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Summary Title: Set Public Hearing to Consider Expansion of Territory and Municipal Services for Financing District at Alameda Landing Development and Levy of Corresponding Special Tax
Adoption of Resolution of Consideration to Alter the Municipal Services to be Financed by Community Facilities District No. 13-2 (Alameda Landing Municipal Services District); and Adoption of Resolution of Intention to Annex Territory to the City of Alameda Community Facilities District No. 13-2 (Alameda Landing Municipal Services District) and to Authorize the Levy of Special Taxes Therein. (Community Development 256)
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To: Honorable Mayor and Members of the City Council
From: John A. Russo, City Manager
Re: Recommendation to Adopt a Resolution of Intention to Annex Territory to Community Facilities District No. 13-2 (Alameda Landing Municipal Services District) and to Authorize the Levy of Special Taxes on the Property to be Annexed, and Adopt a Resolution of Consideration to Alter the Municipal Services to be Financed by Community Facilities District No. 13-2.
BACKGROUND
On February 4, 2014, the City Council adopted Resolution No. 14888 pursuant to which it formed the City of Alameda Community Facilities District No. 13-2 (Alameda Landing Municipal Services District) (CFD). The CFD was formed to allow for the financing of various municipal services that the City is obligated to provide to Phase 1 of the Alameda Landing project, including maintenance of public infrastructure improvements and the provision of police and fire services.
The Alameda Landing Disposition and Development Agreement (DDA) requires Catellus Alameda Development, LLC (developer) to commence construction on Phase 2 of the project by December 31, 2017. In anticipation of that obligation, developer has requested that the City take action to annex that property to the existing CFD 13-2. In anticipation of the annexation, the developer would also like to add to the services that can be financed by the CFD.
A long-standing City policy regarding redevelopment of former military property requires that the conversion to civilian reuse is fiscally neutral to the City's General Fund. Therefore, CFD 13-2 was established to provide a funding mechanism to pay for the on-going maintenance and operation of the public infrastructure built as part of the Alameda Landing project. CFD 13-1 levies an assessment on all of the Phase 1 property owners to cover the cost of on-going maintenance of City-owned public improvements. It is now proposed to annex Phase 2 land to CFD 13-2 and finance the maintenance of additional City-owned infrastructure to be built as part of the Phase 2 project. The DDA provides that the City will establish a CFD if the developer requests. The developer is obligated to pay the cost of establishing the CFD.
Adopting the resolutions referenced in this staff report sets a public hearing on April 21, 2015, to consider annexing the Phase 2 land, and adding public services to be financed, to the existing CFD 13-2.
DISCUSSION
On February 4, 2014, the City Council adopted a resolution forming CFD 13-1, which includes the property within Phase 1 of Alameda Landing, and authorizing the City to levy special taxes on property located in the CFD to pay the costs of municipal services. A community facilities district is a defined geographic area in which the City is authorized to levy annual special taxes to be used to pay costs of municipal services provided to the area, as well as to pay costs of administration of the community facilities district.
The developer has now requested that the City annex the 40 acres in Phase 2 of Alameda Landing into the CFD. The developer would also like to add to the services authorized to be financed by the CFD, so that the CFD can finance municipal services for the area in Phase 1, as well as for the 40 acres in Phase 2. New services to be financed include the on-going cost of maintaining the public waterfront park, extended Mitchell Avenue, and Phase 2 backbone infrastructure.
Property Annexation
In order to annex property to the CFD, Section 3-70.59 of the City's Municipal Code requires that the City Council adopt a resolution of intention to annex the property, which resolution must set a time and place for a public hearing. The boundary map for the area proposed to be annexed to the CFD is attached as Exhibit 1. The Resolution of Intention to Annex Territory to the CFD sets April 21, 2015, as the date for a public hearing. It is expected that the special tax rates for property in the current CFD will apply, without any changes, to the territory to be annexed to the CFD.
On April 21, 2015, following the public hearing on the annexation, the City Council then must call for an election of the owners of property in the area to be annexed. If two-thirds of the votes cast at the election (weighted by the number of acres each property owner owns in the area to be annexed) are in favor of the annexation, the City Council can then adopt a resolution canvassing the election and confirming the annexation of the property to the CFD.
Adding Services to be Financed
In order to add to the municipal services to be financed by the CFD, Section 3-70.49 of the City's Municipal Code requires that the City Council adopt a resolution of consideration specifying the changes to the services eligible to be financed by the CFD, and set a time and place for a public hearing. The Resolution of Consideration for the CFD sets April 21, 2015, as the date for the public hearing on the proposed change to the CFD.
On April 21, 2015, following the public hearing on the proposed changes to the CFD, the City Council must then call for an election of the owners of property in the area currently included in the CFD. If two-thirds of the votes cast at the election (weighted by the number of acres each property owner owns in the CFD) are in favor of the changes to the services to be financed by the CFD, the City Council can then adopt a resolution canvassing the election and confirming the ability of the CFD to finance the additional services.
Conclusion
If the City Council adopts the two Resolutions referenced in this staff report, it is expected that on April 21, 2015, the City Council will hold the public hearings on the annexation of property to the CFD and on the changes to the services to be financed by the CFD. Following the public hearings, the City Council would then take the actions needed to complete the annexation process, as well as to authorize the CFD to finance additional services, including the conduct of two elections, one of the owners of property currently in the CFD (with respect to the change in the services the CFD can finance), and one of the owners of property in the area to be annexed to the CFD (with respect to the annexation proceedings).
FINANCIAL IMPACT
Annexing Alameda Landing Phase 2 to CFD 13-2 has no impact on the General Fund. All costs related to the annexation of territory to the CFD, and the other modifications being made to the CFD, are being paid by the Developer in connection with its obligations under the DDA and 2007 Development Agreements. The annual costs to administer the CFD will be paid for from annual special taxes levied on property included within the boundaries of the CFD.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The Municipal Code currently contains, in Section 3-70, the City of Alameda Special Tax Financing Improvement Code pursuant to which the CFD was formed, and pursuant to which the annexation and change in services to be provided by the CFD are being processed.
ENVIRONMENTAL REVIEW
On December 5, 2006, the City Council certified the Final Environmental Impact Report for the Alameda Landing Mixed Use Development Project (a Supplement to the 2000 Catellus Mixed-Use Development Project EIR) in accordance with the California Environmental Quality Act (CEQA) (State Clearinghouse #2006012091). The City approved a First Addendum to the EIR in 2007, a Second Addendum to the EIR in 2008, and a Third Addendum to the EIR in 2012. The Third Addendum approved in January 2012, evaluated the potential impact of the proposed changes to the approved Retail Center Development Plan and the Street Plan. The intention to annex territory CFD 13-2 and to authorize the levy of special taxes on the property to be annexed, and for the CFD to provide additional municipal services, are consistent with the prior approvals and will not result in any new or substantially more severe environmental impacts than were previously identified in the Supplemental EIR and addenda.
RECOMMENDATION
Recommendation to adopt a resolution of intention to annex territory to Community Facilities District No. 13-2 (Alameda Landing Municipal Services District) and to authorize the levy of special taxes on the property to be annexed, and adopt a resolution of consideration to alter the municipal services to be financed by Community Facilities District No. 13-2.
Respectfully submitted,
Debbie Potter, Community Development Director
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Boundary Map for Territory to be Annexed to CFD 13-2