursuant to the terms of the MOU and an OPA to be entered between Developer and RDA, RDA will provide funding to Developer for a portion of the Phase IC Improvement Costs (the "RDA Funding Requirement"). (b) Phase II TIF/TOT. The Parties intend that, if City or RDA in its discretion undertakes to construct the Phase IIC Improvements, then (i) RDA will provide funding for a portion of these Improvements, and (ii) additional funding will be provided by the generation of additional Transient Occupancy Tax. from the construction of a hotel on the City Property. g3 sf-2634417 ~-1 (c) City Out-of-Pocl~:et. The Parties do not intend that City will be required ±o fund any Improvement Costs through sources other tha~i those identified above. 4. Allocation of LRes~onsibility; Cost Overruns and Savings. With the exception of the Improvement Costs associated with streets and utilities at the "~;ub," particular Improvement Costs are allocated in their entirety to either Developer or City/RDA; however, the Parties intend to share, ors a proportional basis, responsibility for fianding the Improvement Costs associated with streets and utilities at the hub, as indicated on the Sources and Uses chart. The Party that is allocated responsibility for payment of a particular Improvement Cost shall pay the entire cost of developing such Improvement, and therefore shall pay for any cost overruns above, and shall be entitled to retain any cost savings below, the estimated costs of such Infrastructure Improvements (or, with respect to the Improvements at the hub, such Party's proportion of responsibility to fund such Improvement). ~~ sf-2634417 .1-2 n S d N N N u 07 ro N J O I q q ~ O A i m2 W /~ W `~ Y i -i t7 Q ~ -i n (n V ,D. w T C 7 O ~ N 7 L d ~ 0 N d ~~ N A fA A ~' % N '0 ~ m o v, 0 ~ ~ ~, x m !1 N ~~ N ~ p D ~ ~ V 7 N < N 7 N x >r 0 N 0 N ~ ~ ~ d N A M (fl FA dl EA 69 b W J 0 j+ 0 A A + N (D Ut A W O ~ b j !D W 7 7 O 7 O N J O + 7 7 t0 0 N o + A A O~ m N N wu, q fA fA 4A b4 fA (fl q W J OD N -~ ~7 A A + N O N C Qt 0 0 .+ ~ A b N W O t0 W 7 7 0 0 0 Ut J -+ O -+ 7 0 c0 7 7 0 A 7 W~ A W M fR fR 1R b N I 0 L d n C K A A ~ D D '9 7 D d 7 N ll ~ n = A Hr ~ N n O I J 01 I L VI ~ N 7 j ~i C a fl M ~ J J q N n ~ n A n rn fR 1 AI W 1 wl rol J 7 N l(~IAA T ~ m ~ D 7 ~ .~ -i ~ ~ DpTT1 n p ~ 7 J i ~ d d D ~ ~ ll ~ N (0 7 0 C1 Q ~ F = 7 ~ o p 0 .O. 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Ada 3'2~ ~ ~ i'`7 p, *~ o m ~ ~,~, ~; ~ ~o m, c „ v ;~ c ~ ~~ ^ ~~ ~~T`.~. Y/ ~N~ItO o ~ aQ+ W, ~a+~ ae m ~I B _a (y~' a ~ ~ ~,. i ' ~ ~+:N n ~~ < " ~~~ ~" ~' ~ ~ ~. ~ 0 p1 .a~ N 4~ 7 ~, a N m^- A y41. .- : A yf±7 A VfAGOF?A~ Q? t ,~lwJ 1J ~~p t~1 W AAA ~N^W~Q1 t~+ld+ ~b-^'tn iA~ b-~4n^ to .~ A ~ Ty ~ ..f J (fl _~ a~ > +i o ^,~, A i~~ m SwwF, ~ , } ~ (n ,Cpl Q W ~ A ~~~ppC~ O"fir t7~ tp ~ 00 W ~ • t0 "+ ov'o~oo 7 ~ ~ ^~ 7 ~~~c<< o _ A 41 ~yA±NN 'J , UI VI m m ~•w ~ , '~~~~ A ~ p ~,G7!~3~~ tNA,p'f0 N Nf iN bi ~l1-' FA N ~~ J .~ J ~? w.,+~o ~~'~ ~tn'tA u+ J ~I 9- -~ ~+ W 'J ~W~eeO~oI ~ ~~Q!~'~ rt 0 <Q 3 a ,a ~D r+ 0 N a R rt ~. c N ~o m EXHIBIT K: Existing Enviro;~rrental Co3iditions The following documents, anti the references cited therein, identify the laiown existing environmental conditions at Oyster Point 1l~arina Village. These documents are on file with Deveioper. The Parties acknowledge that this Exhibit may be modified as the City reviews these documents. Documents Commissioned by Developer. 1.1 Treadweli and Rollo, Environmental and Geotechnical Consultants. "Draft Sump 1 Investigation, Former Oyster Poirt Landfill, South San Francisco, CA." April 9, 2009. 1.2 Treadweli and Rollo, Environmental and Geotechnical Consultants. "Sump 1 and 2: Cost Estimates for Development-related Remediation, Oyster Point Landf 11/Oyster Point Business Park, South San Francisco, CA." March 20, 2009. 1.3 TreadwelL_and Rollo, Environmental and Geotechnical Consultants. "Geotechnical Investigation of the Landfiil Cover, Oyster Point Landf li, South San Francisco, CA" ~/larch 13, 2009. 1.4 Treadweli and Rollo, Environmental and Geotechnical Consultants. "Vdork Plan fc.r Investigation and Delineation of Sump 1, Oyster Point Landfilli0yster Point Business Park; South San Francisco, CA." February 25, 2009. 1.5 Toin Graf, Grafton. Letter to with confirmation from Vic Pal, Regional Water Quality Control Board and Greg Schirle, Environmental Health, LEA Section, San Mateo County: "Results of Meeting to Discuss Regulatory Requirements ShorensteirJSI~S Oyster Point Landfill Development, South San Francisco, CA." February 9, 2009. 1.6 Treadweli and Rollo, Environmental and Geotechnical Consultants. "Peer Review of Waste Discharge Requirements Monitoring, Oyster Point Landfill/Oyster Point Business Park, South San Francisco, CA." February 3, 2009. 1.7 Treadweli and Rollo, Environmental and Geotechnical Consultants. "Methane Mitigation Systems: Description and Unit Costs, Oyster Point Landfill/Oyster Point Business Park, South San Francisco, CA." January 29, 2009. 1.8 Treadweli and Rollo, Environmental and Geotechnical Consultants. "BAAQMD Permit Exemption for Landfill and Building Methane Mitigation Systems, Oyster Point Landfill/Oyster Point Business Park, South San Francisco, CA." January 29, 2009. 1.9 Treadweli and Rollo, :Environmental and Geotechnical Consultants. "Preliminary Foundation Design Criteria, Oyster Point Development, South San Francisco; CA." January 16, 2009. 1.10 McCampbell Analytical, Inc. Work Order Nos. 0812760 and 0812696, Sample Analysis and QC Report, Oyster Point. January 5, 2009. sf-2634417 K-1 1.11 MACTEC Engineering and Consulting, Inc. "Phase I Environmental Site Assessment, Oyster Point King/SKS and City Parcels, Oyster Point and Marina Boulevards, South San Francisco, CA." September 26, 2008. 2. Other Documents. 2.1 Terra Engineers, Irc. with PES Environmentai, Inc. "2008 Semi-Annual Mor~itorng Report, Former Oyster Paint Landfill, South San Francisco; CA." 3uly 22, 2008. 2.2 Terra Engineers, Inc. with PES Environmental, Inc. "Annual Report 2007, Former Oyster Point Landfill, South San Fra~lcisco, CA." January 28, 2008. 2.3 Kleinfelder West, Inc. "Feasibility Study and Cost Estimate, Proposed Oyster Point Marina Redevelopment, South San Francisco, CA." Nove~-nber 12, 2007. 2.4 Gabewell, Inc. with Harding Lawson Associates. "Fi11a1 Closure and Post-Closure Maintenance Plan, Oyster Point Landfill, South San Francisco, CA." September 2000. 