HomeMy WebLinkAboutReso - CC - 085-2019RESOLUTION NO. 85-2019
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME
ADOPTING AN AMENDMENT TO THE DISPOSTION AND DEVELOPMENT
AGREEMENT WITH PACIFIC WEST COMMUNITIES, INC. REGARDING CITY LOTS
FAND N
WHEREAS, the City Council determined that City Parking Lots F and N could be
developed to provide for both affordable housing and better parking for the downtown area; and
WHEREAS, the City Council considered various proposals and ultimately entered into a
disposition and development agreement with Pacific West Communities, Inc. in 2016 for
development of Lots F and N; and
WHEREAS, the proposed development has since secured development entitlements
through the Planning Commission; and
WHEREAS, Council has given direction on certain key terms for the project, including
that Lot F should be sold to the developer with the possibility of repurchasing the land at the end
of the affordability covenant; and
WHEREAS, the original disposition and development agreement should be amended to
reflect this direction.
NOW, THEREFORE, BE IT RESOLVED, that:
1. The Council approves an amendment to the Disposition and Development
Agreement entered into with Pacific West Communities, Inc. on June 13, 2016, in the
form attached to this Resolution.
2. The City Manager is authorized to execute that amendment on behalf of the City.
Mayor
Amendment to DDA
I, MEAGHAN HASSEL-SHEARER, City Clerk of the City of Burlingame, certify that the
foregoing Resolution was introduced at a regular meeting of the City Council held on the 1 st day
of July, 2019, and was adopted thereafter by the following vote:
AYES: COUNCILMEMBERS: BEACH, BROWNRIGG, COLSON, KEIGHRAN, ORTIZ
NOES: COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE
f,.
ity Clerk
Amendment to DDA
FIRST AMENDMENT TO DISPOSITION
AND DEVELOPMENT AGREEMENT
This First Amendment to Disposition and Development Agreement ("First
Amendment") is entered into effective as of July , 2019 ("Effective Date") by and between
the City of Burlingame, a California municipal corporation ("City") and Pacific West
Communities, Inc., an Idaho corporation ("Developer"). City and Developer are hereinafter
collectively referred to as the "Parties."
RECITALS:
A. City is the owner of certain real property bound by Park Road and Lorton
Avenue, referred to as Lot F ("Housing Property") and real property bound by Lorton Avenue
and Highland Avenue, referred to as Lot N ("Garage Property"). The Housing Property and
Garage Property are both currently developed as surface parking lots available to the public.
B. City and Developer are parties to that certain Disposition and Development
Agreement dated June 13, 2016 ("DDA") which provides, among other things, for City to either
ground lease or convey a fee interest in the Housing Property to Developer for the development
of a multi -family, affordable rental Housing Development consisting of approximately 144 units,
including a pocket park and on -site parking and for the parties to concurrently develop a separate
approximately 368 space Garage Development (for a net increase of 162 spaces over those lost
through the development) on the Garage Property, subject to the terms, covenants and conditions
set forth in the DDA.
C. As provided in Section 2.1 of the DDA, Developer and City have reached
agreement on the method for transferring an interest in the Housing Property to facilitate
development of the Housing Development and have mutually concluded that City's conveyance
to Developer of a fee interest in the Housing Property, subject to a right of reverter upon
occurrence of certain events, is preferable to a ground lease structure.
D. City and Developer now desire to amend the DDA to delete all references to
ground lease or ground rent, as well as confirm that the Housing Property will be disposed of by
way of a fee sale and that the City will have the additional option to repurchase the Housing
Property and Housing Development in the future upon expiration of the Affordable Housing
Covenant.
NOW, THEREFORE, in consideration of the mutual covenants and promises of the
parties herein contained, the City and Developer agree as follows:
AGREEMENTS:
Recitals. The foregoing recitals are true and correct and hereby incorporated herein.
2. Defined Terms. All capitalized terms not defined herein shall have the meanings
ascribed to them in the DDA.
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3. Amendment of Section 2.1. Section 2.1 of the DDA is hereby amended and restated in
its entirety to read as follows:
"2.1 Purchase and Sale. Subject to the terms, covenants and conditions of this
Agreement, Developer shall purchase from City and City shall sell to Developer the
Housing Property with the conveyance to be effectuated via delivery and recordation of
the Grant Deed."
