DEPARTMENT Real Estate Services Division AGENDA NO. 9g
MEETING DATE September 13, 2022
APPROVAL:
COMMISSION
SECRETARY
Donna Hood
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Real Estate Agreement: Consent Calendar
Real Estate Director: Rosanna Russell
Project Manager: Molly Petrick
Approve and Recommend the Acceptance of a Facilities Easement Deed at 432-440 Natoma Street in San Francisco from FC 5M M2 Exchange, LLC
Summary of
Proposed
Commission Action:
Approve the terms and conditions of a Facilities Easement Deed encumbering portions of Block 3725, Lot 127, located at 432-440 Natoma Street in San Francisco; and recommend that the City’s Director of Property accept and execute the Certificate of A cceptance for the Facility Easement Deed.
Background: FC 5M M2 Exchange, LLC (Developer), as successor to 5M Project, LLC, is currently constructing the mixed-use 5M Project (Project) in San Francisco in accordance with the 2015 Development Agreement between the City and County of San Francisco (City) and 5M Project, LLC.
The Project is located on a four-acre site located between Mission, Fifth, and Howard Streets and consists of approximately 688 housing units , a 630,000 square-foot commercial office building, and approximately 49,000 square feet of privately owned and publicly accessible open space. The approximately 49,000 square -foot open space includes a 14,600 square foot park identified as t he “Mary Court West Op en Space” (Park) located on Mary Street between Minna and Natoma Streets.
The Developer constructed two public streetlights on Mary Street that were subsequently dedicated and granted to the City. The City, through its Public Utilities Commission ( SFPUC), currently operates and maintains the two streetlight facilities within the Park . The Developer constructed the two streetlights within th e public sidewalk portion of Mary Street . D ue to the
narrow width of Mary Street, existing subsurface facilities and specific ADA requirements, the Developer built portions of the SFPUC streetlight foundations and subsurface electrical facilities on approximately 29 square feet of private property (Easement Area) . The SFPUC requires a facility easement in order for SFPUC staff to access and maintain the portions of the Agreement: Approve and Accept Streetlight Facility Easement at 5M.
Commission Meeting Date: September 13, 2022
two streetlight facilities constructed on the private property.
The Developer desires to grant a facility easement to the SFPUC, and the Developer and the SFPUC have negotiate d the terms and condition s of a Facility Easement Deed without any cost to the SFPUC.
Environmental
Review:
Acceptance of an easement deed does not constitute a “project” under the California Environmental Quality Act (CEQA) Guidelines Sectio n 15378(a) because there would be no physical change in the environment . If there is any future ground dist urbing maintenance work, this work would undergo CEQA review.
Result of Inaction: A delay in adopting the attached resolution will delay the approval of the Facility Easement Deed and delay the SFPUC’s ability to legally access and maintain the portions of the streetlight facilities on private property.
Budget & Costs: The SFPUC will not incur any costs resulting from this action.
Description of
Facility Easement to
be Accepted:
The SFPUC will receive a Facility Easement granting the SFPUC the ability to access its subsurface facilities within the Easement Area.
Recommendation: SFPUC staff recommends that the Commission adopt the attached resolution.