2.S P~egioral Water Quality Control Board. "Order No. 00-046 Updated WDP~ and Rescissio_n_ of Order No. 7/-19." June 21, 2000. 2.6 CH21Viriill, "Soil Sampling and Analysis Plan for Characterizing and Disposing of Excavated Soil at the Gull Drive Excavation, South San Francisco," July 23-24, 1996. 2.7 CH2MHi11, "Construction Quality Assurance Report, City of South San Francisco Landfill, Gull Drive Final Cover Extension, South San Francisco, CA," October 1996. 2.8 CH2MHi11, "Project Plans for Construction of City of South San Francisco Landfill, Gull Drive Final Cover Extension," April 1996. 2.9 Levine-Fricke, "Figure 4: Sump Locations" [loose page], undated. 2.10 CH2MHi11, "Work Plan for the Gull Drive Field investigation, South San Francisco, CA," January 1996. 2.11 ICF Technology, "CERCLA Site Inspection, Oyster Point Marina, Oyster Point Boulevard, South San Francisco, CA 94080, San Mateo County," August 12, 1987 - sf-2634417 K-2 EXHIBIT L: Fees, Taxes, Exactions, T~edication Obligations, and Assessments The following list of existing and potential future fees, exactions, taxes, and assessments (collectively, "Assessments") represents, to the best of the City's knowledge as o_f the Effective Date of the MOU, those Assessments that the City currently imposes, or nay impose in the future. From time to time, trio City may update, rev.se, or change its Assessments. The Parties agree that such updates, revisions, and changes shall riot prevent the City from assessing the updated, revised, or changed Assessment against the Marina Property or Business nark, as of the effective date of the Development Agreement. Further, this list is intended for disclosure purposes only, and shah not in any :vay limit the types or a::.~.ants of Assessments that may be lawfully imposed upon development or use of the Manna Property or Easiness Park, or which may otherwise be included as part of the Development Agreeiilent. Impact Fees (Existing Fees). (a) Childcare Impact Fee (SSFiv1C, ~ 20.115.030; Resolution 1301-2001;) (b) Cultural Arts Fee (SSFMC, ch. 20. i O1) (May be paid as a credit against landscaping requireiiients) (c) East of 101 Traffic Impact Fee (Resolution x4-2007) (d) Oyster Point Grade Separation Fee (Resolution 102-96) (e) Sewer Impact Fee (R.esolution 97-2002) (f) General Plan Maintenance Fee (Resolution 74-2007) (g) Permit Processing Fees (Adopted pursuant to City's Master Fee Schedule for processing of land usf; entitlements, including with out limitation, General Plan amendments, zoning c;lianges, precise plans, development agreements, conditional use permits, variances, and transportation demand management plans) 2. Impact Fees (Potential Future Fees). (a) Commercial Linkage Fee Housing Element Program 1-3A: The City shall determine the feasibility of establishing a commercial linkage fee. Status: City has not yet initiated the process for adoption of a Commercial Linkage Fee. a~ sf-2634417 L=1 (b) Parks and Recreation Fee General Plm.? Policy .5..1-I-3: Prefer in-leu fees to dedication, u~,less sites offered for dedication provide features and accessibility similar ir. comparison to sites shown on [General Plan] Figure 5.1. .Status: City has prepared and published a Request for Proposal to develop a Pares 8i Recreation Fee. (c) Public Art Fee General Plan Policy 2--I-21: Initiate a study to increase provision of public art throughout the community through imposition of either on-site improverents or in-1_ieu fees. Statz~s: City has rot yet initiated the process fer adoption of a Public Art Fee. (d) :xr'etland Conservation Fees General Plan Policy 7.1-I-4: Require development on wetlands delineated in [General P lan] figure i-1 to complete assessment of biological resources. General ~Dla;z Policy 7.1-I-S: Work with private, non-profit conservation, and public groups to securf; funding for wetland and marsh protection and restoration projects. Status: While City continues to implement the General Plan policies, the process for a fee adoption has not yet been initiated. (e) Stormwater Fees General Plan Policy 8.2-G-1: Minimize the risk to life and property from flooding in South San Francisco. Status: The City has not yet initiated the process for adoption of a Stormwater Fee. 3. User Fees. (a) Sewer Service Charges (assessed as part of property tax bill) 4. Other Potential Exactions. (a) Capital Improvement Program Contribution (Resolution 98-2001) Genef-al PIa~2 Policy 4.2-I-6: Incorporate as part of the City's Capital Improvement Program (CIP) needed intersection and roadway improvements to enhance mobility in thE; East of 101 Area. sf-2G34417 L- 2 ~~ Status: Adopted and updated from time to time. (b) bass Decontaminatioi; Facility Contributio~j (c) Green Building requirements S. Existing General Plan East of 101 Sub-Area Policies. (a) E;nployee-Serving Amenities General Plan Policy 3.5-I-8. Encourage -the development of employee-serving amenities with restaurants, cafes, support commercial establishments such as diy- cleaners, to meet the needs of t}ie employees in the East of 101 area. Such uses could be located in independen± centers or integrated into office parks ar [sic) te:,hnologv campuses. (b) Waterfront Enhancement Ueneral Plan Policy 3..5-I-13: Facilitate waterfront enhancement and accessibility by: • Establishment of use°s that would bring people to t11e waterfront (see policies 3.S-I-8 and 3.S-I-9); • Establishment of a r>ayshore design review area as part of the mooning Ordinance; and • Ensuring that the Park Recreation and Open Space Master Plan include specific irriprovements for shoreline enhancement and accessibility, as spelled out in the East of 101 Area Plan. sf-2634417 L---3 ~ ` ExHIBIT M: Confidentiality Agreement of April 15, 2009 sf-2634417 MN 1195207-10 ~~ M-1 GYST'ER POINT MARINA T~I;VELOPMENT - CONFILENTIALITX ArREEiviENT This Agreement {"Agreement") is entered into as of April ~, 2009 ("Ef~'ective hate") by and among the City of South San Francisco ("City"), the Redevelopment Agency of the City of South San Francisco ("A.gency'~, and Oyster Point Ventures LLC ("Developer") (collectively, the "Parties"). The Parties wish to pmtect the confidential information of each Party, ac+~ng as a discloser (each a "Discloser"), that maybe disclosed to each other Party (each a "Recipient"} in conne~on with Discloser perrrutting certain employees, agents, andlor consultants of P~ecipient ("Designated Personnel") to receive and review, and to be provided with copies of, irurormation and materials related