Title
Introduction of Ordinance Authorizing the Interim City Manager to Execute a Third Amendment to the Lease with Bayview Landing LP for Approximately 6.4 Acres of City-Owned Public Trust Tidelands Located at 1527 Buena Vista (Encinal Terminals). [Requires four affirmative votes]
The lease amendment authorizing the proposed temporary use of the site is exempt from further review under the California Environmental Quality Act pursuant to Class 1 and Class 4, Existing Facilities and Minor Alterations to Land, where the site is not proposed to be physically modified and will be used in a manner consistent with prior use. (Base Reuse and Economic Development 29061822)
Body
To: Honorable Mayor and Members of the City Council
From: Adam W. Politzer, Interim City Manager
EXECUTIVE SUMMARY
The City of Alameda (City or Lessor) leases approximately 6.4 acres of land at 1527 Buena Vista to Bayview Landing L.P. (Lessee). The leased premises comprises one of four parcels that are commonly referred to as Encinal Terminals. The other three parcels that comprise Encinal Terminals are owned by the Lessee.
The Encinal Terminals site is subject to an approved Encinal Terminals Tidelands Exchange Master Plan (Master Plan), Development Agreement (DA), Disposition and Development Agreement (DDA), and Tidelands Exchange and a Development Agreement (Exchange Agreement) authorizing redevelopment of the 23-acre site for up to 589 multifamily housing units (including 80 deed-restricted affordable units), up to 50,000 square feet of commercial and maritime commercial space, a 160-slip marina, and 4.5 acres of public open space.
In recognition of challenging economic circumstances limiting the development viability of the approved development at Encinal Terminals, on January 7, 2025, City Council adopted an ordinance approving an amended Master Plan and DA for the Encinal Terminals site to extend the internal milestones for performing certain actions. The amended deadline for first of these amended internal milestones is March 2028.
The proposed third amendment would authorize temporary outdoor use for new electric vehicle storage consistent with a City of Alameda Use Permit (PLN25-0217) approved by the Planning Board on March 23, 2026 in Planning Board Resolution No. PB-26-2, and any subsequent use permits approved by the City during interim 2-year period and sunsetting in 2028 when preliminary site work and approval milestones in the DA must be met.
The amendment also requires the City to make certain determinations as the proposed use is use inconsistent with the purpose of the public trust.
The amendment would also require the Lessee to pay additional compensation of $4,500 per month, which may be reduced or prorated in a defined manner based on certain legal conditions related to access and other factors.
Staff is recommending that City Council authorize the Interim City Manager to execute a third amendment to the lease.
BACKGROUND
The City, as Lessor, entered into an original ground lease with Encinal Industries, Inc. (EI), on May 17, 1979, which was amended and restated in 1984 and further modified in 1997.
In January 1998, EI assigned its interest in a portion of the leased property (“Parcel 20”) to a successor entity. The lease was subsequently assigned to Bayview Landing, L.P. (Lessee), the current lessee, through a General Assignment effective March 19, 2025. The lease term, originally from April 5, 1979, to April 4, 2004, was extended for an additional twenty-five (25) years through April 4, 2029.
The leased premises comprises one of four parcels that are commonly referred to as Encinal Terminals. The other three parcels that comprise Encinal Terminals are owned by the Lessee.
The leased premises are located in the middle of the Encinal Terminals property (as shown in Exhibit 3) and are situated upon State tidelands. The Lease requires approval by the City (as Lessor) for any use of the premises that is substantially different than those permitted by the Lease, including any use inconsistent with the provisions of Chapter 594 of the California Statutes of 1917 (Granting Statute), as amended.
As a result, any use of the premises that is inconsistent with the provisions of that Granting Statute, but otherwise permitted by law, requires Lessor approval and for the City to make certain determinations.
Encinal Terminals Development
In 2018, the City approved a Master Plan to facilitate redevelopment of the property consistent with the General Plan and zoning designations. The Master Plan provided for public waterfront parks and promenades adjacent to the Oakland Estuary where no public access currently exists. Further, the Plan allowed for the conversion of the site, which was previously used for shipping container storage, to a transit-oriented, mixed-use development with market-rate and affordable deed-restricted housing opportunities, retail and maritime commercial job opportunities and services, and pedestrian, transit and bicycle facilities.
On February 1, 2022, City Council adopted a Master Plan, DA, and DDA and Tidelands Exchange to facilitate a viable redevelopment of the property that included certain milestones within the overall 15-year term of the DA/DDA to ensure completion of intermediate steps.
The City Council’s approval in 2022 allows for a mixed use plan for up to 589 multifamily housing units, 80 of which would be deed restricted affordable units, up to 50,000 square feet of commercial and maritime commercial space, a 160-slip marina, and 4.5 acres of public open space; a Density Bonus application; and a DA vesting the entitlements for 15 years in exchange for additional public benefits that could not be achieved without the DA and Tidelands Exchange Agreement.
In recognition of challenging economic circumstances limiting the development viability of the approved development at Encinal Terminals, on January 7, 2025, City Council adopted an ordinance approving an amended Master Plan and DA for the Encinal Terminals site to extend the internal milestones for performing certain actions. The amended deadline for first of these amended internal milestones is March 2028.
Temporary Use Prior to Development Activities Commence
As the approved development remains challenging in the current market environment, the Lessee has expressed a desire to utilize the site in the interim to help off-site carrying costs for the site prior to the fulfilling the first site development milestones under the DA and Master Plan in March 2028.
The Lessee is proposing a two-year temporary use of the vacant 23-acre Encinal Terminals site at 1527 Buena Vista Avenue for the outdoor storage of newly manufactured electric vehicles (EV) prior to sale and delivery to consumers. Approval of the temporary use would sunset at the first internal development milestone included in the DA and Master Plan (March 2028).