4. Amendment of Section 2.2. Section 2.2 of the DDA is hereby amended and restated in
its entirety to read as follows:
"2.2 Purchase Price; Note and Deed of Trust; Developer Deposit. The total
purchase price for the Housing Property shall be equal to the appraised fair market value
of the Housing Property based on its highest and best use in accordance with Applicable
Laws as of the date of the Development Approvals ("Purchase Price"), as outlined
below. Within thirty (30) days following the Effective Date of this First Amendment,
City and Developer shall meet and confer and agree upon (i) a set of appraisal
instructions governing the preparation of a self-contained appraisal report of the Housing
Property, and (ii) an MAI appraiser to undertake and complete the appraisal assignment.
The Parties shall endeavor to cause said appraisal to be completed by the selected
appraiser within sixty (60) days of the approval of the appraisal instructions. Developer
shall pay all fees, costs and expenses of the appraisal. The fair market value of the
Housing Property, as determined by said appraisal, shall be the Purchase Price for the
Housing Property.
Payment of the Purchase Price at Closing shall be made in the form of a
promissory note ("Note") in the amount of the Purchase Price in favor of City. The Note
shall be substantially in the form attached hereto as Exhibit G, and shall be secured by a
deed of trust ("Deed of Trust") recorded against the Housing Property, substantially in
the form attached hereto as Exhibit H.
Concurrent with the opening of Escrow in accordance with Section Error!
Reference source not found., Developer shall deposit One Hundred Thousand and
00/100 Dollars ($100,000.00) into Escrow with the Escrow Agent ("Developer
Deposit'). At Closing Developer shall be entitled to a credit in the amount of the
Developer Deposit as against the Garage Development Escrow Deposit. In the event that
this Agreement is terminated prior to Closing and Developer is not in Default as provided
in this Agreement, Developer shall be entitled to a refund of the Developer Deposit."
Deletion of References to Ground Lease. Ground Rent and Ground Leasehold Interest.
All references in the DDA to "Ground Lease", "Ground Rent", "ground leasehold interest' are
hereby deleted and replaced with Grant Deed, Purchase Price or fee interest, as applicable.
6. Amendment of Section 4. Section 4 of the DDA is hereby amended to add a new Section
4.5 to read as follows:
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"4.5 Repurchase At Expiration of Affordable Housing Covenant. City shall have
the additional right to repurchase the Housing Property and all improvements to be
constructed thereon at the expiration of the Affordable Housing Covenant by forgiving
any unpaid balance on the Promissory Note provided by Developer to City at the time of
Developer's purchase of the Housing Property. If such Promissory Note has been repaid
in full, City may repurchase the Housing Property, and all improvements thereon, at the
expiration of the Affordable Housing Covenant for the then appraised fair market value
of the Housing Property, including improvements thereon, based on the continuing use of
such property and improvements as an affordable housing development with levels of
affordability consistent with those set forth in the Affordable Housing Covenant. Such
right to repurchase shall be subordinate and subject to and be limited by and shall not
defeat, render invalid or limit: (i) any mortgage, deed of trust (including, without
limitation, any assignment of rents and leases) or other security instrument made by an
Institutional Lender (defined below); or (ii) any rights or interests provided in the DDA
for the protection of the holder of such mortgages, deeds of trust or other security
instruments. As used herein "Institutional Lender" means any one or more of the
following, who is not an affiliate of the Developer: a savings bank, a savings and loan
association, a commercial bank or trust company or branch thereof, an insurance
company, a governmental agency, a real estate investment trust, an employees' welfare,
benefit, pension or retirement fund or system, or an investment banking, merchant
banking or brokerage firm. City shall provide notice to Developer of its intent to exercise
its repurchase option under this provision at least one hundred eighty (180) days prior to
the expiration of the Affordable Housing Covenant."
7. Deletion of Exhibit F. Exhibit F to the DDA (Ground Lease Terms) is hereby deleted.
8. Replacement of Form of Grant Deed (Exhibit Q. Exhibit C (Grant Deed) to the DDA is
hereby deleted and replaced with Exhibit C-1 attached hereto and incorporated herein.
