CONTRACT/AGREEMENT APPROVAL FORM
Date:
Name of Contract/Agreement
Originating Department/Responsible Person, ext.
Vendor
Routing Instructions:
TYPE OF CONTRACT:
Have there been any changes to the Contract Template? No Yes CONTRACT AMOUNTS:
APPROVAL AUTHORITY:
INSURANCE REQUIREMENTS:
Waivers requested No Yes (If Yes, Route to Risk Manager for signature first) BUDGETARY: Included in Budget (Simpler report attached showing amounts) Amount Project String Accounting String
ATTACHMENTS:
Agreement and all Exhibits Resolution (all contracts over $150k) SIR Questionnaire Certificate of Insurance, naming City of South San Francisco as an Additional Insured DEPARTMENT HEAD ACKNOWLEDGEMENT: _____________________________________________________ The contract, amendments, exhibits, insurance requirements/waivers and attachments have been reviewed and included.
RISK MANAGER APPROVAL OF INSURANCE WAIVER: ________________________________ CITY ATTORNEY APPROVAL OF ENTIRE AGREEMENT: ________________________________ Comments: _____________________________________________________________________________ _____________________________________________________________________________ _____________________________________________________________________________ Approval of Agreement Approval of Insurance Add Agreement to Contract Tracker ASSISTANT CITY MANAGER’S APPROVAL: _________________________________ (Only if amount is over $25,000)
FINAL APPROVAL: __________________________________
CITY CLERK:
Please attest, keep a copy for your files, and return to Originating Department Please upload to Laserfiche and return to Originating Department COPY SENT TO VENDOR: _______ _____________________
12/20/22 First Amendment to PSA - Ensemble ECD/Ernesto Lucero Ensemble Investments Not Applicable Council City Manager on behalf of Council DocuSign Envelope ID: 5FB47A5D-3B2A-438F-A5B8-8290894D0B9F Amendment
FIRST AMENDMENT TO PURCHASE AND
SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
(367 Marina Boulevard /Assessor's Parcel Number: 015-011-350) This First Amendment to the Purchase And Sale Agreement And Joint Escrow Instructions (this "Amendment") is made and effective as of December , 2022 (“Effective Date”) by and between the City of South San Francisco, a municipal corporation (“Seller”) and Ensemble Investments, LLC, a California limited liability company (“Buyer”). Seller and Buyer are sometimes collectively referred to herein as “the Parties.” Any capitalized terms not defined herein shall have the meaning ascribed to them in the Agreement.
RECITALS
A. Seller and Buyer entered into that certain Purchase And Sale Agreement And Joint Escrow Instructions dated December 10, 2021, (“Agreement”) with respect to that certain real property located at 367 Marina Boulevard, South San Francisco, California (Assessor’s Parcel Number 015-011-350 [015-010-970 in the Purchase and Sale Agreement, subsequently re-numbered]) (“Property”);
B. The Agreement provides that escrow for conveyance of the Property will close no later than December 31, 2022;
C. The Parties have agreed to extend the deadline for close of escrow as memorialized below.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating all of the above as though set forth in full herein and in consideration of all the recitals, conditions and agreements contained herein, the parties hereby agree as follows, with amendments to the Agreement reflected as additions in double underline and deletions in strikethrough.
1. Section 4.1 Condition of Title/Preliminary Title Report is amended to add the following paragraph:
No earlier than sixty (60) days and no later than thirty (30) days prior to the Closing Date, Seller shall cause the Title Company to update the Preliminary Report. For any new title matters caused or consented to by Seller that are not on the Preliminary Title Report dated October 14, 2021 and are not Permitted Exceptions, such new matters shall be deemed Monetary Liens that Seller shall be obligated to be removed or released from title before the Closing. For any new title matters that are not Permitted Exceptions and are not caused or DocuSign Envelope ID: 5FB47A5D-3B2A-438F-A5B8-8290894D0B9F 20, 2022
THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (367 MARINA BOULEVARD, SOUTH SAN FRANCISCO, CALIFORNIA) consented to by Seller, such new matters shall be deemed Disapproved Exceptions and Seller shall either (i) cause such Disapproved Exceptions to be removed prior to Closing, or (ii) notify Buyer that Seller will not cause Disapproved Exceptions to be cured or removed. Buyer may either (i) notify Seller in writing that it has elected to waive the Disapproved Exceptions and proceed with the purchase contemplated herein, or (ii) terminate this Agreement, whereupon, the Deposits and all interest accrued shall immediately be released by the Escrow Holder and neither Party shall have any further obligation or liability to the other with respect to the transaction contemplated by this Agreement, except for those that expressly survive termination.
