Title
Adoption of Resolution Declaring Intention to Form City of Alameda Community Facilities District No. 25-1 (West Midway Facilities), and to Authorize the Levy of a Special Tax Therein to Finance Public Facilities in and for Such Community Facilities District;
Adoption of Resolution Declaring Intention to Incur Bonded Indebtedness to Finance the Acquisition and Construction of Certain Public Facilities in and for City of Alameda Community Facilities District No. 25-1 (West Midway Facilities); and
Adoption of Resolution Declaring Intention to Annex Territory to Community Facilities District No. 17-1 (Alameda Point Public Services District) and to Authorize the Levy of Special Taxes Therein. (Public Works 281)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
The purpose of this report is for City Council to consider commencement of legal proceedings to form a Community Facilities District (Facilities CFD) to finance certain public infrastructure, to authorize the City of Alameda (City) to incur bonded indebtedness for the Facilities CFD, and to annex property into the existing Alameda Point Services CFD 17-1 to finance certain municipal services for the West Midway development located in the Main Street Neighborhood Specific Plan area of Alameda Point.
BACKGROUND
On May 22, 2023, the Planning Board approved the Development Plan for a residential mixed use development consisting of 478 new housing units, up to 10,000 square feet of non-residential uses and associated streets, infrastructure, utilities, and open space on approximately 26-acre of land immediately adjacent to the 8-acre RESHAP project site in the Main Street Neighborhood Specific Plan area of Alameda Point (West Midway Project).
On July 18, 2023, City Council approved the Disposition and Development Agreement (DDA) for the West Midway Project. The DDA establishes a contractual relationship between the City and BC West Midway, LLC (Developer), for the development of the 26-acre site and associated infrastructure. The DDA also establishes the schedule and financing of certain public infrastructure and conveyance of the site to the Developer for eventual sale to future homeowners and property owners in the West Midway neighborhood.
On November 1, 2024, the Developer requested the formation of a Facilities CFD to finance certain public infrastructure including various public streets within the development as contemplated by the DDA. The Developer is also required by project conditions and as defined in the DDA to be annexed into the existing Alameda Point Services CFD 17-1 to finance annual public services and Transportation Demand Management services and programs associated with the development. City staff, working with City consultants and the Developer, have now prepared the City Council resolutions that commence the legal proceedings to form a Facilities CFD, to authorize the City to incur bonded indebtedness for the Facilities CFD, and to annex into Services CFD 17-1.
The City has established several CFDs in the past to finance various public improvements and public services, most recently for the Alameda Marina project. A CFD allows for the annual levy of a special tax on property in a designated area to pay costs of administrating the CFD, and the payment of costs of public facilities or services the CFD is authorized to finance (as well as the payment of debt service on bonds issued for the CFD to finance public facilities).
DISCUSSION
Community Facilities District No. 25-1
The two Resolution of Intention (ROI) are the first steps in the process of forming the Facilities CFD. Alameda Municipal Code (AMC) Sections 3-70.25 and 3-70.81 require that the City Council, by resolution, must include the following three steps: 1) deem it necessary for a proposed community facilities district to incur bonded indebtedness; 2) state the amount of the proposed debt, the purpose for which the proposed debt is to be incurred; and 3) provide the time and place for a hearing by the City Council on the proposed debt issue.
To meet the three step requirements of AMC Section 3-70.25 and 3-70.81, both resolutions declare the City’s intention to establish CFD 25-1 (West Midway Facilities) and to fund necessary public improvements in an amount not-to-exceed $35 million thereby satisfying the first two requirements. This financing represents a portion of the total capital costs to be spread throughout the project, while $26 million represents the share of capital costs for the first phase of the residential development and the balance of the capital funding ($9 million) will be spread throughout the remaining project by future annexation(s).
Exhibit B to the ROI describes the public facilities that would be eligible for funding by CFD 25-1. These facilities include improvements to West Midway Avenue, Main Street, West Tower Avenue, Pam Am Way, Ardent Way, Orion Street, Skylark Street, and Waves Avenue.
In addition, the ROI establish the Rate and Methods of Apportionment (RMA) of special taxes to be levied on property owners within CFD 25-1 to ensure the special taxes are allocated equitably. The overall maximum effective tax rate was established with the DDA for this project and should not exceed 1.8% and the project is proposing the maximum special tax rate in the RMA accordingly. A sample tax bill (Exhibit 3) shows the proposed tax rate for this project.