to the financial and business activities of Discloser. The ilnfonnation may be disclosed for the purpose (the "Purrpose") of attempting to resolve certain issues that have arisen or may arise between Recipient and Discloser mlated to the negotiation, planning, and implementation of the collaborative development of the Oyster Point 1~Iarinar'Oyster point Business Park area (the "Project"). In consideration of the foregoing and the rights and obligations set forth herein, the Pasties hel-eby agree as follows: 1. PROPRIETARY INFORMATION. "Proprietary Information" means ~y and all inforraa ion and material disclosed by Discloser to Recipient or obtained by Recipient t'nraiigh inspectson or observation of Discloser's financial or business records, property, facilities cr businesses processes or activities, whether before or after the signing of this Agreement. Proprietary Information, includes, without limitation, any (a} financial, technical, architectural, engneering, real estate, marketing, servicing, personnel and other information and materials of Discloser and its employees, consultants, investors, affiliates, suppliers, vendors, customers, clients and other persons and entities; and {b) trade secrets, know-how, ideas, designs, drawir:gs, data, plans, strategies, and forecasts: 2. Norr-Dzsct,osvRE AND Lrnsrr~u USF. Recipient shall hold all Proprietary Information in strict cor~iidence and shall not disclose any Proprietary Information to any third party w-ithout the prior written consent of Discloser, whose consent maybe granted, withheld or conditioned in its sole and absolute discretion. Recipient shall disclose the Proprietary Information only to its Designated Personnel on a need-to-know basis. Recipient shall not and shall not permit any Designated Personnel to use any Proprietary Information for the benefit of itself or any third party or for any purpose other than the Purpose. Recipient shall take the same degree of care that it uses to protect its own confidential and proprietary information of similar nature and .importance {but in no event less than reasonable care) to .protect .the confidentiality and avoid the unauthorized use, disclosure, publication or dissemination of tb:e Proprietary Information. Each Party shall obtain the consent of the other Parties prior to issuing or permitting any of its officers, employees or agents to issue any press release or other information to the press with respect to the Project or the Proprietary Information. Recipient shall not make any copies of the Proprietary Information except to the extent reasonably necessary to carry out the Purpose, or unless otherwise approved in writing in advance by Discloser. Upon conclusion of the Purpose or earlier termination of this Agreement by Discloser, (a) Recipient shall promptly return to Discloser, or, at Discloser's request, destroy, all materials (in written, electronic or other form) containing or constituting Proprietary sf-2670169 j MN 1221322-3 ~j Information; including; without limitation, ?ny copies and portions thereof, and {b) Recipient shall not use the Proprietary Information in any way for any purpose. 3. SCOPE. The obligations of this Agreement, including the restrctions on disclosure and use, shall not apply with respect to any Proprietary ?nformation tQ the extent such Proprietary Inforinaiio,~: (a) is or becomes publicly known t --~o~_-gh no act or omission of the Recipient; (b) was rightfully known by Recipient before receipt from Discloser, as evidenced by Recipient's contemporaneous written records; or (c) becomes rightfully known to Recipient without confidential or proprietary res~iction from a source other uhun Discloser that does not owe a duty of onfidentiality to Discloser with respect to such P'r-oprietary jrfoimation. In addition, Recipient rriay use or disclose Proprie4La.ry Information to the extent (i) approved in writing in advance by Discloser; or iii) Recipient is legally compelled to disclose such Proprietary Informaticr., provided, however, that prior to any such compelled disclos`~~e, Recipient shall give discloser reasonable advance notice of any such disclosure and shall cooperate wi+~ Discloser in protecting against any such disclosure andlor obtaining a protective order narrowing the scope of such disclosure and/or use of the Proprietary Information. 4. awNERS1ftTF. All Proprietary Information {including, without limitation, all copies, excerpts, and portions thereof) is and shall remain tape sole property of Discloser. Recipient does not acquire (by license or otherwise, whether express or implied) any intellectual property rights or other rights under this Agreement or any disclosure hereu~.der, except the limited right to use such Proprietary Inforration in accordance with the express provisions of this Agreement_ All rghts relating to the Proprietary Information that are not expressly granted hereunder to Recipient are reserved and retained by Discloser. 5. TERMINATION Discloser may temninate this Agreement at any time upon written notice, and shall have no obligation to disclose any Proprietary Information or to continue discussions relating to, or to enter into or continue any arrangement or agreement relating to, the Purpose or any other matter, except as agreed in writing by the Parties. 6. SURVIVAL OF CERTAIN RYGHTS AND Oi3LIGA.TTONS. Sections I through 4 and 6 through 9 shall survive the expiration or termination of this Agreerrient. 7. REMEDIES. The Parties agree that, due to the unique nature of the Proprietary Information, the unauthorized disclosure or use of the Proprietary Information will cause irreparable harm and significant injury to Discloser, the extent of which will be difficult to ascertain and for which there will be no adequate remedy at Iavv. Accordingly, the Parties each agree that each other Party, acting as Discloser, in addition to any other available remedies, shall have the right to an immediate sf-2670169 2 MN 1221322-3 ~~ injunction and other equitable relief e~sjoining any breach or threatened breach of this Agreement; without the necessity of posting any bond or other securty. Each Party, acting as Recipient, shall notify lliscloser in wTidng immediately upon Recipient's becoming aware of any such breach or threatened breach. g. 11xISCELf.A ~~OLtc_ i his Agr:.cment constib~'r~s the, entire agreement among the Parties concerning the subject n~aiter hereof and supersedes all prior or contemporaneous