COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

DATE:

January 28, 2009

BOARD MEETING DATE:

February 10, 2009

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Steve Alms, Manager, Real Property Division

SUBJECT:

Amendment to the Agreement with Tuscan Tower LLC (“Buyer”) for the purchase and sale of a remnant road parcel at 490 Winslow Street, Redwood City

RECOMMENDATION:

Adopt a resolution authorizing the County Manager or the Manager’s designee to:

1) Execute an amendment to the November 2005 Purchase and Sale Agreement with Tuscan Tower LLC, extending the time within which Buyer must meet certain conditions, and

2) Execute and record documents, notices, and acknowledgements in connection with the Amendment.

VISION ALIGNMENT:

Commitment: Offer a full range of housing choices.

Goal 9: Housing exists for people at all income levels and for all generations of families.

BACKGROUND:

In October 1996, the County purchased a parcel in Redwood City to better align Winslow Street which runs alongside the Hall of Justice. The entire parcel was not required for the realignment and resulted in a road remnant.

In November 2005, the Board of Supervisors authorized execution of a purchase and sale agreement transferring the road remnant located at 490 Winslow Street, Redwood City, to Tuscan Tower, LLC. In exchange, Tuscan Tower agreed to pay closing costs and to include two units of affordable housing in their proposed condominium project in addition to those required by the City of Redwood City. To ensure compliance, the agreement provided that the County could exercise a “right of reversion” and reclaim title to the property if the developer did not record a subdivision map within three years or begin construction within four years. Alternatively, the County could require Tuscan Tower to pay additional cash consideration in the sum of Six Hundred Thousand Dollars ($600,000) in exchange for relief from the requirement of including affordable housing in the project.

Redwood City’s Precise Plan does not currently include a requirement for affordable housing but, based on the direction of City Council, City staff has begun to draft a citywide policy for inclusionary housing. The City has not yet established a position regarding an inclusionary housing requirement for the Tuscan Tower project.

DISCUSSION:

Although Tuscan Tower has not met the deadlines in the agreement, it appears that this has been due, in part, to legal challenges to the Redwood City Precise Plan; a circumstance beyond the developer’s control. If the County were to exercise the right of reversion or require the payment of the additional consideration, it is likely that Tuscan Tower would be unable to build the project which would, in turn, eliminate an opportunity for expected and much-needed affordable housing.

Tuscan Tower has requested an amendment to the agreement extending the deadlines for the map filing and commencement of construction. Although the construction has been delayed, the development will ultimately result in a greater supply of affordable housing in the community. We recommend your approval of a two year extension with one option to renew if progress is being made toward construction.

The Housing, Health and Human Services Committee reviewed this matter at its January 27, 2009 meeting, and reaffirmed the expectation that the proposed project would include any affordable units required by Redwood City in its approval process plus the two units required in the agreement between the County and Tuscan Tower LLC.

FISCAL IMPACT:

The amendment will not have a fiscal impact on the County.