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Positioning the Alameda Point Enterprise District for Future Development
Body
To: Members of the Mayor’s Economic Development Advisory Panel
EXECUTIVE SUMMARY
The Enterprise District of Alameda Point encompasses slightly more than 100 acres of land, south of West Atlantic Avenue, and west of Central Avenue. This area has been envisioned to accommodate large scale, job-generating development.
For decades, the City has undertaken various activities to attract new development. Most recently, the City approved a purchase option agreement and environmental documents to support a 220,000 square foot nuclear fusion demonstration facility with Pacific Fusion.
In September of this year, Pacific Fusion notified Alameda of their intent to proceed with constructing this facility in Albuquerque, New Mexico. As a result, City staff are now interested in repositioning the site to prepare for new development. Staff are interested in sharing lessons learned from the Pacific Fusion negotiation process, and seeking guidance of the Mayor’s Economic Development Advisory Panel on next steps to advance development.
BACKGROUND
The Enterprise District encompasses slightly more than 100 acres of land, south of West Atlantic Avenue and west of Central Avenue. This area has four of its own zoning designations (E-1, E-2, E-3, and E-4) which are described in the 2014 Alameda Point zoning ordinance amendment <https://www.alamedaca.gov/files/assets/public/v/1/departments/alameda/base-reuse/final-planning-documents/ap_zoning_ordinance_amendment_2014.pdf> and map <https://www.alamedaca.gov/files/assets/public/v/1/departments/alameda/base-reuse/final-planning-documents/alameda_point_zoning_ordinance_map.pdf> (Exhibit 1). The zoning is highly flexible, allowing for nearly any job generating use but prohibiting residential use, aside from a 100-foot “buffer” area. This area is home to several important Alameda businesses in the maritime industry including Power Engineering, Navier, Kai Concepts, and Republic Services. Astra, which is developing rockets and satellite engines, is currently located in the area as well and is the City of Alameda’s largest tenant, leasing a 190,000 square foot building.
Over the years, the City has made several attempts to attract large scale, job-generating uses to this area, including competing for a new University of California Lawrence Lab campus, issuing a Request for Proposals in 2019, and most recently, negotiating a purchase option agreement with Pacific Fusion, for construction of a 220,000 square foot nuclear demonstration facility.
For the 2019 initiative, the City decided to focus on a smaller subset of the 100+ acre area, which is a 24-acre property bounded by West Pacific Avenue, Orion Street, West Ticonderoga Street, and Central Avenue. This area was selected because it would create a logical loop of backbone infrastructure more easily connecting in two points to existing water lines on Central Avenue, and to the Alameda Municipal Power electrical substation on West Atlantic Avenue. This was also the area considered by Pacific Fusion in 2024-2025, and the City entered into a purchase option agreement <https://alameda.legistar.com/LegislationDetail.aspx?ID=7428996&GUID=158DC13D-894E-4285-83E9-AC55E080F5DB&Options=&Search=> (Exhibit 2) for an initial 13-acre subarea just to the west of Skyhawk Street, with an option to negotiate the purchase of the remaining 11 acres between Skyhawk and Central Avenue once the initial phase was advanced.
For the Pacific Fusion development, the City was competing with the City of Livermore to accommodate the nuclear demonstration facility. In June 2025, Pacific Fusion notified the City that it had been approached by the State of New Mexico to consider locating its facility there, and in September 2025, Pacific Fusion announced its intention to build its facility in Alburquerque, which provided over $770 million in incentives. Pacific Fusion formally issued its notice to terminate the option shortly thereafter.
DISCUSSION
City staff are now interested in repositioning the site to prepare for new development. Staff are interested in sharing lessons learned from the Pacific Fusion negotiation process, and seeking guidance of the Mayor’s Economic Development Advisory Panel (EDAP) on next steps to advance development. Specifically, how can the City position the property to best take advantage of private development opportunities, and leverage what has been learned from the Pacific Fusion development process?
August 2024 EDAP Discussion
EDAP last discussed this item at its August 2024 meeting, and the recommendations from that meeting are attached as Exhibit 3. Generally, the feedback from EDAP at the time was to be opportunistic and aggressive in marketing, be flexible and allow zoning to dictate the approved use rather than prescribing the use and send a clear message about the uses that the City is interested in pursuing.
Work Completed During the Pacific Fusion Approvals Process
Through the Pacific Fusion process, the City has a far greater technical understanding of the site which could be beneficial to future development processes, including the following:
• Established price and terms: the City Council has already agreed to price and terms with another party in the current market, including the terms for delivery of offsite infrastructure.
• A backbone infrastructure package (Exhibit 4): much of the negotiation with the Pacific Fusion team centered around “right sizing” the necessary water, sewer, stormwater, street and dry utility requirements to fit the agreed upon price for the land. This required the Public Works department and the City’s consulting civil engineer to determine, for example:
o Identifying priority backbone streets for development; namely, improving West Pacific Avenue and Orion Streets is critical for supporting any future development in the area. Additionally, through this process, the City reaffirmed its decision to abandon West Oriskany Street, to the east.
o Determining that it would be possible to utilize the existing sewer system, rather than building the new sewer pump that will ultimately be required in the Master Infrastructure Plan. To address this question, Pacific Fusion’s developer conducted scans of the existing sewer and stormwater lines connecting from the site to the current sewer pump station that is near West Atlantic Avenue. These scans could be beneficial to a future developer.