representations, discussions, proposals, negotiations, condir~on;, communicataions and agreeruents, whether oral or written, among the Part,;;,s relating tc the subject matter hereof and au past co-~~es of dealing or industry custom. Nc amendment, modification or •Naiver of any provision of this Agreement shall be effective unless in writing and signed by duly authorized signatories of each Party. The waiver by any Party of a breach of or a default under any provision cf this Agreement shall not be cons~ied as a waiver of any subsequent breach of ar default under the sa-r-e or any other provision of this Agreement, nor shall any delay or omission on the part of any Party to exercise or avail_ itself of any right or remedy mat it has or may have hereunder operate as a waiver of any right or remedy. This Agreement shall be governed by and. construed in accordance with the laws of the State of California, USA; without reference to its conflicts of laws provisions. Should legal action arise concerning L'ris Agreement, the prevaiizrtg Party sha;I be enfitled to recover all reasonable attorneys' fees anal rel ted costs, in addition to any other relief which maybe a-;varded by any coact or other tribunal of competent. jurisdiction_ This Agreement and the rights and obligations hereunder may not be assigned or delegated by any Party, in whcIe or part, whether voluntarily, by operation of law, change of control or otherwise, without the prior written consent of the over Parties. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. In the event that any of the provisions of this Agreement shall be held by a court or other tn'bunal of competent jurisdiction to be invalid or unenforceable, the remaining portions hereof shall rerr~ain in full force and effect and such provision shall be enforced to tb.e maximum extent possible sa as to effect the intent of the Parties and shall be reformed to the extent necessary to make such provision valid and enforceable. The Parties are independent contractors, and no Party shall have any authority of any land to bind any other Party in any respect whatsoever. IN WITNESS WHEREOF, the Parties hereto have executed this Confidentiality Agreement as of the day and first above r~rritten. sf-2674169 iv1I~1 1221322-3 3 ~~ CITY CITY CF S~.UTH S:4N ~ ItANCiSCO, a mu,ui-.inal corporation T `~ Y ~ .. ,'a By: - ~/ ~:ame: Barry Nagel, City Manager ATTEST: ~~ nn ,,, Cork AF rROYED A.S TO FCC . r-., ~,,. 1 r- City Att~~ney sf-2670169 Miti' 1221322-3 AGENCY REuivVELOPMENT ti.GENCY OF THE CITY Ok' SOCi`!~'I-r SAN FRANCISCO, a publi ody,~t~osr~rate atzd ~o]itic j(~ (1 B I`• 1 f ,, Nar;«; ]parry Nagel, Executive ;~irector A`TT'EST: 3y: Agency Secretary APPRQVED AS TO FDRM: By: 4 Agency Genera] Counsel ~~ _. DEVr,LQPFR OYSTERPOINT VENTURES LI,C, a Delaware united fiability company By: SRT I~u~e C~~er Poirrt LL(~, a Delaware limited liability company, its- M r~ g Member By: y ~ 't.-----~ Name: `~ Its: , -~ .--~_.--~--- ~y: SKS Clyster Point, LLC, a Delaw~ure limited liability co~nr~zy, its Meii~ber ~--.. Ly:_ 1, t ~ ~- Name: ;.:~ ~~-'~--.L i'_- ~_ - its. ~ ~`'ti`.v ~Y• ~V. ~ vii.- .~i/' sf-2670169 5 ~ 1 Draft 510712009 MEMORANDUM Gr UNDERSTANDING (Harbor District -Oyster Point Marina) THIS MEMORANDUM OF UNDERSTANDING (this "MOU"), dated and made effective as of May , 2009 (the "Effective Date"), is entered into by and among the City of South San Francisco, a municipal corporation ("City"), tre Redevelopment Agency of the City of South San. Francisco, a public body, corporate and politic ("Agency",1, and the San Mateo County Harbor District, a political s~~bdivision of the State of California (°District"). City, Agency and District are hereina~er collectively referred to as tree "Parties." RECITALS A. Gity is the owner of certain real property located in the City and commonly knows as the r~~ ~~.~~ Oyster Point iv1arina ("Marina Property"), as shown on the parcel map attached hereto as ~'~1~~~t A City and District have entered into a joint powE;rs agreement related to the development, operations, and maintenance of the Marina Property pursuant to Governrnent Code section 6500 et seq. ("JPA"). City desires redevelopment of the Marina Property including potential commercial and office/research and development uses and public amenities. B. Cistrict has entered into certain long-term leases with King Ventures for certain po~~ions of ~, ~- ~x the Marina Property ("King Leases"), as shown generally on E~!~ib~~ The King Leases require King Ventures to develop, construct, and mainl:ain a hotel and a commercial, village-style complex, but to date, King Ventures has not accomplished the goals and obligations pursuant to the King Leases. Districts uses rent revenue from the King Leases to pay debt service on loans from the California Department of Boating and Waterways ("DBW"), which has a security interest in the King Leases. C. Oyster Point Ventures, LLC ("Developer") is the owner of certain property located in the City, commonly known as the Oyster Point Business Park ("Business Park"), and adjacent to the Marina ~£~ ~ Property as shown on ~~~ ~'. Developer acquired the Business Park for the specific purpose of redeveloping the Business Park as a modern research and development life sciences campus with substantial public amenities. In light of discussions with City regarding redevelopment of the Marina Property, Developer proposed a collaborative process to plan and carry out an integrated development of the Marina Property and the Business Park. D. Developer has proposed the development of an officelresearch and development life sciences campus, commercial development (including retail, restaurants, and hotel uses), and substantial public amenities located on the Business Park and the Marina Property ("Project"). Developer has an option to acquire King Ventures' interests in the Marina Property. E. The Parties anticipate that the Project will require one or more agreements with Developer to exchange interests in the King Leases sand portions of the Marina Property ("Conveyance Agreement"), an Owner Participation Agreement or similar agreement ("OPA") to establish financing terms for development of portions of the Marina Property, and land use entitlements to govern development of Project components at the Business Park and portions of the Marina Property ("City Approvals") (collectively, the "Developer Binding Agreements"). The Parties have agreed that the City and the