The URL can be used to link to this page

Home My WebLink AboutED CA Corporate Center SASAN RAFAEL SUCCESSOR AGENCY AGENDA ITEM NO.: 9,a MEETING DATE: November 18,2013 AGENDA REPORT Department: Economic Development lA Prepared by: Stephanie Lovette Executive Director Approval: Economic Development Manager Lisa Goldfienl Assistant City Attorney SUBJECT: Resolution Approving a Request for a Second Extension of the Construction Schedule for the Phase 11 Buildings in the San Rafael Corporate Center BACKGROUND: In 2011. the California State Legislature enacted Assembly Bill ABx 126 (the "Dissolution Act"') to dissolve redevelopment agencies formed under the Community Redevelopment Law. In its 2011 decision in California Redevelopment Association v. Matosantos, the California Supreme Court declared the Dissolution Act to be constitutional. Under the Dissolution Act, all California redevelopment agencies were dissolved effective February 1, 2012. On January 3, 2012, the City Council adopted a resolution accepting for the City the role of successor agency to the Redevelopment Agency of the City of San Rafael. The San Rafael Successor Agency is now charged with the statutory obligations and winding up of the former San Rafael Redevelopment Agency. This item is essentially a housekeeping matter related to the final stages of the San Rafael Corporate Center, project approved by the City Council and Redevelopment A•gency in the 1990's. In 1998, the City Council and Redevelopment Agency Board approved the development of the 406,000 -square -foot San Rafael Corporate Center on Lindaro and Second Streets m Downtown. The City Council approved a Development Agreement and related land use and planning approvals-, and the Agency Board approved an Owner Participation, Disposition and Development Agreement ("OPDDA") for the sale of the City Corporation Yard site to be included in the development. The property is now owned by Seagate SR Corporate Center LLC ("Seagate"). The first phase of the San Rafael Corporate Center has been constructed. Phase 11 of the project is approvect tor two parking garages and three office buildings, and three of those structures,, the office buildings at 770 and 790 Lindaro Street and the parking garage at 775 Lindaro Street, were completed in ik File No.. - I.. €Uf Agency Meeting-. Di*sposi*tl*on*. @771ME 2009. Two structures remain to be built to complete the development, an office building at 791 Lincoln Avenue and a parking garage at 788 Lincoln Avenue The OPDDA,, a Redevelopment Agency agreement, governs the timing of construction on thi, project. Pursuant to the OPDDA, construction of the two final structures was supposed to begi in 200%, immediately following completion of the first structures in Phase 11. With the Gre Recession severely impacting office vacancy rates and limiting the availability of commercial re estate construction financing at that time, the Redevelopment Agency agreed to a request b Seagate to delay the commencement of construction of the final two structures. The Agenc approved a first extension of 30 months, and included a provision for a second 30-moln't extension upon reasonable and timely request by Seagate. The first 30 -month extension expired on September 28, 2013. Seagate has complied with all the conditions imposed by the Redevelopment Agency in connection with the extension approval, and has timely submitted a request for the second 30 -month extension. Seagate has indicated that the continuing challenges related to the Great Recession have not yet allowed it to reach its target of 95% occupancy to start the final construction. ANALYSIS: Section 9.04 of the OPDDA permits the Redevelopment Agency and the property owner to agree in writing to extensions of the times of performance under the agreement. This was the basis for the Redevelopment Agency's action in 2009. As noted above, that action anticipated the possibility that Seagate would need a second extension of the construction timeline. The requested extension would aive Seagate through March 28, 2016 to commence 4-1 construction. Staff recommends that the Board approve Seagate's extension request. Adoption of the attached Resolution will satisfy Section 9.04's requirement that the extension agreement be in writing. I W, L-TVIR -0 1 Uy I OPTIONS: Do not agree to the requested time extension. ATTACHMENTS: Resolution September 23, 2013 letter from Seagate SR Corporate Center, LLC A RESOLUTION OF THE SAN RAFAEL SUCCESSOR AGENCY APPROVING . REQUEST FOR 1 SECOND EXTENSION OF THE CONSTRUCTION SCHEDULE FOR THE PHASE 11 BUILDINGS IN THE SAN RAFAEL CORPORATE CENTER WHEREAS, on February 17, 1998 the San Rafael City Council approved a Development Agreement with Fair, Isaac and Company, Inc. ("Fair, Isaac") for the development of a phased office park on property located at Second and Lindaro Streets now known and hereafter referred to as San Rafael Corporate WHEREAS, on May 18, 1998, in connection with the City Council's approval of the Development Agreement, the San Rafael Redevelopment Agency WHEREAS,Agency") entered into an Owner Participation, Disposition and Development Agreement ("the OPDDA") providing for the sale to and development by Fair, Isaac of certain Redevelopment Agency real property as part of the San Rafael Corporate Center; and ! Rafael `Corporate Center project, including title to the properties subject to the Development Agreement and the OPDDA and all the rights and obligations of Isaac Agreement ?.greements, subsequently have been assigned and transferred to a new property