Attachment: Facility Easement Deed
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, FC 5M M2 Exchange, LLC (Developer), as successor to 5M Project, LLC , is currently constructing the 5M project (Project) in San Francisco in acc ordance with the 2015 Development Agreement between the City and County of San Francis co (City) and 5M Project, LLC; and
WHEREAS, The Project is located on a four -acre site generally situated between Mission, Fifth and Howard Streets and consists of approx imately 688 housing units, a 630,000 square foot commercial office building, and approximately 49,000 square feet ofprivately owned and publicly accessible open space; and
WHEREAS, The 49,000 square feet of open space for the Project includes a 14,600 square foot park identified as the “Mary Court West Open Space” located on Mary Street between Minna and Natoma Streets; and
WHEREAS, The Developer constructed two public streetlights within the public sidewalk portion of Mary Street that were subsequently dedicated and granted to the City; and WHEREAS, The City, through its Public Utilities Commission (SFPUC), currently operates and maintain s the two streetlight facilities within the Mary Court W est Op en Space area; and
WHEREAS, Due to the narrow width of Mary Street and existing subsurface facilities and specific ADA require ments, the Developer built portions of the SFPUC streetlight foundations and subsurface electrical facilities on approximate ly 29 square feet of private property, which is the area subject to the Facilities Easement Deed; and
WHEREAS, The SFPUC requires a facility easement in order for SFPUC staff to access and maintain the portions of the two streetlight facilities constructed on private property; and
WHEREAS, The Developer desires to grant a facility easement to the SFPUC , and the Developer and the S FPUC have negotiated the terms and conditions of a Facility Easement Deed; and
WHEREAS, Acceptance of an easement deed does not constitute a “project” under the California Environmental Quality Act (CEQA) Guidelines Section 15378(a) because there would be no physical change in the environment , and any future ground dist urbing maintenance work would undergo CEQA review; now, therefore, be it
RESOLVED, That this Commission approves the terms and conditions of the Facility Easement Deed and recommends that the City’s Director of Property accept and execute the Certificate of Acceptance for the Facility Easement Deed; and, be it
FURTHER RESOLVED, That this Commission authorizes the General Man ager to negotiate and recommend that the City’s Director of Property execute any amendments or modifications to the Facility Easement Deed , including, without limitation, modifications , additions, or deletion s of exhibits , and to enter into any related d ocuments, instruments, memoranda, or other agreements reasonably necessary to consummate the transaction contemplated under the Facility Easement Deed , that t he Gen eral Manager determines, in consultation with the City Attorney, are in the best interests o f the City; do not materially increase the liabilities or obligations of the City or materially diminish the benefits to the City; are necessary or advisable to effectuate the purposes and intent of Facility Easement Deed or this Resolution; and comply with all applicable laws, including the City Charter; and, be it FURTHER RESOLVED, That this Commission authorizes the General Manager and/or the City Director of Property to take any and all other steps he or she, in connection with the City Attorney, deems necessary and advisable to effectuate the purpose and intent of this Resolution.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of September 13, 2022.
Secretary, Public Utilities Commission
1 RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:
San Francisco Public Utilities Commission
City and County of San Francisco
525 Golden Gate Avenue, 10th Floor
San Francisco, CA 94102
Attn: Real Estate Director
WITH A CONFORMED COPY TO:
Real Estate Division
City and County of San Francisco
25 Van Ness Avenue, Suite 400
San Francisco, CA 94102
Attn: Director of Property
(Space above for Recorder’s use only)
EASEMENT DEED
(SFPUC Facility Easement)
(Portion of Block 3725, Lot 127)
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, FC 5M M2 Exchange, LLC, a Delaware limited liability company (“Grantor”), hereby grants to the CITY AND COUNTY OF SAN FRANCISCO, a municipal corporation (“City” or “ Grantee”), acting by and through its Public Utilities Commission (“ SFPUC”), a facility easement in, across, and through Grantor’s real property, which is located in San Francisco, California, and described in the legal description attached as Exhibit A (the “ Easement Description”) and depicted on the attached as Exhibit B (the “Easement Area”), which shall be referred to hereinafter as the “Easement.”
1. N ature of Easement . The Easement is a perpetual non-exclusive easement in gross including (a) the right to construct, inspect, install, operate, maintain, repair, restore, remove, replace, alter, expand, and reconstruct, from time to time, at Grantee’s option, within the Easement Area, SFPUC -owned concrete foundations for lighting, streetlight poles, underground electric power facilities and all necessary or desirable substructures, accessories and appurtenances thereto, including, without limitation, wires, fibers, cables, conductors, conduits, switches and vaul ts (collectively, “Grantee’s Facilities”); (b) the right to excavate and to access Grantee’s Facilities from the surface of the ground, with not less than thirty feet (30') of vertical clearance above the surface to permit the installation and removal of Grantee’s Facilities from the surface; (c) the right of ingress to and egress from, for Grantee’s and its representatives’ agents’, employees’, officers’, suppliers’, consultants’, contractors’, and subcontractors’ (collectively, “ Grantee’s Agents”) vehicles and equipment, the Easement Area over the lands of Grantor; (d) the right to a three foot (3’), unobstructed clearance from the streetlight pole, as depicted on Exhibit B , to allow Grantee and Grantee’s Agents sufficient room to repair construct, inspect, install, operate, maintain, repair,
2 restore, remove, replace, alter, expand, and reconstruct Grantee’s Facilities from time to time; and (e) the right to place temporary electrical facilities and equipment aboveground when needed in connection with any emergency or repair work, as needed to maintain continuous street lighting service (provided that any such temporary above-ground electrical facilities or equipment shall be maintained only so long as needed to address the emergency or perform the repair work). The Easement Area is a portion of Grantor’s real property, as described in the legal description attached to this Agreement as Exhibit C (the “Property”).
