Title
Update on Alameda Point Piers and Maritime/Blue Tech Strategy
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
Alameda Point’s goal of supporting and expanding its maritime and blue tech businesses has seen success, including reuse of Piers 1 and 3 by a variety of businesses (for an aerial map of the area, see Exhibit A, Draft Maritime / Blue Tech Strategy for Alameda Point), attraction of the Water Emergency Transportation Authority’s (WETA) Central Bay Operations & Maintenance Facility and Seaplane Lagoon Ferry Terminal, and more than ten maritime and blue tech businesses and organizations. At the same time, the City of Alameda (City) faces significant challenges from the multi-million dollar cost of needed ongoing dredging around the piers, major repairs to allow long-term use of Pier 2 that were previously estimated at $15 million or more, and capital repairs required for other waterfront facilities.
The six industrial buildings in the working waterfront and maritime / blue tech area between the piers and Orion Street have been leased to maritime, blue tech and other businesses, with additional businesses in these sectors scattered throughout Alameda Point. There remains 20 acres or more of land in this area that is available for use and development most of which is owned by the City in the State Lands Trust, and is restricted for use by maritime, waterfront and recreational purposes. This area is also considered to be part of the Enterprise District (a roughly 100-acre subarea of Alameda Point which has been envisioned for future job-generating land uses), but the presence of the piers and the State Lands Trust restrictions mean it will be far more likely to draw maritime and blue tech businesses.
The City has worked with a consultant team to create a draft Maritime and Blue Tech Strategy . In this strategy, a clear priority was reinvesting in the piers at Seaplane Lagoon to leverage the City’s waterfront assets. The purpose of this item is to seek the Mayor’s Economic Development Advisory Panel’s (EDAP’s) feedback on the draft plan, and discuss how the City can most effectively make investments in its waterfront facilities to best generate economic benefits to the City in the form of job and business creation and growth, workforce development, and/or revenue generation. This item also closely follows the study session EDAP held at its August 26, 2024 meeting regarding the future development of the Enterprise District at Alameda Point.
BACKGROUND
Alameda Point Piers
Alameda Point was operated by the United States Navy (Navy) as Naval Air Station Alameda from 1940 to 1997. It was selected for closure as part of the 1993 Base Realignment and Closure (BRAC). Operational closure occurred in April 1997. The southeastern side of Alameda Point’s Seaplane Lagoon contains Pier 1 (660 feet long by 53 feet wide), Pier 2 (1,200 feet by 80 feet), and Pier 3 (1,100 feet by 150 feet), whose construction by the US Navy started in 1938 for berthing and resupply and refitting of aircraft carriers and other naval vessels.
Since the Navy’s departure, Pier 1 has been leased by the City to Power Engineering Construction, an Alameda-based maritime contractor that has nearby facilities in Alameda Point, with additional use by Matson Navigation and Kai Concepts. The northern side of Pier 3 has been utilized by the USS Hornet Museum, leaving the southern side of Pier 3 available for periodic usage (the berthing of the smaller vessel currently there is expected to end soon).
Pier 2 was used to berth US Maritime Administration (MARAD) National Defense Reserve Fleet vessels, but due to decreasing water depth at the pier from ongoing sedimentation its vessels were redeployed to another location, and Pier 2 has been inactive since that time. There has been no significant upgrading or replacement of Pier 2 utility systems or structures since the Navy’s departure. Based on prior estimates Pier 2 may eventually need $15 million or more in repairs.
In early 2025, staff is bringing an item to the City Council to contract with Bay Ship & Yacht, Inc., who operates a shipyard in Alameda adjacent to Alameda Point at 2900 Main Street, to provide port management services for short-term berthing at Pier 2. The contract will likely include an agreement to make minor repairs to enable new short-term berthing to put the pier back in use and generate revenue.
Piers in the San Francisco Bay face extensive ongoing maintenance needs due to the extraordinarily corrosive nature of the maritime environment. The constant sedimentation at Alameda Point is estimated to be from 6 inches to 1 foot per year. Based on prior studies, regular dredging could result in an annualized cost of approximately $4 million per year. Staff is currently advancing a bathymetric study of current water depths, to estimate costs for dredging, as well as pier repairs necessary to ensure their long-term viability for berthing uses.