Notwithstanding the foregoing, in the event that the Agreement is terminated pursuant to this Section 4.1, the Parties reserve the right to pursue damages and/or claims against the other Party for conduct that occurred prior to the execution of this Amendment. Seller shall also deliver updated estoppel certificates related to exceptions 18 and 19 on the current Preliminary Report dated no earlier than thirty (30) days prior to Closing.
2. Section 4.5(a) “Development Agreement, Preliminary Pro Forma and Project Entitlements” is amended as follows:
Buyer and Seller agree to negotiate diligently and in good faith the terms of the Development Agreement on such terms set forth in the Development Agreement term sheet attached hereto as Exhibit C and such other terms as shall be acceptable to each party in its sole discretion. Buyer and Seller will also work diligently and in good faith to process all discretionary entitlements for the Project concurrently with the negotiation of the Development Agreement. Buyer will use good faith efforts to submit an entitlement application and seek City Council approval of the Development Agreement and all discretionary entitlements for the Project prior to the Closing Date (as defined in Section 5.1 below). Notwithstanding anything else to the contrary, if the Buyer fails to submit a precise plan and associated entitlement application by May 1, 2022, then the Seller, in its sole discretion, may elect to terminate this Agreement and may retain all Deposits paid pursuant to this Agreement. In the event that Seller exercises its right to terminate pursuant to this provision, neither party shall have any further rights or obligations hereunder except those which expressly survive the termination hereof. The Parties acknowledge that the second reading of the ordinance approving the Development Agreement may occur after Closing, in which case the Development Agreement shall be executed and recorded post-Closing. However, if the Development Agreement has been fully approved by the City Council prior to the Closing Date, December 31, 2022, then an executed copy of the Development Agreement will be deposited into escrow and recorded by the San Mateo County recorder concurrently with the Close of Escrow.
DocuSign Envelope ID: 5FB47A5D-3B2A-438F-A5B8-8290894D0B9F
THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (367 MARINA BOULEVARD, SOUTH SAN FRANCISCO, CALIFORNIA)
3. A new Section 4.5(d) is added as follows:
The Parties understand and agree that during the period of January 1, 2023 through the Seller’s completion of the statutory process outlined in Government Code section 54220 et seq, the Parties shall cease all negotiations regarding the disposition of the Property. If completion of the statutory process does not result in the sale of the Property to a third-party who provided a notice of interest to Seller under Government Code section 54220 et seq., then the Parties shall resume negotiations regarding the terms of the Development Agreement under Section 4.5(a) of this Agreement. If the statutory process results in a sale to a third-party, then such sale shall not constitute a breach by Seller and this Agreement shall terminate and the Deposits shall be returned to the Buyer. The Parties waive, release, remise, acquit and forever discharge each other from claims, liability, harm, and/or costs and damages stemming from delay pursuant to the extension of time provided for under this Amendment or from a sale of the Property to a third-party pursuant to the statutory process outlined in Government Code section 54220 et seq.