2. Grantor’s Reserved Rights. Grantor, on behalf of itself, its agents, contractors, subcontractors, suppliers, consultants, employees, invitees or other authorized persons acting for or on behalf of Grantor, including, but not limited to , any lessee and its tenants (collectively, “Grantor’s Agents”), reserves the right to use the Property and the Easement Area, in any way not inconsistent with the above grant of Easement, subject to the following:
a. Grantor shall not use the Easement Area or permit the same to be used for any purpose or in any manner that will interfere with the proper use, function, maintenance, repair, replacement of, or access to any of Grantee’s Facilities. b. Grantor shall not use the Easement Area for the erection of any improvement that will damage, interfere with, or endanger the proper use, function, maintenance, repair or replacement of any of Grantee’s Facilities without the prior written authorization of the SFPUC General Manager (the “General Manager”).
c. In the event that Grantor elects to construct and maintain fences on or around the Easement Area, Grantor shall provide for Grantee’s immediate right of access to the Easement Area without prior notice or authorization to Grantor. Fence design, location, and construction method for any fence that Grantor locates on or over Grantee’s Facilities shall require the General Manager’s prior written consent.
d. Grantor may plant low shrubs in the Easement Area, provided that their roots or underground growth shall not have the potential to damage Grantee’s Facilities. Grantor shall not plant trees or plants with invasive roots in the Easement Area except in movable planters. e. Grantor shall not cause or allow any structures of any kind to be constructed, placed or maintained on, over, under, along, within, or across the Easement Area. f. No excavation, grading, installation of improvements or any activity that has the potential to compromise the integrity of the concrete foundation or the stability of the light pole shall occur on the E asement Area without the prior written consent of the City. Upon completion of any approved excavation, grading, installation of improvements within or around the Easement Area (including, but not limited to, any Major Work or Ordinary Maintenance and Repair) by Grantor, Grantor shall, at its cost, backfill the excavation and restore the surface as follows: Where the disturbed surface area is paved, Grantor shall restore the surface area with the same paving treatment that existed prior to the excavation (e.g., City-standard concrete or pavers as applicable).
g. Grantor shall indemnify, defend (with counsel reasonably approved by Grantee and Grantee’s Agents), and hold Grant ee harmless from and against any cost, expense,
3 liability, damage to property or injury or death of any person caused by Grantor’s negligence or willful misconduct (or that of Grantor’s Agents) in the observation or performance of any terms, covenants, or conditions contained herein to be observed or performed by Grant or, hereunder.
Notwithstanding anything herein to the contrary, this Section 2(g) shall survive the expiration and termination of this Easement
h. The Grantee’s Facilities that are located underground require a minimum 18” depth of cover. Grantor must not decrease the depth of cover over the Grantee’s Facilities that are located underground.
i. Grantor shall not allow any portion of the Easement Area to be designated as the sole accessible path of travel through the Property or as the sole accessible ingress or egress from any adjacent property.
3. Grantee’s Use of the Easement.
a. Grantee’s rights under this Deed may be exercised by Grantee’s Agents. b. Grantee will own Grantee’s Facilities installed in the Easement Area and will bear all responsibility to operate, maintain and repair the same at its sole cost, except to the extent any damage or cost is caused or necessitated by Grantor or Grantor’s Agents, in which case Grantor shall bear such proportional cost and repair or pay for such damage, at Grantee’s discretion. Grantee may elect to repair such damage at Grantor’s cost, or may elect to witness Grantor’s repair work. Any cost incurred by the Grantee that is caused or necessitated by Grantor or Grantor’s Agents shall be invoiced to Grantor within twelve (12) months of the date the cost is incurred. Grantor shall remit payment to the Grantee within sixty (60) days of receiving an invoice. c. Prior to commencing any Major Work, as defined below, Grantee shall provide Grantor with at least sixty (60) days ’ prior written notice. Prior to commencing any Ordinary Maintenance and Repair, as defined below, that requires excavation in the Easement Area, Grantee will provide Grantor with at least fifteen (15) days’ prior written notice.
