Title
Recommendation to Authorize the City Manager to Execute a Memorandum of Understanding between the Alameda Unified School District and the City of Alameda for Exterior Property Management Related to Certain Properties Located at Alameda Point for a 10-Year Term Commencing May 1, 2025 and Ending May 31, 2035.
This action is categorically exempt from further environmental review pursuant to California Environmental Quality Act Guidelines Sections 15301 (Existing Facilities) and 15061 (Common Sense). (Base Reuse and Economic Development 29061822)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
Alameda Unified School District (District) acquired in fee certain real property and buildings located at Alameda Point under a joint settlement agreement executed in 2014 between the City of Alameda (City), Alameda Housing Authority and District. As part of this settlement agreement, the City provided certain limited exterior property management services at no cost to the District for a fixed period of ten years. The District was unable to dispose of the Property prior to the sunset of the City’s obligation to provide property management services and the City and District staff agree it is cost effective for the City to continue to provide these services, and to facilitate one-time security improvements to upgrade the exterior of the largest District-owned building, Building 17, located at 700 W. Essex Drive at Alameda Point.
A new Memorandum of Understanding (MOU) (Exhibit 1) submitted for approval will allow the City to continue providing services to the District at Alameda Point and details a reasonable schedule for the District to reimburse the City for its costs. The MOU has a total term of 10 years but can be terminated earlier upon the disposition of the property by the District. Elements of the proposed MOU are summarized below.
The District will consider this MOU at the May 16, 2025 Board of Education Meeting and City staff recommends the City Council authorize the City Manager to execute this MOU once approved by both parties.
BACKGROUND
The District owns certain real property at Alameda Point consisting of two full County Assessor blocks bounded to the north by Redline Avenue, west by Pan Am Way, south by West Midway Avenue and east by Todd Street (Property) and containing over 19 acres of land. There are a number of vacant buildings located on the Property, including the largest, known as Building 17, located at 700 W. Essex Drive. The District leases and licenses other portions of its Property for parking and storage uses. A location map is included as Exhibit C to the MOU (p. 46) and can be referenced for more information.
The District acquired the Property, described within the Quit Claim Deed (Exhibit A to the MOU, p. 7), as part of a larger joint Settlement Agreement (Settlement Agreement) executed between the City, the Alameda Housing Authority and District dated March 18, 2014 (Exhibit B of the MOU, p. 33). Pursuant to the Settlement Agreement, the City agreed to provide certain limited exterior property management services to the District, at no cost to the District, for a period of up to 10 years or until the District was able to sell, transfer, or otherwise convey the Property.
The District was unable to dispose of the Property prior to the sunset of the City’s obligation to provide property management services and both City and District staff recommend that the arrangement continue. Further, staff also recommends that certain one-time improvements be made, specifically to the exterior of Building 17, to better secure the structure and to help deter trespassing and vandalism, which have presented a very pressing concern for both parties and the City’s Police and Fire Departments. Building 17 is a two-story structure and the former Bachelor Officer’s Quarters, with approximately 144,133 square feet of interior space. Vandals have stripped almost all of the electrical wiring and much of the plumbing infrastructure from the building and there are ongoing issues of trespassing. Building 17 is identified as a Contributing building in the Naval Air Station (NAS) Alameda Historic District.
The District’s Property also includes Buildings 135 and 137. These are included on the list provided by the Navy as recommended for demolition. Lastly, the District’s Property includes Building 585, a former bar and restaurant, which is a noncontributing structure and was also used in the past for education purposes but is currently vacant.
DISCUSSION
Staff recommends that City Council authorize the execution of the new MOU between the City and the District to allow the City to continue to provide certain limited exterior property management services for the Property at the current level of service, in exchange for annual reimbursement from the District. City services would include exterior security patrol, Base Reuse staff and Commercial Property Management Provider time to respond and cooperate with the Police, Fire and Housing and Human Services Departments. This is necessary to address trespassing and emergencies, basic landscaping, exterior dumping and debris removal, annual tree trimming and minor repairs consisting of reattaching plywood and basic security measures to points of ingress to Building 17 to the extent feasible. It would not include major repairs or improvements to the property. Staff estimates these services cost the City approximately $5,000 per month, with a total of $60,000 to be reimbursed by the District on an annual basis. The estimated monthly cost for these services will be reduced to $3,000 ($36,000 annually) once a series of exterior security upgrades are completed at Building 17 by the end of 2025 (as described in more detail below) and therefore, the extent of needed property management services is reduced. All City staff, contractors, subcontractors and assignees are instructed not to enter Building 17, 136 or 137 due to safety hazards that currently exist in the buildings. If there is a safety issue that requires police enforcement, that is closely coordinated to ensure safety of all personnel.
