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Report regarding a Resolution approving Budget Amendment Number 26.036 appropriating $25,294,527.52 in proceeds from the sale of DNA Way, Point San Bruno Boulevard, and a portion of Cabot Road to Genentech. (Sharon Ranals, City Manager)
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RECOMMENDATION
Staff recommends City Council adopt a Resolution approving Budget Amendment Number 26.036 appropriating $25,294,527.52 in proceeds from the sale of DNA Way, Point San Bruno Boulevard, and a portion of Cabot Road to Genentech. Specifically, the associated Resolution appropriates $25 million for the replacement of Fire Station 63, $200,000 for road maintenance, $85,000 to offset the food insecurity gift card program, and $9,527.52 returned to the unassigned General Fund balance.
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BACKGROUND/DISCUSSION
On June 25, 2025, the City Council approved the sale of DNA Way, Point San Bruno Boulevard, and a portion of Cabot Road to Genentech for a purchase price of $25 million. The Purchase and Sale Agreement between the City and Genentech also required Genentech to reimburse the City all expenses associated with preparing the Purchase and Sale Agreement, associated agreements, and completing the sale. This amounted to $94,527.52. Additionally, the Maintenance and Public Access License Agreement required Genentech to prepay for five years of maintenance by the City of the roads sold to Genentech. This amounted to $200,000. Any additional maintenance requested by Genentech and undertaken by the City will be reimbursed on a time and materials basis. The City and Genentech closed escrow on November 21, 2025, and the $25,294,527.52 in sale proceeds were transferred to the City.
Anticipating the receipt of these sale proceeds, staff presented a report to Council at its special meeting on October 29, 2025, regarding potential uses of the sale proceeds. Council directed staff to allocate the sale proceeds to the new Fire Station 63 at 71-73 Camaritas, replacing the existing Fire Station 63 located at 33 Arroyo. And to carve out up to $170,000 to address food insecurity brought about by the delay in SNAP benefits to South San Francisco recipients in early November. As approved by Council at its November 12, 2025, meeting, the food insecurity program costs were limited to $85,000.
FISCAL IMPACT
As discussed above, the sale proceeds total $25,294,527.52 and will be distributed as follows.
• $25,000,000 into Fund 513, the Infrastructure Reserve Fund, and utilized for the new Fire Station 63 (Project Number pf2306). The estimated cost of the new fire station is $37.3 million. To date, $9 million in community benefits fees paid by Lane Partners associated with the Southline development project have been appropriated to the project. Along with the $25 million in proceeds from the sale of DNA Way to Genentech, the project will have $34 million in secured funding, leaving a gap of $3.3 million still to be identified before the anticipated construction commencement in summer 2026.
• $200,000 into Fund 513, the Infrastructure Reserve Fund, for road maintenance as described in the Maintenance and Public Access License Agreement between the City and Genentech.
• $85,000 into Fund 100, the General Fund, to offset the prior appropriation (Budget Amendment Number 26.035) to provide food insecurity relief.
• $9,527.52 into Fund 100, the General Fund, as unassigned fund balance.
This distribution of funds implements Council’s prior guidance as articulated at its October 29, 2025 special meeting, as well as the obligations set forth in the Purchase and Sale Agreement and associated agreements regarding road maintenance.
CONCLUSION
In conclusion, staff recommends that the City Council adopt a Resolution approving Budget Amendment Number 26.036 appropriating $25,294,527.52 in proceeds from the sale of DNA Way, Point San Bruno Boulevard, and a portion of Cabot Road to Genentech. Specifically, the associated Resolution appropriates $25 million for the replacement of Fire Station 63, $200,000 for road maintenance, $85,000 to offset the food insecurity gift card program, and $9,527.52 returned to the unassigned General Fund balance.