Notwithstanding the foreg oing, in the event of an emergency, Grantee shall not be obligated to provide Grantor with any notice. The term “Major Work” means work in the Easement Area that cannot be reasonably expected to be completed within three (3) consecutive days. The term “Ordinary Maintenance and Repair” means work in the Easement Area that can be reasonably expected to be completed within three (3) consecutive days. d. In undertaking work within the Easement Area, Grantee shall use reasonable efforts to (i) complete all construction, maintenance or repair activities in an expeditious and diligent manner; and (ii) minimize disruption to Grantor’s use of Grantor’s land adjoining the Easement Area. Grantee shall not be liable in any manner, and Grantor hereby waives any claims, for any inconvenience, disturbance, loss of business, nuisance or other damage arising out of Grantee’s entry onto or use of the Easement Area, except to the extent resulting directly from the gross negligence or willful misconduct of Grantee or its contractors or agents, or Grantee’s breach of its covenants in this Deed.
e. Upon completion of any construction, maintenance or repair involving excavation within or around the Easement Area (including, but not limited to, any Major Work or
4 Ordinary Maintenance and Repair) by Grantee, Grantee shall, at its cost, backfill the excavation and restore the surface in accordance with the terms of this Section. Where the disturbed surface area is paved with concrete, Grantee shall restore the area with three -inch (3") thick Portland cement concrete or its cost equivalent. Where the disturbed surface area is paved with pavers or other enhanced paving treatment, Grantee will coordinate with Grantor to allow for Grantor to restore the enhanced paving treatment; provided, however, that if Grantor fails to respond within three (3) business days or to complete such restoration within ten (10) business days, Grantee will restore the area with three- inch (3”) thick asphalt. Grantee shall not be liable for damage to, or required to restore, any other improvements or vegetation within the Easement Area. Grantee shall not be responsible for the cost of removing, restoring or replacing any improvements previously installed by Grantor pursuant to the General Manager’s authorization a s described in Section 2 (Grantor’s Reserved Rights) above . In an emergency, Grantee may remove any such improvements without notice, liability, or obligation to replace the same. In a non -emergency, Grantee shall provide a minimum of ten (10) business d ays’ notice to Grantor to remove such improvements prior to Grantee commencing work within the Easement Area. f. Notwithstanding the foregoing subsection 3(e) above, or any contrary provision contained herein, Grantee may remove any improvements that may damage or interfere with Grantee’s Facilities or impede access thereto without any notice, liability, or obligation to replace the same. The foregoing sentence shall not apply to any improvements constructed pursuant to improvement plans previously reviewed and approved by Grantee. g. Grantee shall indemnify, defend (with counsel reasonably approved by Grantor and Grantor’s Agents), and hold Grantor harmless from and against any cost, expense, liability, damage or injury to property or persons caused by Grantee’s negligence or willful misconduct (or that of Grantee’s Agents) in the exercise of the rights granted to, or reserved by, Grantee, hereunder. Notwithstanding anything herein to the contrary, this Section 3(g) shall survive the expiration and termination of this Easement.
4. Restoration. If the surface of the Easement Area is disturbed by Grantee’s use of the Easement, Grantee shall , at Grantor’s election, restore the surface to Base Conditions or the cost equivalent. “Base Conditions” is defined as three-inch (3”) thick Portland cement concrete, for areas paved with City-standard concrete, and three-inch (3”) thick asphalt for areas paved with pavers or other enhanced hardscape. Special finishes, structures, and surface improvements (including irrigation lines) removed or damaged in connection with Grantee’s activities performed in accordance with the terms of this Easement will not be replaced by Grantee. Grantee shall not be held liable for any damage to plants, vegetation or any other surface improvement aside from Base Conditions or the cost equivalent in the Easement Area that may occur as a result of Grantee’s activities performed in accordance with the terms of this Easement.