Planning and Uses in Landside Areas
The City’s Economic Development Strategic Plan (EDSP) identifies the goals to use the Alameda Point piers and adjacent landside areasfrom the waterfront to Orion Street, to establish a working waterfront with maritime and blue tech uses that creates significant new employment. This area is also mostly restricted in use to maritime activities as it is part of the City’s land that is in the State Lands Trust (Exhibit 2). The landside area between the piers and Orion Street includes 6 large warehouse buildings (#166 through #170 and #410) that are currently leased to tenants including Kai Concepts, MARAD, Matson, Pacific Pinball Museum, Power Engineering Construction, and Smith Denison Construction. NRC/Republic Services occupies waterfront buildings on the north side of Pier 1 for its maritime response services. WETA’s Central Bay Operations and Maintenance Facility, including berths for its ferry vessels, is located east of Pier 3.
In addition to the above buildings and sites currently in use, there is potentially up to 20 acres of more of land available to the east and northeast of the piers for use or development of new industrial buildings or structures for maritime and blue tech uses. This area includes approximately six smaller abandoned buildings left by the Navy that are no longer in use and will need to be demolished, including remediation of hazardous materials.
The Seaplane Lagoon area to the north of the piers is envisioned for development of a mixed-use waterfront district adjacent WETA’s Alameda Seaplane Ferry Terminal with service to San Francisco. This district, which is close to approved residential development and the proposed performing arts center, is envisioned to focus more on recreation and hospitality than the area closer to the piers. Plans for the north side of the Seaplane Lagoon include a continuation of the Seaplane Lagoon Promenade, next to future planned mixed-use development.
While the piers and surrounding areas are considered to be part of the “Enterprise District,” areas to the east of Orion Street, continuing onto Main Street/Central Avenue are envisioned for a broader diversity of job generating future development in research and development, life sciences, technology or other clusters, and is the area where the City intends to begin marketing property for development in early 2025. Its existing buildings house several tenants including Astra Space as well as temporary storage uses.
Definition of Maritime and Blue Tech Uses
The maritime sector generally includes the businesses and governmental agencies involved in the use of oceans and waterways, including shipping, marine engineering, ship repair, logistics, transportation as well as passenger transportation and recreational and visitor-oriented uses. Cargo shipping and related activities is usually the largest portion of the maritime sector.
Business at or adjacent to Alameda Point in the maritime sector include Alameda Community Sailing Club; Bay Ship & Yacht; MARAD; Matson; NRC/Republic Services; Power Engineering; Stacked Adventures Kayaking; USS Hornet Museum; and WETA. Besides Alameda Point, maritime activities in the Bay Area are focused at the Ports of Oakland, San Francisco, and Richmond, along with Mare Island, all of which have some combination of ship repair, drydock, and other support facilities. Maritime activities are subject to regulation by federal and state agencies, and federal funding is available for maritime facilities and dredging, primarily for ports and cargo-related activities.
Blue tech is a subset of the larger maritime sector focused on businesses that are engaged in research, development, and technological innovation related to environmental restoration and more sustainable uses of the ocean, harbors and waterways, and freshwater resources. Businesses at Alameda Point involved in blue tech include DOER Marine; Kai Concepts; Navier; and Saildrone. Besides these maritime-oriented businesses, Alameda Point is also home to other advanced technology firms in aerospace and sustainable energy. The Bay Area’s advantages of a highly skilled workforce, research institutions, expertise in research and development and prototyping, and venture capital funding create the potential to support new firms and substantial job growth in blue tech.
The limits of current scientific knowledge of ocean systems and habitats; potential new ocean resource use and extraction opportunities; and the need for adaptation to climate change and reduction in use of greenhouse gases means that blue tech is a focus for many in the maritime industry. For example, WETA’s commitment to create zero emission ferries means it is involved in development of high tech electric foiling boats. Offshore wind power generation creates a need for shore-based facilities to service its windmills.