Agency shall be the entities that negotiate and contract directly with Developer. F. In conjunction with the Project and negotiation of the Developer Binding Agreements, the Parties desire to provide for an assignment of the King Leases to Developer and a collaborative process 1229490-1 ~ Oyster Point Marina -Harbor District GIC~ Memorandum of Understanding / (/ Draft 510712009 regarding future capital improvements, develcpment and management at the Marina Property. Th.e Parties anticipate that the operations at the fviarina vrill benefit from the Project and the future proximity to Developer's life sciences campus, but thatt'rie Project may have fiscal impacts on District's operations at the Marina Property. G. As a result, the Parties wish to enter into this MGU to (i) detail the conceptual understanding upon which tree District is consenting to the ussigr ~ment of the leases to Developer and will consent to further changes affecting the leases necessary for the Project; (ii) establish a framework for analyzing the effects of the Project on the JPA and existing leases; and (iii) identify issues for resolution in one cr more binding agreements among the District, the City and the Agency (collectively, the "District Binding Agreements") to be concluded on roughly the same timetable as the Developer Binding P,greements. H. This MvU does not authorize the proposed construction of the Projector any other improvements and will not result in either a direct or reasonably foreseeable indirect physical change in the environn-iert; rather, this MOU only commits the Parties to certain obligations related to trte planning and negotiation of improvements to and management of the Marina Property as described herein. City, in eetal Gtuality Act (Section 21000 et seq. of the conjunction with Agency, pursuant to the California Environm , Public Resources Code, and tl ie Guidelines set fog h at 14 California Code of Regulations sectio~~ 15000 et seq., "%EQA"), will prepare an EIR to evaluate the potential environmental impacts of the proposed Project. it j y has prepaied No ~,onstruction v:ill be authorized until (i) C y, in con unction with Agenc , , certified as adequate and approved an EIR; (ii) City has approved the land use entitlements required farencies have and (iii) any agreements or regulator; permits required by an, other appi.~ab~e regulatory g been obtained. NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: Section 1 Purpose of this MOU. This MOU is intended as an expression of preliminary points of agreement among the Parties. The Parties expressly acknowledge and agree that: (i) the terms and or modification b the overnin bodies of conditions set forth in this MOU are subject to the approval of, Y~ 9 9 City, Agency and District; and (ii) following approval of this MOU by City, Agency and District, the Parties intend to execute the District Binding Agreements that incorporate the terms and conditions of this MOU after preparation of a program level EIR for the Project as required by CEQA and Section 8 below. Section 2 Preliminary Terms; No Obligation to Proceed. Nothing in this MOU creates a binding obligation, and no binding agreement will exist unless the Parties sign the District Binding Agreements. Each Party expressly acknowledges and agrees that this MOU creates no obligation on the part of any Party to: (i) enter into a binding agreemE:nt related to the terms and conditions set forth in this MOU; (ii) grant any approvals or authorizations required for the Project; (iii) agree to any specific terms or obligations; (iv) provide financing for improvements to the Marina Property or the Project, or (v) proceed with the development of the Marina Property. Ali of the terms set forth in this MOU are preliminary in nature and subject to approval by the City, Agency and District and memorialization in the District Binding Agreements among the Parties. The Parties acknowledge that the Project and any proposed improvements to the Marina Property may be revised as thE~ environmental, financial and planning processes proceed and, 1229490-1 2 Oyster Point Marina -Harbor District q~ Memorandum of Understanding // Draff 510712009 provided that the Parties approve of suclh revisions, That the terms and conditions of this MOU may be modified. Section 3 Good Faith Efforts to Negotiate. This MOU only binds the Parties to negotiate in good faith for the purposes specified herein. City, Agency and District shall use reasonable efforts to complete negotiations for and preparation of the Liistrict Binding Agreements. Furthermore, 'the Parties shail use reasonable efforts to obtain any third-part; consent, authorization, or approval required in connection with the transactions contemplated hereby. in addition, City and Agency shall negotiate in good faith with Developer on the Developer Binding Agreements for the Project. Section 4 Term. The term of this i~lOU (the "Term") shall commence on the Effective Date, and shall terminate [five hunitrec forfy (540)] days thereafter, unless extended or earlier terminated as provided herein. The Term may be extended for up tc a maximum of three (3) thirty (30) additional calendar day terms upon the mutual written agreement of District acting through and in the discretion of its General Manager, the Agency acting through and in the discretion of its Executive Director and the City acting through and in the discretion of its City Pv1anager. Section 5 District Binding Agreements; Marina Operations, 5.1 Contemplated Provisions. Provided that City, Agency and- Developer enter into Developer Binding Agreements, City ar~d/or Agency will agree to incorporate the following terms into the District Binding Agreement to mitigate anticipated fiscal impacts to District: 5.1.1 Lease Revenue. For the purpose of commencing development of the Project, in the event the King Leases are terminated prior to District's repayment of the DBW loan, Agency will (i) provide the District an annual amount not to exceed the amount of minimum rent, including inflation adjustments set forth in the King Leases, that District is already entitled to under the King Leases ("King Lease Rent") commencing after termination of the King Leases and continuing until the currently contemplated termination of debt service to DBW in 2019, and (ii) discuss in good faith with the District the payment by the Agency of either (a) additional annual amounts not to exceed the King Lease Rent