Vehicles would be delivered by auto carrier trucks - ranging from single to double haulers up to standard semi-trucks - traveling an approximately two-mile route along the City's adopted truck routes between the Fruitvale Bridge and the site, with deliveries anticipated to average up to 10 truck trips per day following initial ramp-up periods.
DISCUSSION
On March 23, 2026, the Planning Board approved a use permit in Planning Board Resolution No. PB-26-2 allowing for an interim outdoor use for the non-retail, commercial storage of new electric vehicles (EVs) on the vacant 23-acre Encinal Terminals located at 1527 Buena Vista Avenue for a two-year period prior to implementation of the Master Plan. The approved use permit stipulates that all loading and unloading operations would occur entirely within the site, with no stopping or parking on public streets, and hours of operation would be limited to between 8:00 AM and 4:00 PM, unless previously authorized in writing by the Planning Director for limited expanded hours to address unusual circumstances.
Because the Lease requires approval by the City (as Lessor) for any use that is substantially different than those permitted by the Lease, including any use inconsistent with the provisions of the Granting Statute, if such substantially different use is otherwise permitted by law, the Lessee has requested a lease amendment to authorize the temporary use and allow operations to commence.
The proposed amendment would establish the following:
• Allowable Uses. Authorize temporary outdoor new electric vehicle storage consistent with PLN25-0217 (Exhibit 4) and any subsequently approved use permits during the two-year interim period prior to implementation of the Master Plan.
• Additional Rent. Require the Lessee to pay the City additional compensation of $4,500 per month, which may be reduced or prorated in a defined manner based on certain legal conditions related to access and other factors, payable within thirty (30) days following the close of each calendar quarter, in addition to base rent (base rent currently is approximately $1,000 per year).
• Sublease. Authorize the Lessee to enter into a sublease agreement with RAR Capital, the third-party entity proposing to operate the site as for temporary new electric vehicle storage, with any future change in sublease entity subject to approval by the Interim City Manager or designee.
If this lease amendment is approved, the proposed use would generate a series of benefits and impacts to the City that should be considered by the City Council. Furthermore, if approved, the lease amendment would not alter or impact the DA or Master Plan in any way.
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Benefits |
Negative Impacts |
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Security and activation of blighted site subject to trespassing, theft, and graffiti |
Increased truck traffic; impacts could be exacerbated during Oakland Alameda Access Project tube closures. |
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Additional revenue to City to support other tidelands properties |
Noise from truck traffic, entering exiting site, etc. |
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Financial support for Lessee until market conditions allow for sale and/or development of site |
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Demolition of blighted buildings and improvements to intersection of Entrance and Clement |
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Given the benefits and limited negative impacts anticipated by the proposed temporary use, staff recommends approval of the lease amendment to allow the proposed interim use to proceed consistent with the approved use permit.
ALTERNATIVES
After opening the public hearing and considering all the documents and testimony, City Council may consider several alternative courses of action, including:
• Approve the first reading of the ordinance authorizing the Interim City Manager to execute the third amendment to the lease with Bayview Landing, L.P. on the terms described in this staff report.
• Choose not to approve the first reading and direct the Interim City Manager to continue negotiations with the Bayview Landing, L.P. In this scenario, the City Council should identify the specific lease terms or conditions that require further negotiation.
• Choose not to approve the third amendment to the lease with Bayview Landing, L.P. and direct the Interim City Manager to terminate negotiations with Bayview Landing, L.P.
FINANCIAL IMPACT
The proposed lease amendment is estimated to generate $54,000 per year. The proceeds will go to the Tidelands Fund (216).
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The recommended lease amendment is consistent with the General Plan policies and the Alameda Municipal Code zoning requirements for the property. This action is subject to the Levine Act.
ENVIRONMENTAL REVIEW
The lease amendment authorizing the proposed temporary use of the site is exempt from further review under the California Environmental Quality Act pursuant to Class 1 and Class 4, Existing Facilities and Minor Alterations to Land, where the site is not proposed to be physically modified and will be used in a manner consistent with prior use. The interim use would be consistent with the underlying zoning, Master Plan and land lease. It is also consistent with or less intensive than prior uses such as a shipping wharf and container storage and repair area.
CLIMATE IMPACT
The proposed use that would be authorized with this lease amendment presents a mixed climate impact profile. On the beneficial side, the storage of, and support of the adoption of, EVs aligns with the City’s climate policy goals. Additionally, if this temporary use supports the realization of the approved mixed-use development at Encinal Terminals, which aligns with City's sustainability goals and Climate Action and Resiliency Plan, earlier than would otherwise be achieved.
Conversely, the delivery operations rely on diesel-powered auto carrier trucks making multiple trips per day via the City’s established truck route, generating localized particulate matter and greenhouse gas emissions.
Overall, the project's climate footprint is modest and temporary in nature, consistent with its two-year time limit.
RECOMMENDATION
Introduce an ordinance authorizing the Interim City Manager to execute a third amendment to the lease with Bayview Landing, L.P. for approximately 6.4 acres of City-owned public trust tidelands located at 1527 Buena Vista (Encinal Terminals).
Respectfully submitted,
Abigail Thorne-Lyman, Base Reuse and Economic Development Director
By,
Walker Toma, Community Development Manager
Financial Impact section reviewed,
Ross McCarthy, Finance Director
Exhibits:
1. Proposed Amendment No. 3 to Lease
2. Existing Lease and Amendments
3. Encinal Terminals Site Map
4. Use Permit (PLN25-0217)