Notwithstanding the foregoing and regardless of whether this Agreement has been terminated pursuant to this Section 4.5(d), the Parties reserve the right to pursue damages and/or claims against the other Party for conduct unrelated to the statutory process outlined in Government Code section 54220 et seq. that occurred prior to the execution of this Amendment; provided, however, that in the event of a sale of the Property to a third-party pursuant to Government Code section 54220 et seq., if Seller reimburses Buyer for all of Buyer’s outof-pocket costs actually incurred in connection with Buyer’s pursuit of the Project after the Effective Date of the Agreement (i.e., December 10, 2021), including but not limited to Buyer’s due diligence evaluation, and Buyer’s pursuit of Project entitlements, as substantiated by Buyer with reasonable documentation, then Buyer shall waive, release, remise, acquit and forever discharge Seller from any and all claims, liability, harm, and/or costs and damages arising under the Agreement, whether such claims accrued before or after execution of this Amendment. This Section 4.5(d) shall survive the termination of this Agreement.
4. Section 5.1 is Amended as follows:
Closing. The escrow for conveyance of the Property shall close ("Close of Escrow" or "Closing") within thirty (30) days after the satisfaction, or waiver by the appropriate Party, of all of the Buyer's Closing Conditions (as defined in Section 5.2 below) and all of the Seller's Closing Conditions (as defined in Section 5.3 below), which shall occur no later than six (6) months after the Seller concludes the statutory process outlined in Government Code section 54220 et seq. (where such statutory process does not result in a sale of the Property to a third-party) December 31, 2022, or such earlier date that Buyer may specify to Seller with thirty (30) days prior written notice (the "Closing DocuSign Envelope ID: 5FB47A5D-3B2A-438F-A5B8-8290894D0B9F
THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (367 MARINA BOULEVARD, SOUTH SAN FRANCISCO, CALIFORNIA) Date"). Upon Buyer’s written request, Seller may grant an extension of the Closing Date by an additional three (3) months.
5. Section 5.3(k) is Amended as follows:
Seller has approved all discretionary entitlements for the Project, including the first reading of an ordinance approving a Development Agreement.
Buyer will deliver or complete items ( c ), ( d), ( e ), (t) and (g) at least seven (7) business days prior to Closing. If any of the Seller's Closing Conditions shall not have been satisfied on or before the Closing Date as a result of a breach or default by Buyer, then Seller shall have its rights under Section 7.2.
Notwithstanding the foregoing or anything contained herein to the contrary, if Buyer has failed to satisfy the condition contained in Section 5.3( e) above by the date specified by BCDC or if Seller's Closing Conditions have not otherwise been satisfied on or before December 31, 2022 the Closing Date, the Seller may, in its sole discretion, immediately terminate this Agreement.
For the avoidance of doubt, the Parties acknowledge that the second reading of the ordinance approving the Development Agreement may occur after Closing, in which case the Development Agreement shall be executed and recorded post-Closing. However, if the Development Agreement has been fully approved by the City Council prior to the Closing Date December 31, 2022, then an executed copy of the Development Agreement will be deposited into escrow and recorded concurrently with the Close of Escrow.
6. Section 7.1 is Amended as follows:
In the event of a breach or default under this Agreement by Seller, which is not cured within ten (10) days (such longer period as may be reasonably required to cure such default) after written notice, if such breach or default occurs prior to Close of Escrow, Buyer reserves the right to either (a) seek specific performance from Seller or (b) to do any of the following: (i) to waive the breach or default and proceed to close as provided herein; (ii) to extend the time for performance until Seller is able to perform with the understanding that such extension cannot extend beyond the Closing Date December 31, 2022; or (iii) to terminate this Agreement upon written notice to Seller, whereupon Seller shall cause Escrow Holder to return to Buyer any and all sums placed into the Escrow by Buyer (including the Deposits), reserving all other rights and remedies available to it under this Agreement or otherwise at law or in equity, including the right to collect costs and damages for such breach from Seller.
7. Master Development Schedule contained in Exhibit C is Amended as shown in Attachment 1 Exhibit C-Revised attached hereto and incorporated herein.