commencing after the contemplated termination of debt service to DBW in 2019 until the currently contemplated termination of the JPA in 2026 ("Additional King Lease Rent") or (b)an amount equal to the then-net present value of the Additional King Lease Rent to finance public improvements to the Marina Property (in addition to the public improvements set forth in Section 5.1.2). Agency will prorate any funds provided to DBW if the King Leases are terminated during a portion of a year. 5.1.2 Marina Improvements.. City andlor Agency shall make good faith efforts to allocate funds or arrange financing for the replacE~ment of one dock on the Marina Property in an amount not to exceed One Million Five Hundred Thousand Dollars ($1,500,000.00) in connection with the Project. To the extent financially feasible, it is the intent of the parties to replace two docks when necessary to maintain the functioning and quality of the marina as fhe Project is being implemented. In addition and independent of the understanding in the prior sentences, City and District have previously agreed that the City will reimburse the District One Million Three I~undred Forty Thousand Dollars ($1,340,000) for dredging and breakwater improvements to the Marina Property previously undertaken by City out of the City's share of Measure A sales tax funds. 1229490-1 3 Oyster Point Marina -Harbor District I~ Memorandum of Understanding Draft 510712009 5.2 District Office Space. in order to assist District reduce its operating costs, City :^.~ill cooperate with District to identify approximately 5,OG0 square feet of temporary office space to District for the District use located within the City. Provided that a hotel andlor commercial space is developed on the Pvlarina Property retained by City, City andlor Agency will provide District with office space to District within such proposed commercial building. City's yogi is to provide such space without cost to District if financially feasible. If no appropriate space for the District office is developed, the Parties will discuss the possibility of providing a portion of the iv1arina Property or which District may develop its o~.~n headquarters and a small commercial development to provide the District with ongoing revenue. 5.3 District Obli atq ions. 5.3:1 Consent to Lease ,Assignment. Upon written request by Developer, District will consent by resolution, to an assignment of the King Leases from King Ventures to Developer. District will cooperate with Developer to obtain consent of such assignment from DBW. 5.3.2 Capital Improvement and Management Plan. Not later than 12 months after the Effective Date, District grill provide the City with a draft capital improvement plan until the end of the JPA (2026) and a management plan to increase berth occupancy and direct revenue. The Parties agree to cooperate and collaborate to refine such capital improvement plan and work to integrate its implementation as part of the Project, including the mutually supportive use of financing mechanisms available to the respective parties. Section 6 Development of the Project. 6.1 Consultation with District. City and Agency shall confer with and provide reasonable and timely opportunities for District to comment on the development of plans for the Project and to cooperatively work with District to address potential impacts of the Project (including both its construction and implementation phases) on District operations on or near the Marina Property. 6.2. Public Improvements. Agency anticipates providing tax increment funding for infrastructure improvements to the Marina Property consistent with the Preliminary Site Plan previously prepared by Developer, including reconfigured streets and utilities, recreation fields, environmental remediation, landscaping, grading for new commerciallhotel use, and repavement of parking (collectively, "Public Improvements"). City andlor Agency will consult in good faith with District regarding the Public Improvements related to the Marina Property, provided that the Public Improvements affect the District's capital program and marina operations. 6.3 Transfer of Marina PropE~~(. District will agree to conveyance of portions of the Marina Property to King VentureslDeveloper, provided that (i) mutually acceptable District Binding Agreements are executed by the Parties, and (ii) City andlor Agency consults with District on the planning and development of the Project as required by this MOU. 6.4 JPA Amendment. Provided that mutually acceptable District Binding Agreements are executed, City and District will amend thE; JPA in order to: (i) facilitate the development of the Project by Developer; (ii) address the ongoing roles and responsibilities of the Parties as they may be modified as a consequence of the Project; and (iii) facilitate improvements by District of the harbor and marina related to 1229490-1 4 Oyster Point Marina -Harbor District ~~ Memorandum of Understanding Craft 5/07/2009 the capital improvement program. In addition, the Parties will discuss in good faith the extension of the JPA beyond 2C26 if that would facilitate the Project and the mutual interests of the Parties. Section 7 Revenue Participation. The parties contemplate that if City and/or Agency undertake or cause the development of a hotel and/or commercial space on the Marina Property, the District Yvould receive a share of financial participation in order to compensate the Districf for the reasonable value of lost opportunities under tiie JPA (as determined mutually and in good faith) and, if the ,iPA is extended, to facilitate future public improvements to thE; harbor and marina. Secti n 8 CEQA Compliance. Any approval of by City and/or Agency r elated to t~ ie Public Improvements centemplated by this MOU or the Project shall be subject to and in full compliance with CEQA. iJo construction or binding agreements among the Parties will be authorized until (i) City, in conjunction with Agency, has prepared, cE:rtified as adequate and in full compliance ~~rith CEQA, and approved an EIR and related findings; (ii) City has approved the Project Entitlements over which it has jurisdiction; and (iii) any agreements or regulatory permits required by any other applicable regulatory agencies have been obtained. The Parties anticipate undertaking and completing a program level EIR under CEQA for the entire Project, including the Public Improvements, and a project level EIR under CEQA