Title
Introduction of Ordinance Authorizing the City Manager to Execute a Lease for Building 11 with Science Corp., Located at 1190 West Tower Avenue, at Alameda Point, Alameda California, for a Term of 10 Years with Two Extension Options (for Five Years Each).
In accordance with California Environmental Quality Act (CEQA), this action is categorically exempt from further environmental review pursuant to CEQA Guidelines Section 15301 (Existing Facilities).(Base Reuse and Economic Development 29061822)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
Staff recommends that the City Council authorize the City Manager to execute a lease with Science Corporation (Science Corp) for Building 11 at Alameda Point for a term of ten years with two, five-year extension options. Science Corp is currently located in a smaller building on Atlantic Avenue in the Marina Village Business Park. The recommended lease will allow the growing company to expand its workforce and research and development activities to develop an implantable brain-machine interface that targets treating extreme disabilities, most notably blindness.
BACKGROUND
The City of Alameda (City) owns a former US Navy structure (Building 11) at Alameda Point. Building 11 is approximately 110,500 square feet in size and is located at 1190 West Tower Avenue. It was formerly occupied by Google and Makani. The building is now vacant.
In 2022, the City issued a Request for Proposals for potential tenants to re-occupy the vacant building. The City received six proposals for the building, including Science Corp’s proposal. Based upon a review of the proposals and the City’s leasing and economic development objectives for Alameda Point, staff initiated negotiations for a lease for the building with Science Corp.
Science Corp is a bio-technology company dedicated to solving some of medicine’s most difficult and persistent problems. The company is currently focused on developing treatments for many forms of currently untreatable blindness by combining an optogenetic gene therapy with a small implant in the eye. In 2015, approximately 1.02 million people were blind, and 8.2 million people had vision impairment, however these numbers are anticipated to double by 2050 with 2.01 million people being blind and 16.4 million people being vision impaired in the United States. The company hopes to adapt their treatment to combat other neurological diseases such as ALS, spinal cord injury, and stroke.
DISCUSSION
The recommended lease (Exhibit 1) will allow Science Corp to continue and expand its research, design and development of a brain-machine interface technology at Alameda Point. Science Corp will use Building 11 for medical device research and development, clean manufacturing and production, administration, assembly, machining, and warehousing. The company’s work requires use of a vivarium for live animals used in the research and development of the products, including mice, rabbits and non-ape primates, which are required for this type of research. The proposed uses for the building are consistent with General Plan policies for Alameda Point and the Adaptive Reuse subdistrict and consistent with the Alameda Municipal Code zoning requirements for the property.
This type of biotech research is highly regulated. To conduct their research, Science Corp holds permits and licenses from, and is annually inspected and reviewed by:
• United States Center for Disease Control and Prevention,
• United States National Institute of Health and Institutional Animal Care and Use Committee,
• United States Department of Agriculture,
• California Department of Public Health,
• California Department of Transportation,
• Alameda County Department of Environmental Health, and
• Alameda County Department of Toxic Substance Control.
The recommended lease commences January 1, 2024, for an initial term of 120 months (10-year), with an option for two, five-year extensions given that Science Corp provides a minimum of nine (9) months’ notice of its desire to extend and that no more than 25% of the property is sub-leased to nonaffiliated use.
The base rent is set at $1.10 per square foot per month ($121,617.10 per month), which then increases by three and a half percent (3.5%) annually for duration of the lease term. In the first year, the lease provides that Science Corp will receive a rent credit for up to $1,459,405.20 for expenses to improve the City owned building. All work on the property is subject to Prevailing Wage Law and requirements, and the City’s Project Labor/Stabilization Agreement Resolution. Science Corp will utilize union general contractors, recognizing prevailing wage requirements, to provide bids for the premises shell and tenant improvement work.
The lease establishes a lease premise and an allowable area on the West and South sides of the building (shown in Exhibit A-2 of the lease) that may be fenced and screened to provide a secure area for the temporary storage of materials and containers. The lease premise and fencing provisions are designed to ensure that outdoor storage of materials or containers is screened from public view and that significant view corridors, identified in the Waterfront Town Center Specific Plan are preserved on the west side of the building, from West Tower Avenue to the Seaplane Lagoon. All fences will be subject to review by the City for consistency with Design Review regulations and standards.
In conclusion, staff believes that Science Corp. will continue to provide high quality employment opportunities in Alameda and complement the growing community of advanced technology businesses at Alameda Point, such as Saildrone, Pyka, and others. The Science Corp lease will also facilitate significant improvements to a City-owned real estate asset and provide important lease revenue to the City, which may be used for a variety of much needed activities at Alameda Pont to improve infrastructure and maintain the existing historic building stock and cultural resources.
ALTERNATIVES
After opening the public hearing and considering all of the documents and testimony, City Council may consider three alternative courses of action, including:
• Approving the first reading of the ordinance authorizing the City Manager to execute a lease with Science Corp on the terms described in this staff report.
• Choosing not to approve the first reading and direct the City Manager to terminate negotiations with Science Corp. In this scenario, City Council should identify why Science Corp is not a suitable tenant for Alameda Point so that staff directs its pursuit of a new tenant that is suitable to the City Council.
• Choosing not to approve the first reading and direct the City Manager to continue negotiations with Science Corp. In this scenario, the Council should identify the specific lease terms or conditions that require further negotiation.
FINANCIAL IMPACT
The lease will contribute significant annual revenues (approximately $1.5 million annually) starting in year two and increasing by three and a half percent (3.5%) each year. These funds will be deposited into the Alameda Point Fund (Fund 290) and will assist with the operating expenses for City-owned Alameda Point properties and may also be allocated in part to funding the infrastructure requirements in the Alameda Point Master Infrastructure Plan.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The proposed uses for the building are consistent with General Plan policies for Alameda Point and the Adaptive Reuse subdistrict and consistent with the Alameda Municipal Code zoning requirements for the property. The recommended lease is also consistent with the 2023 Keyser Marston Property Disposition Framework Analysis.
ENVIRONMENTAL REVIEW
In accordance with CEQA, this action is categorically exempt from further environmental review pursuant to CEQA Guidelines Section 15301 (Existing Facilities).
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Hold a public hearing and approve the first reading of the ordinance authorizing the City Manager to execute a lease with Science Corp at 1190 West Tower Avenue, Building 11, at Alameda Point for a term of ten years with two, five-year extension options.
Respectfully submitted,
Abby Thorne-Lyman, Base Reuse and Economic Development Director
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibit:
1. Lease