DocuSign Envelope ID: 5FB47A5D-3B2A-438F-A5B8-8290894D0B9F
THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (367 MARINA BOULEVARD, SOUTH SAN FRANCISCO, CALIFORNIA)
8. General Provisions. Each party has received independent legal advice from its attorneys with respect to the advisability of executing this Amendment and the meaning of the provisions hereof. The provisions of this Amendment shall be construed as to the fair meaning and not for or against any party based upon any attribution of such party as the sole source of the language in question. Except as expressly amended pursuant to this Amendment, the terms and provisions of the Agreement shall remain unmodified and shall continue in full force and effect, and Buyer and Seller hereby ratify and affirm all their respective rights and obligations under the Agreement. In the event of any conflict between this Amendment and the Agreement, this Amendment shall govern.
The terms and provisions of this Amendment, together with the Agreement, shall constitute all of the terms and provisions to which Buyer and Seller have agreed with respect to the transaction governed hereby, and there are no other terms and provisions, oral or written, that apply to the Agreement and/or the Property other than as set forth in the Agreement as modified by this Amendment. The provisions of this Amendment shall apply to, be binding upon, and inure to the benefit of the parties hereto and to their respective successors and assigns.
9. Counterparts. This Amendment may be executed in multiple counterparts, all of which shall constitute an original, and all of which together shall constitute a single instrument.
Counterparts of this Amendment executed and delivered by facsimile, email or other means of electronic delivery shall constitute originals for all purposes.
SIGNATURES ON FOLLOWING PAGE
DocuSign Envelope ID: 5FB47A5D-3B2A-438F-A5B8-8290894D0B9F
THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (367 MARINA BOULEVARD, SOUTH SAN FRANCISCO, CALIFORNIA) IN WITNESS WHEREOF, the parties have executed this Amendment as of the Effective Date.
SELLER:
CITY OF SOUTH SAN FRANCISCO
By:
Mike Futrell
City Manager
ATTEST:
By:
Rosa Govea Acosta
City Clerk
APPROVED AS TO FORM:
By:
Sky Woodruff
City Attorney
DocuSign Envelope ID: 5FB47A5D-3B2A-438F-A5B8-8290894D0B9F
THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (367 MARINA BOULEVARD, SOUTH SAN FRANCISCO, CALIFORNIA) BUYER:
Ensemble Investments, LLC,
a California corporation
By:
Name:
Title:
5253568.1
DocuSign Envelope ID: 5FB47A5D-3B2A-438F-A5B8-8290894D0B9F Conrad Garner
SVP
THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (367 MARINA BOULEVARD, SOUTH SAN FRANCISCO, CALIFORNIA) Attachment 1
EXHIBIT C-REVISED
Master Development Schedule—Updated December ________, 2022 Activity Milestones
Submit application for Precise Plan No later than May 1, 2022 Receive Development Agreement Approval
(first reading)
No later than 2 weeks prior to Closing Date
December 16, 2022
Receive Entitlement Approval No later than 2 weeks prior to Closing Date December 16, 2022
Closing of Escrow No later than six (6) months after the Seller concludes the statutory process outlined in
Government Code section 54220 et seq or nine
(9) months after such process if Seller elects to
extend pursuant to Section 5.1 December 31,
2022
Submit application for Building Permit No later than 12 months after Closing Date December 31, 2023.
Delivery of Proof of an Approved
Construction Loan from a Reputable Lender
Within 18 months of submitting for Building
Permit, but no later than June 30, 2025.
Delivery of a Final Construction Contract Within 18 months of submitting for Building Permit, but no later than June 30, 2025.
Construction Commences Within 19 months of submitting for building permit, but no later than July 31, 2025.
Substantial Completion of Construction Within 36 months of construction commencement; targeted for September 2027
(26-month schedule), but no later than June
2028 (35-month schedule).
Estimated Opening of hotel Targeted for 2 months after Substantial Completion of Construction November 2027,
but no later than August 2028.
*Note that all target dates are subject to automatic extension for delays due to factors beyond Developer’s reasonable control in accordance with the force majeure provisions of the Development Agreement.