for each phase of the Project. The Parties further contemplate that Developer will pay all funds necessary for preparation of ar, EIR. Section 9 Execution of District Finding Agreements. Provided that City and Agency have completed a program level EIR for the Project and City, Agency and Developer successfully complete negotiations for and preparation of an OPA, Conveyance Agreement and any other agreements related to the City Approvals, the Parties intend to incorporate the terms and conditions of this MOU into the District Binding Agreements. The Parties shall have no legal obligation to grant any approvals or authorizations related to this MOU unless and until their respective governing bodies have authorized execution of the District Binding Agreements. Section 10 Expenses. The Parties understand that Developer may reimburse District for District's legal costs related to the Project as well as any other consulting costs incurred in connection with this MOU and the activities contemplated by the Parties, including but not limited to the preparation of a draft capital improvement plan. Section 11 Marina Property Access. During the Term, District shall provide City, Agency and/or Developer access to the Marina Property and will cooperate with City, Agency and/or Developer to enable such parties or their representatives to obtain access to the. Marina Property for the purpose of obtaining data and making tests necessary to investigate the condition of the Marina Property, provided that City, Agency and/or Developer comply with all safety rules and does not unreasonably interfere with the operations of any current tenants. City, Agency and/or Developer shall at all times keep the Marina Property free and clear of all liens and encumbrances affecting title to the Marina Property. Section 12 Termination; Effect of Termination. This MOU may be terminated for cause at any time by any Party. Upon [thirty (30)] calendar days prior written notice and upon a showing of cause, each Party shall have the right to terminate this MOU in its sole discretion. Upon termination as provided herein, or upon the expiration of the Term and ar,y extensions thereof without the Parties having successfully negotiated the District Binding Agreements, this MOU shall forthwith be void, and there shall be no further liability or obligation on the part of each Party or their respective officers, employees, agents or other 1229490-1 5 Oyster Point Marina -Harbor District Memorandum of Understanding ~ a ~ Draft 510712009 representatives; provided however, the provisions of Section 10 (Expenses) and Section 11 (iVlarina Property Access), shall survive such termination. Section 13 Notices. Except as otherwise specified in this MOU, all notices to be sent pursuant to this "10U shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Parties ir. accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; or (ii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service. City: City cf South San Francisco 400 Grand Ave. South San Francisco, CA 94080 Attn: amity Manager Phone: (650) 829-6620 Facsimile: (650) 829-6623 Agency: Redevelopment ,4gency of the City of South San Francisco 400 Grand Ave. South San Francisco; CA 94080 Attn: Executive Director Phone: (6~i0) 829-6620 Facsimile: (650) 829-6623 with a copy to: Meyers Nave 575 Market Street, Suite 2600 San Francisco, CA 94105 Attn: Steven T. Mattas Phone: (415) 421-3711 Facsimile: (415) 421-3767 District: San Mateo County Harbor District. 400 Oyster Point Blvd., Suite 300 South San Francisco, CA 94080 Attn: General Manager Phone: _ Facsimile,. Section 14 Severabili If any term or provision of this MOU or the application thereof shall, to any extent, be held to be invalid or unenforceable, such term or provision shall be ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining terms and provisions of this MOU or the application of such- terms and provisions to circumstances other than those as to which it is held invalid or unenforceable unless an essential purpose of this MOU would be defeated by loss of the invalid or unenforceable provision. 1229490-1 6 Oyster Point Marina -Harbor District l O 2 ~Jlemorandum of Understanding Draft 510712009 Section 1~ Entire Agreement; Amendments in Writing; Counterparts. This MOU contains the entire understanding of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and under:>tandings, ora! and written, between the Parties with respect to sack subject matter. This MOU may be amended only by a written instrument executed by the Parties or their successors in interest. This MOU may be executed in m~!!tip!e counterparts, each of which shall be an original and all of which together shall constitute one agreement. Section 16 Successors and Assigns; No Third-Party Beneficiaries. This MOU shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns; provided however, that neither Party shall transfer or assign any of such Party's rights hereunder by operation of iaw or otherwise without the prior written consenl; of the other Party, and any such transfer or assignment without such consent shall be void. Subject to the immediately preceding sentence, this MOU is not inte-~ded to benefit, and shall not run to the benefit of ~r be enforceable by, any other person or entity other than the Parties and their permitted successors anti assigns. Section i7 Governing Law. This MOU shall be governed by and construed in accordance with the laws of the State of California. Section 18 Relationship of Parties. The Parties agree that nothing in this MOU is intended to or shall be deemed or interpreted to create among them the relationship of buyer and seller, or of pa ~ners or joint venturers. Section 19 Captions. The captions used in this MOU are for convenience only and are not intended to affect the interpretation or construction of the provisions hereof. IN WITNESS WHEREOF, the Parties have executed this Memorandum of Understanding effective as of the date first written above. CITY AGENCY CITY OF SOUTH SAN FRANCISCO, REDEVELOPMENT AGENCY OF THE CITY OF a municipal corporation SOUTN SAN FRANCISCO, a public body, corporate and politic gy: _ By: Name: _ Name: City Manager Executive Director ATTEST: By: City Clerk APPROVED AS TO FORM: ATTEST: By: Agency Secretary APPROVED AS TO FORM: 1229490-1 7 Oyster Point Marina -Harbor District I b Memorandum of Understanding Draft 510712009 By: City Attorney By: Agency General Counsel DISTRICT SAN MATED