9. Ratification of DDA. The DDA, as amended by this First Amendment, is hereby ratified,
confirmed and approved in all respects. In the event of any inconsistency between the provisions
of this First Amendment and the provisions of the DDA, the provisions of this First Amendment
shall govern.
10. Entire Agreement. This First Amendment sets forth the entire understanding of the
parties in connection with the subject matter hereof. There are no agreements between City and
Developer relating to the Housing Property or Garage Property other than those set forth in
writing and signed by the parties. Neither party hereto has relied upon any understanding,
representation or warranty not set forth herein, either oral or written, as an inducement to enter
into this First Amendment.
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IN WITNESS WHEREOF, this First Amendment has been entered into by and between
Developer and City as of the date and year first written above.
CITY:
City of Burlingame, a California municipal
corporation
Lisa K. Goldman, City Manager
ATTEST:
Meaghan Hassel -Shearer, City Clerk
APPROVED AS TO FORM:
Kathleen A. Kane, City Attorney
DEVELOPER:
Pacific West Communities, Inc., a Idaho
corporation
Caleb Roope
Its: President and CEO
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EXHIBIT C-1
RECORDING REQUESTED BY AND
AFTER RECORDATION MAIL TO:
Pacific West Communities, Inc.
430 E. State Street, Suite 100
Eagle, Idaho 83616 Attention:
Caleb Roope, [Title]
This document is exempt from the payment of a
recording fee pursuant to Government Code §§
6103, 27383
(Space Above This Line for Recorder's Use Only)
GRANT DEED (With Covenants and Option to Repurchase)
For valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the City of Burlingame, a California municipal corporation ("Grantor"), hereby grants to
[Developer Name], a California [type of entity] ("Grantee"), the real property (the "Property")
located in the City of Burlingame, County of San Mateo, California, and more particularly
described in Attachment No. 1 attached hereto and incorporated in this grant deed ("Grant
Deed") by reference.
Grantee expressly covenants and agrees for itself, its successors and assigns and all
persons claiming under or through it, that as to the Property and any improvements constructed
or to be constructed thereon, or any part thereof, or alterations or changes thereto, Grantee and
all such successors and assigns and all persons claiming under or through it, shall own, transfer,
use, devote, operate and maintain the Property and the improvements thereon, and every part
thereof, to the uses specified and in accordance with and subject to the terms of that certain
Disposition and Development Agreement between Grantor and Grantee dated as of July 13,
2016, as amended by the First Amendment to Disposition and Development Agreement dated
July _, 2019 (collectively, the "DDA"), and the agreements, option to repurchase and covenants
set forth in this Grant Deed. Capitalized terms used but not otherwise defined herein shall have
the meanings provided in the DDA.
It is intended and agreed that the covenants and agreements, including Grantor option to
repurchase, set forth in this Grant Deed shall be covenants running with the land and that they
shall be, in any event and without regard to technical classification or designation, legal or
otherwise, to the fullest extent permitted by law and equity, (i) binding for the benefit and in
favor of Grantor, its successors and assigns, as beneficiary for the entire period during which
such covenants shall be in force and effect, without regard to whether the Grantor is or remains
an owner of any land or interest therein to which such covenants relate; and (ii) binding against
Grantee, its successors and assigns to or of the Property and any improvements thereon or any
part thereof or any interest therein, and any party in possession or occupancy of the Property or
the improvements thereon or any part thereof. The agreements and covenants herein, including
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Grantor option to repurchase, shall be binding on Grantee itself, each successor in interest or
assign, and each party in possession or occupancy, respectively, only for such period as it shall
have title to or an interest in or possession or occupancy of the Property or part thereof. The
Grantor and such aforementioned parties, in the event of any breach of any such covenants or
exercise by Grantor of its option to repurchase, shall have the right to exercise all of the rights
and remedies, and to maintain any actions at law or suits in equity or other proper proceedings to
enforce the curing of such breach or to enforce the option to repurchase. The covenants
contained in this Grant Deed, including the option to repurchase, shall be for the benefit of and
shall be enforceable only by the Grantor, its successors and assigns and such aforementioned
parties.