To meet the third requirement, the ROI calls for a public hearing to be set for September 2, 2025, and contains notices of the public hearing to be published by the City Clerk. The purpose of the public hearing is for City Council to formally consider the formation of CFD 25-1 and hold an election concerning the approval of the special taxes and the need to incur bonded indebtedness not-to-exceed the stated limits for CFD 25-1. If approved by a landowner vote election, special taxes for the Facilities CFD would be levied on property owners within CFD 25-1 in accordance with the proposed RMA to fund debt service on any bonds issued by the City for CFD 25-1.
Attached as Exhibit 1 is the boundary map for the proposed CFD 25-1. The boundary map illustrates the area (Improvement Area No. 1) to be included in the Facilities CFD, which represents the first phase of the West Midway Project. The boundary map also illustrates a future annexation area that may be annexed to the Facilities CFD by landowner consent, should the Developer later request the area to be added to CFD 25-1.
Community Facilities District No. 17-1
The ROI to annex is required to annex into CFD 17-1 (Alameda Point Public Services District) as required by AMC Section 3-70.59, the resolution declares the City’s intention to annex land into CFD 17-1.
The ROI to annex and associated exhibits describes the boundary of the existing CFD and references a map of the area proposed to be annexed; describes the services that will be eligible to be funded by the CFD; sets forth the RMA of special taxes to be levied on property owners within the CFD; provides for a public hearing on the proposed annexation at the next City Council meeting on September 2, 2025, and contains notices of the public hearing to be published by the City Clerk.
Attached as Exhibit 2 is the annexation map for the area to be annexed into CFD 17-1, which represents the first phase of the West Midway Project. The remaining portion of the project will be annexed separately at a later date.
If City Council adopts the ROI to annex into CFD 17-1, it is expected that on September 2, 2025, City Council will hold the public hearing called pursuant to the ROI, and then take action needed to complete the CFD annexation process, including conducting an election of the owners within the annexed area with respect to the annexation into CFD 17-1 and the levy of special taxes on property in the CFD.
ALTERNATIVES
City Council can consider the following alternative actions:
• Approve the resolutions commencing the proceedings for CFD formation and annexation (as recommended by City Staff).
• Amend the parameters of the CFD formation and/or annexation as reflected in the resolutions.
• Delay commencement of CFD formation and/or annexation.
• Not approve the formation of the Facilities CFD but still proceed with the annexation into the Alameda Point Services CFD.
FINANCIAL IMPACT
There is no impact on the General Fund in declaring the City's intention to form and issue bonds for CFD 25-1 and in declaring the City’s intention to annex territory to CFD 17-1. All costs related to the formation of CFD 25-1 and annexation to CFD 17-1 are paid by the Developer in connection with its obligations under the Deposit and Reimbursement Agreement or will be paid from the proceeds of bonds that the City may issue for CFD 25-1. The annual costs to administer both CFDs and any bonds issued for CFD 25-1 are paid from annual special taxes to be accounted for in a special fund and to be levied annually on property owners within the boundaries of the CFDs.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The AMC sets forth, in Section 3-70, the City of Alameda Special Tax Financing Improvement Code pursuant to which the proposed CFD is being formed.
General Plan Policy, LU-19, is to implement an Alameda Point Main Street Neighborhood Mixed-Use District.
ENVIRONMENTAL REVIEW
This action 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 are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
1. Adopt a Resolution declaring intention to form City of Alameda Community Facilities District No. 25-1 (West Midway Facilities), and to authorize the levy of a special tax therein to Finance public facilities in and for such community facilities district.
2. Adopt a Resolution declaring intention to incur bonded indebtedness to finance the acquisition and construction of certain public facilities in and for City of Alameda Community Facilities District No. 25-1 (West Midway Facilities).
3. Adopt a Resolution declaring intention to Annex Territory to Community Facilities District No. 17-1 (Alameda Point Public Services District) and to authorize the levy of special taxes therein.
Respectfully submitted,
Erin Smith, Public Works Director
By,
Kan Xu, Senior Engineer
Financial Impact section reviewed,
Ross McCarthy, Finance Director
Exhibits:
1. Boundary Map for CFD 25-1, Improvement Area No. 1
2. Annexation Map for CFD 17-1, Annexation No. 2
3. Sample Tax Bill