COLINTY NARBUR DIS I R!CT, a political subdivision of the State of California By Name General "Manager 1229490-1 Oyster Point Marina -Harbor District ' ~ 5 Memorandum of Understanding Draft 510712009 Exhibit List EXHIBIT A MAP OF THE PROPERTY 1229490-1 g Oyster Point Marina -Harbor District j Ob Memorandum of Understanding ~~cx s~,~ 0 cl ~ y H O c'~LIFOR~~~ t R rt A n m a ego e u DATE: May 13, 2009 TO: The Honorable Mayor and City Council The Honorable Chair and Redevelopment Agency Board FROM: Marty Van Duyn, Assistant City Manager SUBJECT: Edits to the Staff Report for Oyster Point Ventures ("S/SKS") 'T'his addendum is a list of minor edits to the Staff Report regarding the redevelopment of Oyster Point Marina. In summary, the edits clarify that (1) only certain S/SKS obligations relate to Phase I of the Project as opposed to the entire Project, (2) commencement of when the price of the King Leases is reduced, and (3) the estimated amount of the environmental remediation. These are not substantive changes to any of legal documents or attachments, but for the purpose of clarifying the public record, the edits to the Staff Report are listed below. Capitalized terms used in this addendum have the same meaning as in the Staff Report. 1. The Staff Report suggested that S/SKS would obtain all land use entitlements for the entire Project prior to the Horizon Date, however S/SKS is only required to obtain all entitlements for the buildings and improvements for Phase I of the Project. The following clarifications are made: a. Page 3, Section I, last sentence: I~1o construction will be authorized until (i) City, in conjunction with RDA, has prepared, certified as adequate and approved an Environmental Impact Report under CEQA; (ii) City has approved the land use entitlements (including the General Plan Amendment. Zoning and Master Plan for the Proiect) and all other entitlements required for Phase I of the Project; and (iii) any agreements or regulatory permits required by any other applicable regulatory agencies have been obtained. b. Pale 4, Section LA.S, last sentence: The City and S/SKS will not exchange property interests until the City has completed the CEQA analysis, S/SKS has obtained all entitlements for Phase I of the Project, and S/SKS has provided evidence of project financing and a written commitment to the City to commence construction of Phase I of the Project. c. Page 6, Section I.B: In order to initiate development of the Infrastructure Improvements, Phase I of the Project requires an investment of $16,640,908 from the Redevelopment Agency in addition to a $44,166,618 investment from S/SKS. Staff Report -Addendum Subject: Edits to the Staff Report regarding Oyster Point Ventures Page 2 of 3 d. Page 7, Section LC.I The City/Agency will have certain remedies (described below) if S/SKS fails to satisfy the following MOU obligations by the ninth (9th) anniversary of the Commencement Date (the "Horizon Date"): • Obtain CEQA and General Plan, Zoning, and Master Plan-level entitlements for the entire Project contemplated by the MOU; • Obtain all additional entitlements for construction of Phase I of the Project from the City and all other regulatory agencies with jurisdiction over the Project; • Demonstrate financing for Phase I of the Project; and • Provide a written, binding commitment with the Redevelopment Agency to commence and diligently complete construction of Phase I of the Project within four years after the Horizon Date, with the exception of any force majeure events mutually agreed upon by the Parties. City staff estimates that it will require three to four years for S/SKS to take all actions necessary to comply with CEQA and obtain the land use permits listed above. Thus, S/SKS will have approximately six to seven years (including a one year cure period described below) to make a binding commitment to commence construction of Phase I of the Project, which is subject to the remedies described below. e. Page 8, Section LC.2: • If the City elects to give the notice, S/SKS shall have one (1) year ("Cure Period") after the City/Agency's Notice to: (i) obtain all entitlements for Phase I of the Project, (ii) demonstrate financing for Phase I of the Proiect, and (iii) provide to City/Agency a written, binding commitment to commence and diligently complete construction of Phase I within three (3) years after the Horizon Date, with the exception of any force majeure events mutually agreed upon by the parties. f. Page 9, Section I.D.1: Prior to entering into any binding agreements, the City, Redevelopment Agency and S/SKS will conduct the required analysis pursuant to CEQA and undertake all planning activities for a General Plan Amendment Zoning Master Plan and other maior land use entitlements for Phase I of the Proiect. As necessary, such planning activities will likely include the following: g. Page 10, Section I D 2 (under "Owner Participation Agreement"), 6th Bullet Point: • Redevelopment Agency may terminate the OPA and acquire the King Leases if, by the 10th anniversar~~ of the Commencement Date (as described above), S/SKS does not provide a written Staff Report -Addendum Subject: Edits to the Staff Report regarding Oyster Point Ventures Page 3 of 3 commitment to commence and diligently complete construction of Phase I by the 13th anniversary of the Commencement Date (described above); h. Page 10, Section I.D.2 (under "Conveyance Agreement"), 2nd Bullet Point: • City and S/SKS will not exchange property interests until S/SKS has obtained all entitlements for a General Plan Amendment Zoning Master Plan and any other land use entitlements for Phase I of the Proiect, the City has completed the analysis under CEQA, and S/SKS has provided to the City a written commitment to commence construction of Phase I of the Project. 2. In the event of termination of the OPA, the price of the King Leases is reduced only if S/SKS fails to satisfy its obligations after the 7th anniversary of the Commencement Date. On Page 8, Section I.C.2, last bullet point should read as follows: • Decrease the purchase price for the King Leases by $500,000 for each year Developer fails to complete the actions after the 7th anniversary of the Commencement Date, for a maximum purchase price reduction of $1,500,000. 3. The estimated cost of environmental remediation for the City's property is approximately $17.8 million, not "$18.7 million" as written on Page 4, Section I.A.S. 1235763-2