Alameda Point maritime and blue tech tenants currently use waterfront facilities at Piers 1 and 3, as well as the Seaplane Lagoon. WETA has its own dedicated facilities and pier east of Pier 3 as well as at the Seaplane Lagoon. Some tenants use a small dock in the Seaplane Lagoon and its seaplane ramp for water access and make temporary arrangements for cranes when vessels need to be placed in or removed from the water.
DISCUSSION
The City’s EDSP (July 2018) states that, “Alameda should actively prioritize and pursue opportunities to support its existing maritime and blue tech businesses, recognizing that they are a core component of Alameda’s economy and community identity.” It further identifies suggested strategies including an action plan for job growth in the maritime sector; review of waterfront land use and zoning regulations to protect maritime uses; and increasing workforce preparedness for occupations in the maritime sector.
Also, the City’s draft Maritime Strategy, which is attached to this report, identifies investment in the piers as a major action item. Alameda Point’s piers are important maritime assets. Combining the water access they provide with existing and new landside buildings and sites creates an even greater opportunity to maximize benefits for existing Alameda maritime and blue tech firms, attract new businesses and nurture start-ups, and generate new jobs.
Enhancing and growing Alameda Point’s maritime and blue tech cluster and the potential of its setting involves a range of strategic considerations for the City, involved agencies, and current and future stakeholders and partners. These include but are not limited to defining goals; identifying stakeholders and potential partners, creating an organizational structure; securing funding; and planning timing and implementation. The following questions are a starting point for discussion:
• What activities are best handled by private parties, either through an existing or a new organization, and what activities should be led by the City’s Base Reuse and Economic Development Department?
• Who are the additional parties that need to be engaged in the fields of research and development, entrepreneurship, workforce development, and funding?
• What is the appropriate level of maintenance and use of Alameda Point maritime facilities, based on available funding? Do all facilities, e.g. Pier 2, need to be kept in usable condition? What additional facilities are needed, such as a potential new dock suitable for smaller vessels? What water depth should be maintained at the piers and turning basin?
• How can the City best leverage the investment in the piers or landside areas to help offset the costs of maintenance?
• Is there a way for the City to attract a physical incubator facility for maritime and blue tech uses at Alameda Point that offers low-cost space to start-ups, or a program offering a range of technical assistance for start-ups but no space for businesses? Is an incubator needed or worthwhile?
• What else should be considered in making decisions about future investments in Alameda Point’s waterfront and landside facilities in support of maritime and blue tech uses? What else would EDAP members want to know?
Strategic Opportunities
The San Francisco Bay Ferry, or WETA, will need to scale its facilities as it grows its ferry operations. The August 8, 2024 WETA Board meeting featured a workshop focused on its interest in expanding the Bay Area Maritime Industry. Discussion included:
• How to utilize the construction of its next generation of zero emission ferries to reestablish and expand shipbuilding in San Francisco Bay utilizing advanced materials, technologies, and construction (which would require changes in its federal funding that precludes geographic preferences). US shipbuilding capacity is constrained; and
• The Working Waterfront Coalition is an industry-led partnership working with employers and labor to expand career pathways in the maritime industry and has secured state funding for this work. It is working with the Ports of Oakland and San Francisco as well as the California State University Maritime Academy in Vallejo.
Three other West Coast ports have or are in the process of creating blue tech incubators:
• The Port of Seattle has created a Seattle Maritime Innovation Center in a 15,000 square foot building, now under construction and expected to open in late 2025. It will provide office space, fabrication space, event space, and location for an anchor tenant. Its $30 million development cost is being financed by the State of Washington and the Port, with operating costs covered through program fees and lease revenues.
• The Port of Los Angeles has opened AltaSea, a new non-profit public-private partnership dedicated to advancing blue tech and scientific collaboration with 180,000 square feet of incubator space and 45,000 square feet of science and education space. The campus is on a 35-acre campus at Berths 57 through 60 and has 4,100 lineal fee of dock space. It will include research, educational, and workforce development and be a new home to the existing Southern California Marine Institute focused on marine research. The cost will be covered by foundation funding, with $36 million from the Harbor Department, and $15 million from the State of California for its first phase.