• A CEQA checklist: The Alameda Point EIR from 2014 provides environmental clearance for most uses that would be considered in the Enterprise District. At the June 17, 2025 City Council meeting, the Council adopted CEQA findings specific to the Pacific Fusion, finding that no additional environmental work must be performed. This finding was based in part on additional technical analysis on subject such as traffic, noise, vibrations and environmental impacts, which could be beneficial to a future development.
o Subsequent to the Alameda City Council approval, Governor Gavin Newsom signed AB 130 and SB 131 on June 30, which provide additional streamlining provisions. In its approvals of the project in August 2025, the City of Livermore utilized the streamlining provisions of SB 131 for advanced manufacturing uses, which they argued circumvented their need for any further environmental analysis for a nuclear fusion facility. It is possible that - depending on the use, SB 131 could offer an even simpler process than the CEQA checklist that the City of Alameda undertook. However, staff would need to evaluate this on a case-by-case basis.
• Petroleum Groundwater Monitoring: The Enterprise District has a variety of underlying environmental conditions which are regularly monitored by the City through its Site Management Plan and overseen by the Regional Water Quality Control Board (Water Board), State Department of Toxic Substances Control (DTSC), and the federal Environmental Protection Agency (EPA). Specifically, the Pacific Fusion site includes a petroleum site which requires ongoing groundwater monitoring by the Navy, as well as tarry refinery waste from the property’s pre-Navy use as an oil refinery. To accommodate the Pacific Fusion development the City worked with the Navy and regulatory agencies to propose relocation of the Navy’s groundwater monitoring wells, which was an approximate 3-week process. Through this, the City and its partner agencies proved their ability to work flexibly with developers to ensure the groundwater monitoring requirements could be accommodated around future building structures.
• Tarry Refinery Waste: Chevron is the designated party responsible for remediation of the tarry refinery waste, which is on a small northern portion of the site. The City and Water Board have worked with Chevron for years to develop a remediation plan. This was a point of frustration for the City and Pacific Fusion during the development process, as Chevron missed its deadlines for submittal of its Corrective Action Plan. Unfortunately, the media generated through this process also reinforced Alameda Point’s undeserved reputation that the sites are too toxic for development (a message reflected back to City staff through several nonrelated conversations with private parties). In August, Chevron accelerated its work to submit its corrective action plan for remediation of the tarry refinery waste to the Water Board and has submitted a proposal for ongoing groundwater monitoring. City staff are optimistic that the remediation schedule is back on track, with the expectation that remediation would occur in early 2026.
City Staff Reflections
Following are some of staff’s reflections on what was learned from the Pacific Fusion process:
• The City of Alameda can move quickly and support business: Staff are proud of the pace at which the City was able to complete the work for Pacific Fusion:
o The Exclusive Negotiating Agreement was completed within four weeks.
o The Purchase Option, including a purchase and sale agreement, was completed within four months.
o The CEQA checklist was also completed within four months.
o The City Council was supportive every step of the way, providing political direction to aggressively move the project forward, and sending the message that nuclear fusion is an innovation that Alameda would generally welcome.
• Educating businesses that are not in the real estate sector is a major challenge to attracting a new, single-tenant campus. City staff spent countless hours with the highly talented Pacific Fusion team to walk through the very complex process of purchase options, Council approvals, infrastructure and CEQA. Pacific Fusion hired an expert real estate developer (Hines) to help foster the process, but there were still moments when Pacific Fusion expressed frustration with the City’s process and the general work required for the transaction. While the City worked hard to streamline the process, the reality is that even a “simple” process is complex in the eyes of a technology startup which is used to a much faster pace.
• Alameda’s greatest competitive advantages to attracting new businesses are its quality of life, and AMP. Participating in a competitive process with other Cities helped staff better understand Alameda’s competitive advantages. The central location, bustling restaurant scene, and great schools and places to live were a major draw for Pacific Fusion. Anecdotally, staff heard that employees of Pacific Fusion were most drawn to Alameda for these reasons even though the City could not financially compete. Additionally, the City was able to pull AMP into the conversation, and the City’s ability to deliver electricity faster, and more than 40% cheaper than PG&E was a major selling point for Pacific Fusion.
It is important to note that there are several members of EDAP who also played important direct and indirect roles in supporting this development process, and staff encourages EDAP members to share their reflections from the roles they played during the discussion as well.
Recommendation
This item is for discussion purposes only. No action is recommended.
Respectfully submitted by,
Abigail Thorne-Lyman
Director of Base Reuse and Economic Development
Exhibits
1. Zoning Ordinance Map, Amendment, and Use Table
2. Purchase Option Agreement with Pacific Fusion
3. Summary of EDAP Feedback on the Enterprise District from August 2024
4. Backbone Infrastructure Package Developed for the Pacific Fusion Transaction