Title
Report regarding an update on the SSF PUC Housing Partners project and a resolution accepting the dedication of approximately 15,464 square feet of Kaiser Foundation Health Plan Inc. owned property located on El Camino Real (APN 010-292-210) to the City of South San Francisco for a public purpose. (Nell Selander, Economic and Community Development Deputy Director)
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RECOMMENDATION
Recommendation
Staff recommends that the City Council:
1. Receive an update on the project made on the SSF PUC Housing Partners project; and
2. Adopt a resolution accepting a dedication of approximately 15,464 square feet of Kaiser Foundation Health Plan, Inc. owned property, located on El Camino Real (APN 010-292-210), to the City of South San Francisco.
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BACKGROUND
At the December 11, 2019 City Council Meeting, the City Council of South San Francisco (Council) approved the entitlements for a mixed-use development on a vacant 5.9-acre site, known generally as the “PUC Site”. Council also approved a Purchase and Sale Agreement (PSA), which includes the sale price of $5.5 million for disposition of the property, as well as a Development Agreement (DA). The development partner and buyer, SSF PUC Housing Partners (then known as AGI/KASA and now known as L37/KASA) was selected by Council through an extensive Request for Proposals (RFP) process, in summer 2018.
The project represents an opportunity for the City to achieve its long-standing General Plan and El Camino Real/Chestnut Area Plan planning goals for the area, and to comply with the State policies and regulations that require the site to be developed into high-density housing consistent with adopted zoning. Therefore, the approved entitlements include the following:
• 800 residential units, of which 158 units will be affordable to households earning approximately 30%-80% of the San Mateo County’s Area Median Income (AMI).
• An 8,307 sq. ft. childcare center that can accommodate 70-110 children.
• A 12,992 sq. ft. “market hall” that will provide incubator space for local retail and maker businesses.
• 879 parking spaces (with capacity to add 25 additional spaces, if needed).
• Approximately 1 acre of publically accessible open space that includes: a 38,850 sq. ft. public courtyard, improvements to Centennial Trail, a pedestrian bridge connecting the Kaiser property to Centennial Trail and pedestrian trail connecting Mission Road to Centennial Trail, a series of linked open spaces (e.g., children’s play area, sculpture lawn, adult fitness stations, etc.) that link into Centennial Trail, a picnic area, and a small plaza connected to the Market Hall.
• Construction of Oak Avenue Extension Concept with pedestrian and bicycle access to El Camino Real.
• A Transportation Demand Management (TDM) Plan that requires 35% use of alternative transportation modes (e.g., transit, carpooling, etc.) during peak periods.
• A parking monitoring and management plan to ensure parking compliance.
• Enhanced pedestrian and bicycle improvements.
Once the City approved the entitlements, staff sought approval of the purchase price from the County-wide San Mateo County Oversight Board, in February 2020. The purchase price was accepted and the City of South San Francisco (City) and developer opened escrow. Both the City and developer have been working towards completing the escrow obligations.
This report is intended to: (a) provide an update on current progress by the developer on the project, and (b) request that the City Council accept the dedication of a small parcel of land (approximately 15,464 square feet fronting El Camino Real), which currently is owned by Kaiser Foundation Health Plan, Inc., and which is necessary to complete the development of the project’s approved site plan.
Developer & City Obligations
The key obligations outlined in the PSA and DA and the progress made on these items is outlined below. The developer has also provided the City with a memorandum regarding progress to date, which is included as Attachment 1.
Third Party approvals/rights and Permits/Right of Entry for Oak Ave Phase 1 and Off-Site Improvements. The City is required to gain access (either through easements or acquisitions) to any land needed for the project’s off-site improvements (such as to Centennial Way) or Oak Avenue Phase 1 (including the vehicular connection from Mission Road to Antoinette Lane and the bicycle and pedestrian connection up to El Camino Real). The developer is responsible for funding up to $500,000 for these acquisitions, as well as obtaining any permits needed to build on this additional land. The City and developer have made progress on some aspects of the third party approvals and rights of entry, including the subject of this report - acceptance of the Kaiser parcel.
Collaboration with the City’s Civic Campus team. The developer has worked diligently with the City’s team on complicated technical aspects relating to the two projects. Coordination on various items (such as the alignment of Oak Avenue) are ongoing.
Buyer’s approval of Preliminary Title Report. The developer has objected to two items relating to easements on the Title Report. Resolution of these issues requires extensive coordination with their surveyor and the relevant owners of the easements but the developer is likely to resolve these soon.
FEMA removal of Property from 100 year Floodplain. The developer has been working with FEMA consultants and City Engineering staff to remove both the SSF PUC parcels and the Civic Campus Police Station parcel from the FEMA floodplain.
Affordable Housing Agreement. This has been completed and includes the $2 million City loan that was approved by Council at the December 11, 2020 City Council meeting.
Environmental Remediation Approvals. Have not yet commenced.
Project Permits ready to issue. Construction drawings have not yet been submitted for permits. The developer is working towards completing these and anticipates submitting in spring 2022.
Buyer to secure financing commitments and Construction Loan close. As outlined in their update memo (see attachment) the economic impacts caused by the effects of COVID-19 has slowed overall market rate and commercial development as equity partners have begun to protect their capital in this time of uncertainty. Securing financing will take a little longer than expected since the developer and financing partners are waiting for more market certainty.