No violation or breach of the covenants, conditions, restrictions, provisions or limitations
contained in this Grant Deed or the DDA shall defeat or render invalid or in any way impair the
lien or charge of any mortgage, deed of trust or other financing or security instrument
encumbering the Property as permitted by the DDA; provided, however, that any successor of
Grantee to the Property shall be bound by such covenants, conditions, restrictions, limitations
and provisions, whether such successor's title was acquired by foreclosure, deed in lieu of
foreclosure, trustee's sale or otherwise.
Grantee hereby grants to Grantor two options to repurchase the Property hereby conveyed
by Grantor and all improvements subsequently constructed thereon as follows:
A. The first option to repurchase shall be applicable until such time as Developer
achieves Final Completion of the Housing Development and the terms of such option to
repurchase shall be as set forth in Section 5.4 of the DDA, which provisions are incorporated
herein by this reference thereto. Anything herein to the contrary notwithstanding, the Grantor's
rights and interests under Section 5.4 of the DDA, and the Grantee's obligations under Section
5.4 of the DDA, shall terminate as to the Property upon Final Completion of the Housing
Development as evidenced by the issuance of a certificate of occupancy by City. Upon Final
Completion of the Housing Development, the Grantor shall have no further right to enforce any
repurchase rights under Section 5.4 of the DDA with respect to the Property.
B.. The second option to repurchase the Property and all improvements thereon may
be exercised by Grantor at the expiration of the Affordable Housing Covenant by Grantor
forgiving any unpaid balance on the Promissory Note provided to Grantor at the time of
Grantee's purchase of the Property or, if the loan evidenced by such Promissory Note has been
repaid by Grantee in full, Grantor may repurchase the Property at the expiration of the
Affordable Housing Covenant for the then appraised fair market value of the Property, including
improvements thereon, based on the continuing use of such property and improvements as an
affordable housing development with levels of affordability consistent with those set forth in the
Affordable Housing Covenant. Such right to repurchase shall be subordinate and subject to and
be limited by and shall not defeat, render invalid or limit: (i) any mortgage, deed of trust
(including, without limitation, any assignment of rents and leases) or other security instrument
encumbering the Property made by an Institutional Lender (defined below); or (ii) any rights or
interests provided in the DDA for the protection of the holder of such mortgages, deeds of trust
or other security instruments. As used herein "Institutional Lender" means any one or more of
the following, who is not an affiliate of Grantee or any successor to Grantee: a savings bank, a
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savings and loan association, a commercial bank or trust company or branch thereof, an
insurance company, a governmental agency, a real estate investment trust, an employees'
welfare, benefit, pension or retirement fund or system, or an investment banking, merchant
banking or brokerage firm. Grantor shall provide notice to Grantee of its intent to exercise its
repurchase option under this provision at least one hundred eighty (180) days prior to the
expiration of the Affordable Housing Covenant.
By its execution of this Grant Deed, Grantee has acknowledged and accepted the
provisions hereof.
In the event of any express conflict between this Grant Deed and the DDA, then the
provisions of this Grant Deed shall control.
This Grant Deed may be executed in counterparts, each of which shall be deemed an
original and all of which taken together shall constitute one and the same instrument.
SIGNATURES ON FOLLOWING PAGE.
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GRANTOR:
City of Burlingame, a California municipal
corporation
Date: , 202_ By:
ATTEST:
Meaghan Hassel -Shearer, City Clerk
APPROVED AS TO FORM:
Kathleen A. Kane, City Attorney
Lisa K. Goldman, City Manager
[SIGNATURE MUST BE NOTARIZED]
GRANTEE:
[Developer Name], a California [type of entity]
Date: , 202_ By:
Caleb Roope, Its [Title]
[SIGNATURE MUST BE NOTARIZED]
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NO TA R Y A CKNO WL ED GMENTS
[to be inserted]
OAK #4834-6531-6763 v6 ACKNOWLEDGMENT
ATTACHMENT NO. 1
LEGAL DESCRIPTION - HOUSING PROPERTY
TO BE INSERTED
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