Title
Encinal Terminals Development Agreement Annual Review - Applicants: North Waterfront Cove, LLC. The applicants are requesting a periodic review of the Encinal Terminals Project Development Agreement. The consideration of an Annual Report is not a project under the California Environmental Quality Act (CEQA). No further environmental review is required.
Body
To: Honorable President and
Members of the Planning Board
From: Steve Buckley, Secretary to the Board
EXECUTIVE SUMMARY
Alameda Municipal Code (AMC) Section 30-95.1 requires the Planning Board to conduct a public hearing at which the applicant must demonstrate good faith compliance with the terms and conditions of the Encinal Terminals Development Agreement. North Waterfront Cove, LLC. has submitted a letter demonstrating their good faith compliance with the terms and conditions of the DA. (Exhibit 1)
Staff is recommending that the Planning Board approve the annual report and find that the Developers have complied in good faith with the terms and conditions of the DA. The Development Agreement can be found on the City of Alameda website at:
<https://www.alamedaca.gov/Departments/Planning-Building-and-Transportation/Planning-Division/Major-Planning-Projects>
BACKGROUND
On March 3, 2022, the City of Alameda (City) and North Waterfront Cove, LLC. (Developer) entered into a Development Agreement (DA) for the Encinal Terminals Project. This report provides a status on the activities associated with the DA and the status of the Project covering the annual review period from June 1, 2023 through May 31, 2024. The Developer has submitted letters demonstrating their good faith compliance with the terms and conditions of the DA. (Exhibit 1)
DISCUSSION
Since executing the DA in 2022, the Developers and the City have accomplished the following:
State Lands Exchange Agreement: The most important post-City-approval first step in this project was to complete the State Exchange Agreement, wherein the State would confirm the tidelands exchange conveyance process outlined in the Development Agreement and the Disposition and Development Agreement. Developer worked closely with the City and its counsel on the lengthy and complicated process with the State Lands Commission to complete the execution and recordation of the State Exchange Agreement; the State Exchange Agreement was executed and recorded in February 2023. Once the State Exchange Agreement was recorded, it allowed the City and Developer to commence with the two further actions that are required to allow the agreement to take full effect. First, the City and Developer have worked with the City's legislative consultant to propose legislation that will allow the State to convey to the City all of the parcels it receives in the exchange of tidelands properties. AB 1706 was later signed by the Governor in July 2023 allowing the conveyance of trust lands through an exchange agreement with the State Lands Commission. Secondly, in February 2024, the Alameda County Superior Court validated Encinal Terminals Exchange Agreement.
Permits and Approvals: Developer is obligated to complete all required local, regional, state, and federal permitting requirements necessary to begin site clearing and grading and begin site preparation and construction activities consistent with the Tidelands Exchange Master Plan phasing schedule. Preliminary work on the permitting effort commenced during the prior Annual Review Period, but Developer focused its efforts during the current Annual Review Period on completing the State Tidelands agreement components. With that process now complete, Developer's next focus will be on taking the steps necessary to begin securing permits.
Construction and Maintenance of Public Improvements: Developer is obligated to construct and maintain public improvements in the Public Trust as part of the Public Trust Exchange, consistent with the Tidelands Exchange Master Plan and its phasing schedule, including establishment of capital improvement reserves for maintenance of the Public Trust Lands in perpetuity. No work has commenced with regard to this obligation. The maintenance obligation may be assumed by a municipal services district (MSD), community facilities district (CFD) and/or a geologic hazard abatement district (GHAD) or similar financing mechanism. During the Annual Review period, in March 2024, the City and Developer agreed to a one-year extension to the obligation to form the CFD, modifying the deadline to March 2025.
Developer is currently seeking an amendment to the DA to extend the deadline to form a CFD beyond March 2025 due to economic factors negatively impacting development.
Development Timing: Developer is required to process its obligations to commence and complete development of the Project in a regular, progressive, and timely manner in accordance with the provisions and conditions of the DA, the Project Approvals, the Tidelands Exchange Master Plan construction phasing plan and schedule. The development process has not yet commenced.
Day One Public Access: Prior to the issuance of the first building permit for a residential building or vertical improvement, Developer shall provide a temporary Bay Trail around perimeter of the site for public use, consistent with the Tidelands Exchange Master Plan. Work towards completion of this obligation will occur once site improvement permits have been issued.
Affordable Housing: Prior to approval of the first final Map for the Project, Developer shall have received City Manager approval, in its reasonable discretion, of an Affordable Housing Agreement which is consistent with the requirements of the Master Plan and DA for the provision of eighty (80) affordable housing units. This agreement will be processed prior to Final Map approval.
Missing Middle Housing: Developer will also provide a total of ten (10) "missing middle" affordable by design units that will be provided to middle-income purchasers making between 120% and 180% of areawide median income. Prior to issuance of the first building permit or the first Final Map, whichever occurs sooner, Developer shall have received City Manager approval of an Affordable Housing Agreement. This agreement will be processed prior to Final Map approval.
Universal Design: Developer shall ensure that at least 50% of the units constructed meet the visitability and universal design requirements contained in the City's Universal Design ordinance, AMC Section 30-18. In addition, the City agrees to approve the necessary waivers to allow a 50% reduction in the 100% visitability requirement of the Universal Design ordinance, AMC Section 30-18. work towards compliance with this obligation will occur with the submittal of construction documents or the residential buildings.
Labor Peace Agreement: Developer is obligated to execute an agreement to provide for labor peace prior to any construction work commencing. In 2022, Developer entered into an agreement with the Building Trades Council of Alameda County for a portion of the residential construction that complies with Developer's obligations under this section. A future agreement covering the horizontal and commercial aspects of the site will be required prior to commencement of construction.
Reimbursement Of City Expenses: Developer has been reimbursing City for City’s part in completing the various agreements, including the costs associated with the City's legislative consultant and for City costs related to the validation action.
From staff’s perspective, Developers have complied in good faith with the terms and conditions of the DA for the period from June 1, 2023 through May 31, 2024.
ENVIRONMENTAL REVIEW
Development Agreement annual review is not a project as defined in the CEQA Guidelines Section 15378, therefore, no further action is required and none of the conditions of CEQA Guidelines Section 15162 requiring additional environmental review exist.
RECOMMENDATION
Approve the draft resolution (Exhibit 2) finding that the Developers have demonstrated good faith compliance with the terms and conditions of the Development Agreement.
Respectfully submitted,
Allen Tai
Planning, Building and Transportation Director
Exhibits:
1. Annual Report Letter from Developer
2. Draft Resolution Approving Annual Report