owner/developer called Seagate SR Corporate Center LLC, a California limited liability company ("Seagate SRCC"); and WHEREAS, the OPDDA establishes the schedule for construction of the San Rafael Corporateand provides, part,«commences Phase 11 of the project it must diligently pursue construction of the remaining structures and parking without interruptioncompletion; WHEREAS, Seagate SRCC commenced construction of Phase 11 in compliance with the Development Agreement and the i i ' and d construction of the office buildings at 770 and 790 Lindaro Street and the parking garage at 775 Lindaro Street in 2009, but wished at that time to delay commencement final Phase office at and parking garage !t 788 Lincoln Avenue, due to the 7 Greateconomic conditions created by the Recession; and WHEREAS, Section 9.04 of the OPDDA provides that times of performance under th WHEREAS, on July 20, 2009, the Board of the Redevelopment Agency adopte Resolution No. 2009-11 approving a request from Seagate SRCC for postponement of th commencement of construction of the final Phase 11 building and parking structure for a perio of 30 months, with the additional agreement that a second 30 -month extension may be grante by the Redevelopment Agency Board upon reasonable and timely request by Seagate SRCC; ani WHEREAS, due to the continuing challenges related to the Great Recession, on September 23, 2013 Seagate SRCC submitted a timely written request for an additional 30 - month extension of the required construction schedule; and WHEREAS, the California State Legislature enacted Assembly Bill xl 26 to dissolve redevelopment agencies formed is the Community Redevelopment Law (Health and Safety Code Section 33000 et seq.); and WHEREAS, on February 1, 2012, the San Rafael Redevelopment Agency was dissolved pursuant to Health and Safety Code Section 34172; and WHEREAS, on January 3, 2012 and pursuant to Health and Safety Code Section 34173, the City Council of the City of San Rafael (the "City Council") declared that the City of San Rafael, a municipal corporation, would act as the San Rafael Successor Agency, as successor to the dissolved Redevelopment Agency, effective February 1, 2012; and WHEREAS, the City Council, acting as the Governing Board of the San Rafael Successor Agency, finds that the requested extension is reasonable and timely; NOW, THEREFORE, BE IT RESOLVED that the City Council, acting as the Governing Board of the San Rafael Successor Agency, hereby approves, pursuant to Section 9.04 of the OPDDA, Seagate SRCC's September 23, 2013 written request to postpone the commencement of construction of the 791 Lincoln Avenue office building and the 788 Lincoln Avenue parking gam4e for an additional period of 30 months, through March 28, 2016. 1, Esther C. Beirne, Secretary of the San Rafael Successor Agency, hereby certify that the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the San Rafael Successor Agency, held on Monday, the I 8th day of November, 2013, by the following vote, to wit: AYES: Members: Colin, Connolly, Heller, McCullough & Chairman Phillips NOES: Members: None N Esther . Beime, Secretary San Rafael Successor Agency Paul Jensen,, AICD Community Development Director City of San Rafael 1400 Fifth Ave. San Rafael, CA 94915-1560 RE: San Rafael Redevelopment Agency Resolution No. 2009-11 San Rafael Corporate Center This letter is being written with reference to the San Rafael Redevelopment Agency Resolution No. 2009-11 whereby Seagate SR Corporate Center, LLC (hereafter "Seagate SRCC") as a member of the ownership of SR Corporate Center Phase Two LLC was granted a thirty (30) month extension in which to commence construction of the 791 Lincoln ♦Avenue office building and the 788 Lincoln Avenue parkingarage along with a second thirty (30) month extension g upon reasonable request by Seagate SRCC. The San Rafael Redevelopment Agency Resolution No. 2009-11 was ratified by the City of San Rafael Resolution No. 12794 on July 20, 2009. (Copies attached.) Seagate SRCC does hereby request that the San Rafael Redevelopment Agency, or successor in interest thereof, grant and vest the second thirty (30) month extension effective upon the expiration of theinitial thirty (30) month extension. Seagate SRCC has complied with all of the conditions contained within the Agency Board's Resolution including providing for adequate interim paved parking, completing the final approved landscaping on the 791 building pad and installing a perimeter fence with screening around the garage building pad. Please let me know what if anything further needs to be submitted to the City of San Rafael in order for you to proceed in processing this request. Thank you for your assistance with this matter and please do not hesitate to give me a call with any questions you may have regarding this request or any other aspect of the San Rafael Corporate Center. Sincerely, Willis K. Polite Jr. SR Corporate Center Phase Two, LLC Seagate SR Corporate Center, LLC c C., Nancy Mackle, City Manager Dennis Fisco, Seagate SR Corporate Center, LLC 980 FIFTH AVENUE - SAN RAFAEL, CALIFORNIA 94901 (415) 455-0300 - FAX (415) 453-2892 111 111 WMA, III " IBM 1 11i' 1U mAjj INSTRUCTIONS: USE THIS FORM WITH EACH SUBMITTAL OF A CONTRACT, AGREEMENT, ORDINANCE OR RESOLUTION BEFORE APPROVAL BY COUNCIL / AGENCY. SRRA 1 SRCC AGENDA ITEM NO. 9. DATE OF MEETING: November 18, 2013 FROM: Stephanie Lovette DEPARTMENT: Economic Development �'November1 Pill C AIT Jill P rtment Head (signature) (LOWER HALF OF FORM FOR APPROVALS ONLYN City Attorney {signature