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Report regarding a resolution of the Successor Agency to the Redevelopment Agency of the City of South San Francisco, reviewing and approving a Recognized Obligation Payment Schedule and Administrative Budget for fiscal year 2026-27 (Drew Corbett, Interim Finance Director)
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RECOMMENDATION
Recommendation
It is recommended that the Successor Agency to the Redevelopment Agency of the City of South San Francisco (“Successor Agency”) adopt a resolution approving the Recognized Obligation Payment Schedule and Administrative Budget for Fiscal Year 2026-27 as required by State law.
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BACKGROUND/DISCUSSION
The State Legislature dissolved all California redevelopment agencies in 2012. The Successor Agency is responsible for winding down the affairs of the former Redevelopment Agency of the City of South San Francisco (“RDA”). This includes completing projects that were under contract with the RDA prior to dissolution.
State law requires successor agencies to request funding for obligations on an annual basis. The Recognized Obligation Payment Schedule 26-27 (“ROPS 26-27”) requests funding for Fiscal Year 2026-27. The Successor Agency must adopt an Administrative Budget for the same time period.
Enforceable obligations are funded by property tax revenues from former redevelopment project areas and other sources, such as repayments of loans issued by the RDA. Funds that are not committed on the ROPS are distributed to taxing agencies that serve former redevelopment project areas such as the City, County, schools, and special districts.
The ROPS must be approved by the San Mateo Countywide Oversight Board (“Oversight Board”) and California Department of Finance (“DOF”). The Oversight Board will consider the ROPS 26-27 on January 5, 2026. The ROPS must be submitted to DOF by February 1, 2026, who will make a determination by April 15, 2026. If the ROPS is not submitted to DOF on time, the City and Successor Agency could be subject to a civil penalty of $10,000 per day.
Discussion
The ROPS 26-27 requests $94,470 to fund the following obligations:
• Items 12-14 - Oyster Point Project DDA - The Successor Agency administers a Disposition and Development Agreement (“DDA”) dated March 23, 2011, between the RDA, City, and Oyster Point Ventures, LLC, which was ultimately assigned and assumed by the current developer KR Oyster Point / KR-TRS (“Kilroy” or “developer”). The RDA negotiated the DDA to redevelop a former landfill into a life science workplace known as Oyster Point. The Successor Agency is responsible for certain costs related to environmental remediation and construction.
ROPS Item 12 relating to Oyster Point development costs requests no funding this period. The Successor Agency anticipates that funding received in prior years will cover remaining DDA obligations, except as discussed in this report.
The City completed construction of Oyster Point Phase 2C landscape improvements Fall of 2025. Improvements included repaving of the upper parking lot and roadway, installation of new accessible pathways, widening and resurfacing of the Bay Trail, new landscape planting and irrigation, energy efficient lighting, picnic areas, fitness equipment, and a dedicated dog area.
Future work includes installation of a new pump station for the Oyster Point Marina area. The pump station is currently in design, with construction anticipated from April 2026 through June 2027.
The Successor Agency is responsible for funding this work under Sections 3.4.1 and Exhibit 3.4.1 of the DDA. While the Successor Agency anticipates that prior ROPS funding will cover remaining obligations, it is possible that additional funding will be necessary in the future if there are unforeseen circumstances that increase costs. If this occurs, the Successor Agency will request funding on future ROPS.
ROPS Item 13 relates to the Successor Agency’s indemnification obligation under Section 5.2 of the DDA due to potential exposure arising from former solid waste landfill. No funds are requested this period.
ROPS Item 14 requests $94,470 for project-related staff, consultant, and legal costs to implement the Oyster Point project. This includes reimbursing the City for time the Public Works Director, City Manager, and other staff spend administering the project as detailed in Exhibit A. The costs are estimated based on average hours per month.
Taxing Agency Benefit from Oyster Point
The Successor Agency’s investment in the Oyster Point project will result in a significant increase in annual property tax revenues by adding over $2 billion in estimated new development value. On the Fiscal Year 2025-26 property tax bills, the properties had a secured value of over $1.7 billion, resulting in over $17.4 million in annual property tax revenue, compared to $840,000 in annual property tax revenues in 2011. Values are expected to increase as the project continues to be developed. Assuming 2% growth in annual assessed values, taxing agencies will benefit from over $860 million in estimated property tax revenues between 2026 and 2054.
• Item 48 - Administrative Cost Allowance - The Successor Agency requests $0 for Fiscal Year 2026-27 administrative expenses, which is further explained in the next section.
• Other Enforceable Obligations - ROPS Items 16 and 17 are related to an agreement with the San Mateo County Harbor District for dock improvements. There are no anticipated Successor Agency costs in Fiscal Year 2026-27. These obligations remain listed on the ROPS in case there are eligible costs in the future.
Administrative Budget
Health and Safety Code Section 34177(j) requires the Successor Agency to prepare an administrative budget and submit it to the Oversight Board for approval. An Administrative Budget for Fiscal Year 2026-27 is attached as Exhibit B.
Staff has prepared an administrative budget of $0 for Fiscal Year 2026-27. The Dissolution Act sets an Administrative Cost Allowance cap that is generally 50% of non-administrative Redevelopment Property Tax Trust Funds (“RPTTF”) received in the prior fiscal year. The Successor Agency is ineligible for an administrative allowance because it received $0 in non-administrative RPTTF in Fiscal Year 2025-26. All ROPS 25-26 obligations were paid by Other Funds. The City will need to cover administrative costs for Fiscal Year 2026-27 due to this limit.
CONCLUSION
Adoption of the proposed ROPS 26-27 and Administrative Budget is necessary to obtain funding for Fiscal Year 2026-27 obligations and are required by State law.
ASSOCIATED DOCUMENTS
1. Exhibit A - ROPS 26-27
2. Exhibit B - Administrative Budget for FY 26-27
3. Exhibit C - ROPS 26-27 Item 14 Oyster Point Soft Cost Estimate
4. Exhibit D - Resolution Adopting the ROPS 26-27