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Home My WebLink AboutED Corporate Center CityFITMT-�M Prepared by: Stephanie Lovette, Economic Development Director Lisa Goldfien, Assistant City Attorney 3*b ,Agenda Item No: Meeting Date: November 18, 2013 City Manager Approval: SUBJECT: Resolution Endorsing a Request to the San Rafael Successor Agency for a Second Extension of the Construction Schedule for the Phase 11 Buildings Min the San Rafael Corporate Center I A V rl 7 -9 M BACKGROUND: In 1998, the City Council and the San Rafael Redevelopment Agency Board 2pproved the development of the 406,000 -square -foot San Rafael Corporate Center on Lindaro 2nd Second Streets in Downtown. The City Council approved a Development Agreement and related land use and planning approvals and the Redevelopment 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 approved Z ,or 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 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, rather than the Development Agreement, governs the timing of construction on this project. Pursuant to the OPDDA, construction of the two final structures was supposed to begin in 2009, immediately following completion of the first structures in Phase 11. With the Great Recession severely impacting office vacancy rates and limiting the availability of commercial real estate construction financing at that time, the Redevelopment Agency agreed to a request by Seagate to delay the commencement of construction of the final two structures. The Agency approved a first extension of 30 months, and included a provision for a second 30 - month extension upon reasonable and timely request by Seagate. At the same time, the City Council adopted Resolution No. 12794 supporting the extension. Fife IN o. rr Council Meeting: Dispositions' jr-7 Seagate has complied with all the conditions imposed by the Redevelopment Agency in connection with the extension approval, and has now submitted a request for the second 30 - month extension. Seagate has indicated that the continuing challenges related to the Greal- Recession have not yet allowed it to reach its target of 95% occupancy to start the final construction. ANALYSIS: Seagate's request requires action by the San Rafael Successor Agency Board rather than the City Council, since, as noted above, the OPDDA governs the specific construction timeline requirements. The OPDDA permits the Redevelopment Agency—now the Successor Agency --and the property owner to agree in writing to extensions of the times of performance under the agreement. Consideration of Seagate's request is on the Successor Agency Board's agenda for this date. Staff is recommending that the Agency Board adopt a resolution approving the request. The requested extension does not require an amendment to the Development Aqreement with Seagate; however it is fully consistent with that agreement. Staff recommends that the City Council adopt the attached Resolution, to go on record as it did in 2009 endorsing the extension of the construction timeline and affirming that it is consistent with the Development Agreement. FISCAL IMPACT: None. OPTIONS: Do not endorse the requested extension and take no action. ATTACHMENTS: A: September 23, 2013 letter request from Seagate B: Resolution Paul Jensen, AICP Community Development Director City of San Rafael 14010 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 parking garage along with a second thirty (30) month extension upon reasonable request by Seagate SRCC. The San Rafael Redevelopment Agency Resolutio 0 n No. 209-11 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 the initial 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 cc.* Nancy Mackle, City Manager Z -- Dennis Fisco, Seagate SR Corporate Center, LLC 980 FIFTH AVENUE - SAN RAFAEL, CALIFORNIA 94901 (415) 455-0300 - FAX (415) 453-2892 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL ENDORSING A REQUEST TO THE SAN RAFAEL SUCCESSOR AGENCY FOR A 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 the San Rafael Corporate Center; and WHEREAS, on May 18, 1998, in connection with the City Council's approval of the Development Agreement, the San Rafael Redevelopment AgencyRedevelopment 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 WHEREAS, the San Rafael Corporate Center project, including title to the properties subject to the Development Agreement and the OPDDA and all the rights and obligations of Fair,, Isaac under the Development Agreement and the OPDDA and all amendments to those agreements, subsequently have been assigned and transferred to a new property owner/developer called Seagate SR Corporate Center LLC, a California limited liability company (hereafter "Seagate SRCC"); an WHEREAS, i establishes the schedule for construction of the San Rafael Corporate Center, and provides, in part, that once Seagate SRCC commences construction on Phase 11 of the project it must dilivently pursue construction of the remaining structures and parking without interruption until completion; and WHEREAS, Seagate SRCC commenced construction of Phase 11 in compliance with the Development Agreement and the OPDDA and completed 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 of the final Phase 11 office building at 791 Lincoln Avenue and it* parking arage at 788 Lincoln Avenue, due to the poor economic cond ions created by the gGreat Recession; and WHEREAS, Section 9.04 of the OPDDA provides that times of performance under the OPDDA may be extended in writing by the Redevelopment Agency and the developer-, and WHEREAS, on July 20, 2009, the Board of the Redevelopment Agency adopted Resolution No. 2009-11 approving a request from Seagate SRCC for postponement of the commencement of construction of the final Phase 11 building and parking structure for a period of 30 months, with the additional agreement that a second 30 -month extension mav be granted W, by the Redevelopment Agency Board upon reasonable and timely request by Seagate SRCC.- and WHEREAS, on July 20, 2009, the City Council adopted Resolution No. 12794, finding that the requested extension of the construction schedule for the final Phase 11 building and parking structure was consistent with the terms of the Development Agreement and was in the best interests of the City of San Rafael; and 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 City Council finds that the requested extension is reasonable and timely and consistent with the terms of the Development Areement, and is in the best interests of the g City of San Rafael and its residents. NOW, THEREFORE, IT IS HEREBY RESOLVED that the City Council hereby endorses the request to the San Rafael Successor Agency by Seagate SRCC for a second 30 - month extension of the time to commence construction of the 791 Lincoln Avenue office building and i Lincoln Avenue parking garage pursuant to the OPDDA. 1. ESTHER C. BEIRNE, City Clerk of the City of San Rafael, hereby certify that the foregoing was duly and regularly 'Introduced and adopted at a regular meeting of the City Council of the City of San Rafael held on the 18 th day of November, 2013 by the following vote: AYES: COUNCILMEMBERS: Colin, Connolly, Heller, McCullough & Mayor Phillips 1 1111 RaITN"M N ROUTING SLIP / APPROVAL FORM INSTRUCTIONS: USE THIS FORM WITH EACH SUBMITTAL OF A CONTRACT, AGREEMENT, ORDINANCE OR RESOLUTION BEFORE APPROVAL BY COUNCIL / AGENC FROM: Stephanie Lovette #ATE: November 7, 2013 IN ;ip FAI San Rafael Corporate Center km ; colvi