South City further pursues tax district

The tax, if approved at a later date, will be administered against city property, land slated to be developed into a proposed massive biotechnology and an residential project and a neighboring commercial park. The Monday, Dec. 4, decision came the day before the council’s annual rotation in which Matsumoto became vice mayor, Liza Normandy became mayor and Pradeep Gupta returned to serve as a councilman after being mayor this year.

The special tax district is the first of its kind in South San Francisco, and Councilman Mark Addiego said he believes the proposal is suitable to make necessary and welcome changes to the area east of Highway 101.

“It’s a new day. A community facilities district is something new, and I’m going to embrace it,” he said.

The district is designed primarily to fund some of the $70 million worth of infrastructure fixes making way for a massive proposal offered by Oyster Point Development, which aims to offer 1,191 rental and for-sale residences spanning in size between studios and three-bedroom units, as well as about 1.5 million square feet of research and development space for biotechnology companies.

Under terms of the proposed tax, the developer will pay 7 cents per square foot of property owned while the infrastructure work goes on and an additional 32 cents per square foot in perpetuity. The city can, and is expected to, exempt itself from paying the tax.

Addiego did acknowledge the proposal is not popular with all the property owners facing paying the tax, and crafted an amendment to address the concerns raised by Kishiwa Fudosan America, which holds land leased from them for nearby commercial buildings.

Representatives of the company neighboring the development area have repeatedly expressed their frustration with being one of the three landowners asked to pay the tax, and have sought an exemption from the obligation.

In recognition, Addiego suggested the company only be required to pay the 32 cent tax, but not the 7 cent portion. The proposal was approved by fellow councilmembers.

Matsumoto voted against the proposal though, citing frustrations regarding equitable distribution of the financial burden.

“I’m not comfortable with the way this is structured,” said Matsumoto, who voted consistently with her previous opposition to the tax.

Addiego suggested Kishiwa Fudosan America should be exempt from the smaller portion of the tax, because that revenue will be used to fix a fuel line system serving the nearby Oyster Point Marina/Park, not the commercial park.

But since the company and its tenants do stand to enjoy most of the new amenities financed by the larger piece of the tax revenue, Addiego and his colleagues were comfortable including the Kishiwa Fudosan America property in the district.

Beyond the housing and commercial space proposed to be built, officials also expect a public park and potentially a hotel will be built in the area, enhancing the need for more public safety and maintenance workers to service the enhancements.

The tax, which will be subject to a later vote between the three affected property owners, is expected to generate about $178,363 in the first year to help to offset the city’s cost in servicing infrastructure improvements brought by a massive building proposal.

Looking ahead with the amended proposal, Addiego said he believed cutting a break to the neighboring corporation was the most equitable way to pursue a badly needed source of revenue.

“This does show the government here in California exhibiting some fairness,” he said.

austin@smdailyjournal.com

(650) 344-5200 ext. 105