• The Port of San Diego is not creating an incubator facility; however it is creating a Blue Economy Incubator that will facilitate pilot projects and early stage ventures through funding, use of Port-owned property, regulatory and permitting assistance, and communications and fund raising assistance. It seeks to create a portfolio of businesses involved in coastal resiliency, environmental protection, maritime decarbonization, ocean data, and aquaculture.
Alameda Point does not have the funding or staff resources of these ports, nor does it have the focus on expanding the waterfront industry to its own commercial gain. It does have the advantage of a Bay Area waterfront location, available piers, and large bay industrial buildings available for reuse (such as Building 5). The Bay Area has a depth of research institutions and numerous examples of incubators focused on high-tech as well as local economic development. There appears to be interest and potential for a maritime and blue tech incubator at Alameda Point, the question is how to convene Bay Area leaders, funders, and organization to define its potential and establish and operate it.
Next Steps
Staff is planning to conduct additional interviews with Alameda Point businesses and those involved in the maritime and blue tech sectors in the Bay Area and western US.
A central question for ongoing maritime use at Alameda Point, with significant one-time “catch up” cost implications for the City, is the water depth to maintain around the piers and turning basin, specifically whether to reestablish the 40 foot or more depth maintained by the Navy and required for MARAD and other larger cargo vessels, or a shallower depth from 20 to 30 feet for non-cargo vessels. Alameda Point piers and turning basins will require ongoing dredging every several years which represents an unfunded multi-million dollar expense for the City.
EDAP’s guidance for staff’s work, particularly on engagement with research institutions, funders, potential partners, and others will help shape and advance this work. Other concurrent staff work will update estimates of dredging, pier repair, and other maritime-related improvement costs. Assessment of how Alameda Point maritime facilities compete with other Bay Area ports, docks, and shipyard facilities and estimates for revenue generation will help the City understand the potential and issues for sustaining long-term operations. Work on the potential for Alameda Point to compete and obtain federal and State funding for dredging and maintaining maritime facilities would also inform these considerations. All of this work will inform consideration of the City’s future involvement with Alameda Point piers and the maritime and blue tech cluster, including the extent of potential funding and partner arrangements, or potentially a more limited role reliant upon third parties as described in the next section on Alternatives.
ALTERNATIVES
The City could undertake a more limited approach that makes the minimum required repairs to allow in the near-term ongoing short-term berthing at Pier 2 for vessels whose draft does not exceed 20’ - 25’ (or the limit established by an upcoming bathymetric study) and seek to use berthing fees to offset ongoing operating and repairs cost. The half of Pier 3 not used by the USS Hornet Museum could also be used for short-term berthing. Major repairs to piers and other major capital improvements would depend on securing outside funding for the work and/or leasing the piers to an organization that can assume the responsibility.
Vacant buildings and sites in the “working waterfront” area, and other spaces suited to blue tech start-ups, would be marketed by Alameda Point to maritime and blue tech tenants, with the City’s role limited to entering into long-term leases and/or sale of property.
Any effort to create a maritime and blue tech incubator would depend on identification of a private partner(s) who would assume responsibility for its funding, creation and operation, with limited City involvement other than possible use of land. The City’s preference is to locate this type of use in the State Lands Trust areas, where uses are more restricted, reserving other land at Alameda Point for uses that are not compatible with the State Lands Trust limitations.
FINANCIAL IMPACT
The financial impact of the study and other work described in this report, including recommendations from the Panel, is addressed in the current year Alameda Point budget. The financial impact of subsequent work, including the cost of repairs and capital improvements and the potential to generate revenues and attract funding, will be addressed in future years budgets.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The report is consistent with the Alameda Municipal Code and the Economic Development Strategic Plan and aligns with strategic plan recommendations for blue tech and maritime uses.
ENVIRONMENTAL REVIEW
This report does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required.
CLIMATE IMPACT
There is no climate impact from this report. Future increases in pier usage and improvement projects may result in to be determined climate activity.
RECOMMENDATION
Receive the Staff Report, and draft Maritime and Blue Tech Strategy, and provide guidance to staff.
Respectfully submitted,
Abigail Thorne- Lyman, Base Reuse and Economic Development Director
Exhibits:
1. Draft Maritime / Blue Tech Strategy for Alameda Point
2. State Lands Trust (“Tidelands”) Map