The MOU also outlines the agreement between both parties for the City to carry out a larger exterior maintenance and repair project specific to Building 17 within the next six months to upgrade the exterior security improvements that will address chronic trespassing and vandalism issues. These repairs are required by the City in the MOU in order for the City to continue providing services to the District. City staff will bid out the mutually approved scope of work for the project in compliance with the City’s procurement policy and seek to engage the contractor through City’s standard Service Provider Agreement (Agreement). City staff will seek City Council approval for the Agreement at a future public meeting and staff will oversee and direct all work, approve and directly pay invoices.
Staff anticipates the project to be under $200,000, and plans to utilize existing budgeted funds in Fiscal Year 2025-26, but in the event that the project budget exceeds this amount, the City shall not be obligated to carry out this project on behalf of the District unless the District agrees to provide additional reimbursement funding via a subsequent amendment to this MOU.
The District has agreed, pursuant to the execution of the MOU, to reimburse the City on an annual basis for the exterior property management services. Further, the estimated $200,000 for the exterior security upgrade project specific to Building 17 would be reimbursed over time by the District under the general terms, as follows:
• The initial 50% will be paid through yearly installments split evenly over a five year period beginning on the date that a notice of completion for the project is issued by the City to the District.
• The remaining balance of 50% is payable to the City in a lump sum at such time that the District is able to sell, transfer or otherwise convey the Property or at the termination of the MOU in April 2035, whichever occurs first.
• The District’s obligation to reimburse the City the balance shall not be transferred to a third party through sale, transfer, lease, rental, conveyance or any other disposition of the Property.
• The City will not charge any additional fees or interest.
The parties agree and acknowledge that the City’s ongoing management of the Property, as well as the planned exterior security upgrades, benefit the District by reducing liability risk. Both parties agree that the responsibility and liability for the Property has been and will continue to be borne by the District as the fee owner. The District provided the City with updated general liability insurance.
Staff recommends City Council authorize the execution of the MOU by the City Manager and believe the agreement represents the most cost-effective approach to providing the exterior property management services for the District’s Property at Alameda Point. Staff believe this approach also reflects the ongoing, close collaboration between the City and the District.
ALTERNATIVES
• Authorize the City Manager to execute the MOU between the District and the City for a 10-year term commencing May 1, 2025 and ending May 31, 2035.
• Direct staff to negotiate different terms and authorize the City Manager to execute an agreement that includes such terms, if acceptable to District.
• Do not authorize execution of the MOU. This will cause a lapse in exterior property management services by the City or may result in the City continuing to provide services, without reimbursement by the District. Additionally, the exterior security improvements would not be made unless otherwise directed by City Council.
FINANCIAL IMPACT
The proposed exterior security upgrade project at Building 17 and monthly costs associated with the exterior property management services on the District’s Property would be paid out of budgeted Base Reuse and Economic Development funds (29061822) and would have no impact on the General Fund. Reimbursement from the District would be allocated to the Base Reuse and Economic Development Department, 29061822, to offset property management annual expenses. While the net fiscal impact in Fiscal Year 2025-26 would be a cost of $200,000, this would be reimbursed over time, with the long-term net fiscal impact only being the opportunity cost associated with the lack of interest payments.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Alameda Municipal Code and supports the City Strategic Plan Priority to Enhance Community Safety and Services. This action is subject to the Levine Act.
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required.
On separate and independent basis, this action is categorically exempt from further environmental review pursuant to CEQA Guidelines Sections 15301 (Existing Facilities) and 15061 (Common Sense).
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Authorize the City Manager to execute an MOU between the District and the City for a 10-year term commencing May 1, 2025 and ending May 31, 2035, at Alameda Point.
Respectfully submitted,
Abby Thorne-Lyman, Base Reuse and Economic Development Director
By,
Alesia Strauch, Base Reuse Manager
Financial Impact section reviewed,
Ross McCarthy, Acting Finance Director
Exhibit:
1. Memorandum of Understanding