DocuSign Envelope ID: 5FB47A5D-3B2A-438F-A5B8-8290894D0B9F 20, 2022
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5FB47A5D-3B2A-438F-A5B8-8290894D0B9F DocuSign Envelope ID: 5FB47A5D-3B2A-438F-A5B8-8290894D0B9F DocuSign Envelope ID: 5FB47A5D-3B2A-438F-A5B8-8290894D0B9F DocuSign Envelope ID: 5FB47A5D-3B2A-438F-A5B8-8290894D0B9F DocuSign Envelope ID: 5FB47A5D-3B2A-438F-A5B8-8290894D0B9F City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #: 22-1071 Agenda Date: 12/19/2022
Version: 1 Item #: 1a.
Resolution authorizing the City Manager to execute the First Amendment to the Purchase and Sale Agreement with Ensemble Investments, LLC for the disposition of a city-owned property located at 367 Marina Boulevard (APN 015-011-350) for a hotel development.
WHEREAS, the City is the owner of certain real property (the “Property”) located in the City of South San Francisco, California, known as County Assessor’s Parcel Number (APN) 015-011-350 attached as Exhibit A; and
WHEREAS, on March 23, 2011, the City Council approved the Oyster Point Specific Plan and certified the Phase 1 Project Environmental Impact Report which, among other things, planned for and analyzed the potential environmental impacts of developing a new, full-service hotel with up to 350 rooms on the Property; and
WHEREAS, a Disposition and Development Agreement (“DDA”) was executed on March 23, 2011, between Oyster Point Ventures, LLC, the South San Francisco Redevelopment Agency, and the City of South San Francisco for the master development of Oyster Point, including the potential development of a hotel on the Property; and
WHEREAS, the DDA was assigned to Kilroy Realty (“Kilroy”) in 2018; and WHEREAS, the DDA requires Kilroy to perform certain site work, grading, and installation of certain infrastructure to prepare for the Property for development, which will be completed, satisfying their obligation, by 2023; and
WHEREAS, in 2017, the City solicited a hotel developer for a proposed development on the Property through an RFQ/RFP process; and
WHEREAS, on December 11, 2017, the City’s Housing Standing Committee recommended that the City Council approve Ensemble Investments, LLC (“Ensemble”) to develop a full-service hotel on the Property and made a recommendation that the City Council authorize the City Manager to enter into an Exclusive Negotiating Rights Agreement (“ENRA”) with Ensemble for the development of the Property; and WHEREAS, on April 11, 2018, the City Council authorized the City Manager to execute an ENRA with City of South San Francisco Printed on 12/16/2022 Page 1 of 2 powered by Legistar™
DocuSign Envelope ID: 5FB47A5D-3B2A-438F-A5B8-8290894D0B9F File #: 22-1071 Agenda Date: 12/19/2022
Version: 1 Item #: 1a.
Ensemble, and maintained exclusivity until a Purchase and Sale Agreement (“PSA”) was executed; and WHEREAS, on October 27, 2021 the City Council approved Resolution 188-2021 authorizing the City Manager to execute a PSA with Ensemble for a sale price of $1,000,000 for the proposed hotel development attached hereto as Exhibit B; and
WHEREAS, on November 17, 2022 the Planning Commission approved the design, Use Permit, draft Development Agreement, and Transportation Demand Management Plan for the project, consisting of the new construction of a 12-story, 165 foot tall, 350 room, 261,000 square foot building, with 232 surface parking space and site improvements, as well as the determination that the project is within the scope of the previously adopted Programmatic EIR under CEQA Guidelines; and
WHEREAS, the current PSA requires the close of escrow to occur on or before December 31, 2022. Per recent amendments to Government Code Section 54220 et seq., the City is required to engage in a statutory noticing and negotiation process for properties that have not been conveyed prior to December 31, 2022.; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby:
1. Authorizes the City Manager to execute the First Amendment to the Purchase and Sale Agreement with Ensemble Investments, LLC for the disposition of a City-owned property located at 367 Marina Boulevard (APN 015-011-350) for a hotel development, in substantially the same form as attached hereto as Exhibit C, subject to review by the City Attorney and subject to minor revisions and clarifications of the City Attorney that do not otherwise expand the City’s obligations; and
2. Authorizes the City Manager to take any other related actions consistent with the intention of the resolution.
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