Title
Recommendation to Approve an Exclusive Negotiation Agreement between the City of Alameda and Alameda United Commercial LLC for the Bachelors Enlisted Quarters. (Base Reuse 819099)
Body
To: Honorable Mayor and Members of the City Council
From: John A. Russo, City Manager
Re: Approve an Exclusive Negotiation Agreement between the City of Alameda and Alameda United Commercial LLC for the Bachelors Enlisted Quarters
BACKGROUND
Now that the City owns significant portions of Alameda Point and has completed major entitlements for the property [i.e., Environmental Impact Report, Zoning Ordinance Amendment (ZA), and Master Infrastructure Plan (MIP)], City staff is focused on facilitating near-term construction at Alameda Point, which has the potential of generating thousands of jobs, millions of dollars in tax revenue, and over a thousand housing units. Additionally, the regional economy is currently very strong and it is important that the City take advantage of the favorable market conditions and start to make the community's vision for Alameda Point a reality.
In the interest of attracting new investment to Alameda Point, the City issued request for qualifications from developers for two sites within new development areas, as well as continues to pursue commercial and residential leasing as well as development opportunities within the Naval Air Station Alameda (NAS Alameda) Historic District. City staff and its leasing agent, Cushman & Wakefield, are often approached by businesses and developers interested in leasing and development opportunities at Alameda Point. In fact, many of the existing leases at Alameda Point, including the successful food and beverage manufacturing businesses within the NAS Alameda Historic District, are the result of favorable responses by the City to inquiries from interested businesses and developers.
City staff was approached by Alameda United Commercial LLC, in conjunction with Salvatore Caruso Design Corporation, a developer/design team (AUC Team) for a number of sites at Alameda Point, including the renovation of the Bachelors Enlisted Quarters (BEQ) and a 5.5-acre parcel along the taxiways adjacent to the Seaplane Lagoon both within the NAS Alameda Historic District. This staff report pertains to the AUC Team's proposed renovation of the BEQ, three buildings (Buildings 2, 3, and 4) comprised of 500,000 square feet of former barracks and mess hall buildings in the administrative core of the NAS Alameda Historic District (Exhibit 1). The BEQ is currently vacant and has been vacant (with the exception of one wing) since the NAS Alameda was decommissioned in 1997.
DISCUSSION
The AUC Team proposes renovating the BEQ for a combination of assisted senior living, independent senior living, student housing, and office space consistent with the ZA and MIP. City staff recommends exploring the AUC Team's qualifications and development proposal in greater depth as part of an Exclusive Negotiation Agreement (ENA) between the City and the AUC Team (Exhibit 2). The ENA is intended to result in an approved Disposition and Development Agreement (DDA) (i.e., price and terms of payment for the land and development obligations), and an approved Development Plan (i.e., detailed development plan, building footprints and massing, if applicable, landscape concepts, and a phasing plan). The following provides a summary of the key terms of the proposed ENA:
1. Deposit. The ENA requires a $250,000 deposit for City staff and consultant costs, which becomes non-refundable throughout the term of the ENA at a rate of $50,000 per month with the full deposit becoming non-refundable at the end of the initial term.
2. Statement of Qualifications. The ENA requires the AUC Team to submit a statement of qualifications (SOQ) within 30 days of the effective date of the ENA that demonstrates significant relevant project experience, including photos, site plans, cost and financial information, staffing, and references of completed projects for projects relevant to the BEQ renovation. The City Manager then has 30 days to review the sufficiency of the SOQ. If the City Manager deems the SOQ insufficient, the ENA terminates and the City returns the full deposit to the AUC Team. The more detailed SOQ requirements are included as Exhibit C to the ENA.
3. Term. The ENA period is contemplated as a compact 6-month process. The ENA allows for two three-month administrative extensions by the City Manager.
4. Land Price. The non-binding letter of intent attached to the ENA as Exhibit B contemplates a $388,000 per acre land price for the BEQ. However, the ultimate land price will be subject to further negotiations during the ENA process.
5. Developer's Responsibilities. The developer's responsibilities during the ENA process include: establishing a fair, effective, and collaborative partnership with the City and Alameda community; submitting an SOQ; negotiating and obtaining approval of a DDA for the BEQ, including submittal of supportive documents, such as a proforma and financing plan; and preparing and obtaining approval of a Development Plan for the BEQ.
6. City Responsibilities. The City's responsibilities during the ENA period include negotiating exclusively and in good faith with the developer regarding a DDA for the BEQ, and actively participating in the preparation of the Development Plan by developer for the BEQ and considering approval of the Development Plan application, if completed, during the ENA process.
FINANCIAL IMPACT
The approval of the ENA will not impact the General Fund or Base Reuse Department budgets (Fund 858).
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The ENA implements the Alameda Point Zoning Ordinance (Section 30-4.24 of the Alameda Municipal Code).
ENVIRONMENTAL REVIEW
This ENA is not subject to the California Environmental Quality Act ("CEQA") as it is not a project as defined in CEQA Guidelines section 15378 and therefore will not result in a physical change to the environment pursuant to CEQA Guidelines section 15060(c)(2).
RECOMMENDATION
Approve an Exclusive Negotiation Agreement between the City of Alameda and Alameda United Commercial LLC for the Bachelors Enlisted Quarters.
Respectfully submitted,
Jennifer Ott, Chief Operating Officer - Alameda Point
Financial Impact section reviewed,
Fred Marsh, Finance Director
Exhibits:
1. Map Depicting Bachelor Enlisted Quarters (Buildings 2, 3, and 4)
2. Exclusive Negotiation Agreement between the City of Alameda and Alameda United Commercial LLC