5. C
ondition of Easement Area . Grantee accepts its rights in the Easement Area in its current “as is” condition without any warranty (express or implied) by Grantor. Grantor and Grantee shall conduct all of their respective activities within the Easement Area in a manner such that the Easement Area remains in a good, safe condition.
6. N
otices, Demands and Communications. Whenever any notice or any other communication is required or permitted to be given under any provision of this Deed (as, for
5 example, where a party is permitted or required to “notify” the other party), such notice or other communication shall be in writing, signed by or on behalf of the party giving the notice or other communication, and shall be deemed to have been given on the earliest to occur of (i) the date of the actual delivery, or (ii) if mailed, on the delivery date shown on the return receipt, in each case to the respective address(es) of the party to whom such notice is to be given as set forth below, or at such other address of which such party shall have given notice to the other party as provided in this Section 5. Legal counsel for any party may give notice on behalf of such party.
If to Grantor, to: FC 5M M2 Exchange, LLC
430 Natoma Street
San Francisco, CA 94103
Attn: Swathi Bonda
with a copy to
Perkins Coie, LLP
505 Howard Street, Suite 1000
San Francisco, CA 94105
Attn: Garrett Colli
If to City, to: San Francisco Public Utilities Commission General Manager
525 Golden Gate Avenue, 13th Floor
San Francisco, California 94102
with a copy to:
and with a copy to:
San Francisco Public Utilities Commission
Real Estate Services Division
525 Golden Gate Avenue, 10th Floor
San Francisco, California 94102
Attn: Real Estate Director
Office of the City Attorney
City Hall, Room 234
1 Dr. Carlton R. Goodlett Place
San Francisco, California 94102
Attn: Real Estate/Finance Team
7. Abandonment of Easement. Grantee may, at its sole option, abandon the Easement by recording a quitclaim deed. Except as otherwise provided in this Deed, upon recording such quitclaim deed, the Easement and all rights, duties and liabilities hereunder sha ll be terminated and of no further force or effect. No temporary nonuse of the Easement Area or other conduct, except for recordation of the quitclaim deed as provided in this Section shall be deemed abandonment of the Easement.
8. E
xhibits . The exhibits referenced in and attached to this Deed are incorporated into and made a part of this Deed.
6 9. Runs with the Land. The conditions and covenants contained in this Deed shall run with the land, burden the Easement Area and be binding on and inure to the benefit of Grantor and Grantee and their respective agents, successors and assigns unless earlier terminated by written agreement of the parties or their respective successors and assigns.
10. Counterpart Signatures. This instrument may be executed in counterparts, each of which shall be an original, but all of which together shall constitute one instrument. [Continued]
Signature Page to-
Easement Deed (Block 3725 Lot 127)
7 Executed as of this __________ day of ____________, 2022.
GRANTOR:
FC 5M M2 Exchange, LLC,
a Delaware limited liability company
By: ______________
Name: ______________
Title: ______________
8 NOTARY ACKNOWLEDGMENT
State of California )
) ss
County of San Francisco )
On ________________, before me, _______________________________, a notary public in and for said State, personally appeared ___________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature ________________________ (Seal)
EXHIBIT A
Description of Easement Area
EXHIBIT B
Plat of Easement Area
EXHIBIT C
Description of Grantor’s Property
Lots 2, B and C, as shown and delineated on the Final Map 10101, filed December 23, 2019, in Book 138 of Condominium
Maps, Pages 27-29.
APN: Lots 125, 126, 127, Block 3725
CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed by this Easement Deed , dated __________________, 202_, to the City and County of San Francisco, a municipal corporation, is hereby accepted pursuant to Board of Supervisors’ Resolution No. 18110, approved August 5, 1957, and the Grantee consents to recordation thereof by its duly authorized officer.
Dated: ____________, 20___
CITY AND COUNTY OF SAN
FRANCISCO,
a municipal corporation
By: ____________________________
Andrico Q. Penick
Director of Property
RECOMMENDED by San Francisco
Public Utilities Commission
By: ____________________________
Dennis J. Herrera
General Manager
APPROVED AS TO FORM:
DAVID CHIU, City Attorney
By: ____________________________
Vincent L. Brown
Deputy City Attorney
DESCRIPTION CHECKED/APPROVED:
By: ____________________________
_________________
_________________