Force Majeure Delay
As mentioned above, the effects of COVID-19 has slowed the development of market-rate and commercial development. Almost all the developers that the City has agreements with have invoked their force majeure delay in the past year. For most developers this has required an extension to the close of escrow. SSF PUC Housing partners are requesting a similar extension, which can be approved administratively per the DA/PSA.
It should be noted that the conveyance of the property cannot extend beyond December 31, 2022 due to the recently amended State Surplus Land Act (SLA). If the property is not conveyed by this deadline, the property would then be subject to the Surplus Land Act, requiring the City to terminate the agreement with the developer, adopt a resolution declaring the property as surplus land, and then offering it for sale first to affordable housing providers, other government agencies, and parks and conservation organizations.
City staff and the developer are working closely together to ensure that the December 31, 2022 deadline is met despite the force majeure delay.
DISCUSSION
As noted above, the City is required - as part of the DA and PSA for the PUC project - to gain access to land needed for off-site improvements and Oak Avenue Phase 1. The acquisition of the Kaiser Foundation Health Plan Inc. (“Kaiser”) parcel, the subject of the associated resolution, is a key component in the Oak Avenue Phase 1 improvements. Over the past two years, City staff has been working with Kaiser staff to facilitate this land donation.
Kaiser is willing to irrevocably dedicate a 15,464 square feet portion of their property (“Subject Site”), located on El Camino Real, to the City of South San Francisco (“City”) for use in the future Oak Avenue extension, see Attachment 2. The Subject Site is defined more precisely in the land survey included as part of Exhibit A to the associated resolution.
Oak Avenue Extension Concept
The City and the developer L37 are pursuing the development of a phased coordination for the construction of the Oak Avenue Extension. In Phase I and constructed as part of the initial project, Oak Avenue extends over Colma Creek, connects to Antoinette Lane and terminates into a shared street with a wide staircase and accessible switchback path that traverses up the bank to El Camino Real. The improved pedestrian and bicycle circulation of the site would integrate connections between the new housing, commercial zones, the new Community Civic Campus, SSF BART and Orange Memorial Park to the south. Phase II, with preliminary designs included in the plan set, would construct a complete road linking El Camino Real with Oak Avenue through the PUC Site but is not proposed for initial construction. The dedication of the subject property proposed by Kaiser would facilitate the Oak Avenue Extension project.
California Government Code § 65402 requires that, as a precondition to any acquisition of real property by dedication, the City’s Planning Commission must make a determination that the location, purpose and extent of the proposed disposition is in conformity with the City’s General Plan.
General Plan Designation
In 2011, the City adopted the El Camino Real/Chestnut Avenue Area Plan, which establishes general plan designations, zoning standards, permissible uses, and design standards for the area, including the Kaiser Medical Center. The South San Francisco General Plan classifies the southern portion of the Kaiser site as El Camino Real, Mixed Use North, High Intensity, which is intended to accommodate high-intensity active uses and mixed-use development. Permitted uses include: Retail and department stores; eating and drinking establishments; hotels; commercial recreation; financial, business, and personal services; residential; educational and social services; and office uses. Public uses are permitted in all land use designations in the El Camino Real/Chestnut Avenue Area Plan. Parcel A2b is also designated El Camino Real, Mixed Use North, High Intensity in the General Plan. Therefore the proposed dedication would comply with the existing land use designation and would not require any changes to the land use designation on the subject site.
Long Range Property Management Plan
The City's Long Range Property Management Plan (LRPMP), as approved by the California Department of Finance on October 1, 2015, outlines the permissible uses for the various former Redevelopment Agency's properties. The LRPMP establishes that the properties located on the former San Francisco Public Utilities Commission property is designated for a mix of residential, office, open space, commercial, and public uses.
General Plan Conformity Finding
Staff has concluded that the location, purpose and extent of the proposed dedication of a 15,464 square feet section of Kaiser Foundation Health Plan Inc. is in conformity with the City’s General Plan because:
• The General Plan land use designation for the subject site is El Camino Real, Mixed Use North, High Intensity, which supports a mixture of commercial, office, residential, open space, and public uses;
• The subject site would be merged with the adjacent parcel (A2b) that has the same General Plan land use classification, which supports a mixture of commercial, office, residential, open space, and public uses; and,
• The purpose of the dedication of this property is to facilitate the development of a Community Civic Campus project in accordance with the intent of the General Plan land use designation and the Long Range Property Management Plan.
On January 21, 2021, the City of South San Francisco Planning Commission adopted a Resolution determining the dedication of the Kaiser property conforms with the City’s adopted General Plan in accordance with Government Code Section 65402.
FISCAL IMPACT
The proposed dedication of the Subject Site from Kaiser to the City of South San Francisco will have no fiscal impact on the City’s General Fund.
CONCLUSION
The purpose of the dedication of the Kaiser-owned Subject Site to the City is to facilitate the development of the PUC project and meet the City’s obligations as detailed in the DA and PSA for the project. The Irrevocable Offer does not require the City to purchase the property from Kaiser. Staff recommends that the City Council adopt a resolution accepting the dedication of approximately 15,464 square feet of Kaiser Foundation Health Plan, Inc. property, located on El Camino Real (APN 010-292-210), to the City of South San Francisco.
Attachments:
1. SSF PUC Partners Project Update Memorandum
2. Location Map
3. Presentation