Title
Adoption of Resolution Approving the Updated Seaplane Lagoon Ferry Terminal Plan Resulting in the Procurement of the Ferry Terminal Float and Construction of the Remaining Water and Landside Improvements. (Base Reuse 819099)
Body
To: Honorable Mayor and Members of the City Council
From: David L. Rudat, Interim City Manager
EXECUTIVE SUMMARY
The Seaplane Lagoon Ferry Terminal Project is an important part of the transportation strategy for minimizing transportation impacts related to the Site A development at Alameda Point and is also a critical asset for the Water Emergency Transportation Authority (WETA) to increase service in the Transbay corridor. This report recommends updates to the Seaplane Lagoon Ferry Terminal Plan that were approved by the City Council in 2016 to reflect updated designs, funding and schedule. The City Council approval tonight will result in the procurement of the ferry terminal float and construction of the remaining water and landside improvements to meet important project deadlines for commencement of new service in the first quarter of 2020.
BACKGROUND
On June 16, 2015, the City Council approved a Disposition and Development Agreement (DDA) with a private developer, Alameda Point Partners, LLC (APP), for the Site A development at Alameda Point, consisting of a 68-acre mixed-use project at the gateway of Alameda Point. As part of the backbone infrastructure included with the Phase 1 development of Site A, APP and the City agreed to cooperate in the design, permitting and construction of a new ferry terminal at Seaplane Lagoon (Seaplane Lagoon Ferry Terminal), and APP agreed to contribute $10 million towards its development. Consistent with the DDA, the City is responsible for obtaining third party permits and approvals necessary for construction and operation of the Seaplane Lagoon Ferry Terminal, and APP is obligated to complete the construction of the new terminal.
In accordance with the DDA [Article 5.2(b)(1) through (3)], a Ferry Terminal Plan shall be developed with a reasonable conceptual design and the parties’ best estimate of the schedule and costs based on available information. On April 5, 2016, the City Council approved the Ferry Terminal Plan (Exhibit 1) and a Memorandum of Understanding (MOU) between the City of Alameda and the Water Emergency Transportation Authority (WETA) (Exhibit 2) to provide a framework for collaboration on funding and operations of the Seaplane Lagoon Ferry Terminal, which was then estimated to cost approximately $18.2 million. The MOU outlined that WETA was responsible for obtaining funds for operations and the procurement of the required vessels and the City was responsible for securing sufficient funds for the development of the new Seaplane Lagoon Ferry Terminal. Both parties agreed to cooperate with each other in obtaining funds for these purposes.
The following provides a summary of the progress made since the City Council approved the Ferry Terminal Plan in April 2016:
• In June 2016, City staff submitted conceptual designs for the Seaplane Lagoon Ferry Terminal to the Bay Conservation Development Commission (BCDC) Design Review Board (DRB) for review of the design and public access elements. The DRB supported the design at that time with recommendations for a canopy and other interactive elements on the promenade outside the ferry and to proceed with final approval with no additional DRB review.
• In October 2016, WETA approved the procurement of the necessary vessels to expand service in the Central Bay, including Seaplane Lagoon, and approved the WETA Strategic Plan, which envisions 15-minute ferry service to and from San Francisco from the west end of Alameda (Main Street and Seaplane Lagoon Ferry Terminals).
• In March 2017, the City was awarded an $8.2 million grant for the construction of the Seaplane Lagoon Ferry Terminal for the upcoming Fiscal Year (FY) 2019-20 from the Alameda County Transportation Commission (ACTC), resulting in a total of $18.2 million in funding for the Seaplane Lagoon Ferry Terminal.
• On March 6, 2018, the City Council authorized the City Manager to enter into an agreement with Marcy Wong Donn Logan (MWDL) Architects and their consultant team for architectural and engineering services for the design of the Seaplane Lagoon Ferry Terminal in advance of the closing of Site A to meet the design and permitting timeline for construction completion in FY 2019-20.
• On March 15, 2018, the City transferred land for Phase 1 of Site A to APP. At closing, APP provided a promissory note for $10 million for permit, design and construction costs of the Seaplane Lagoon Ferry Terminal, including associated parking and landside improvements.
• Between April and July, 2018, the City obtained all required City approvals from the Planning Board and Historical Advisory Board for all aspects of the Seaplane Lagoon Ferry Terminal.
• Since March 2018, City staff and its design team, in cooperation with WETA and APP, have made significant progress preparing the final design and obtaining the permitting approvals required by outside regulatory agencies, such as BCDC. The float component of the project is at 100% construction drawings, and the remaining elements are at 30% construction design.
• Based on the updated designs and current market conditions, the City, APP, WETA and the design team have updated previous cost estimates from multiple sources, which have indicated that the total cost of the Seaplane Lagoon Ferry Terminal is likely to exceed the 2016 cost estimate of $18.2 million by $4.0 million for a total of $22.2 million. This is due primarily to significant annual construction cost escalation.
• On June 5, 2018, Bay Area voters approved Regional Measure 3 (RM3), a bridge toll increase that once implemented will result in significant funding for capital and operational funds for WETA to implement its Strategic Plan, including expansion service to San Francisco from the Seaplane Lagoon Ferry Terminal.
• On June 19, 2018, due to the increased costs, the City Council adopted a budget for FY 2018-19 that included $2.0 million in additional funds for the Seaplane Lagoon Ferry Terminal, resulting in $20.2 million in total funding for the project.
• On August 2, 2018, the WETA Board discussed a request from the City for an additional $2.0 million to help cover the increased costs and complete the needed funding for the Seaplane Lagoon Ferry Terminal. The WETA Board voiced general support for helping the City with the final required $2.0 million, but made specific requests for WETA staff and the City to address before returning for an action item at their next Board meeting on September 6, 2018.
These requests included: (1) provide information on what existing sources of funds are available to WETA that could be used to provide a funding commitment to the City for $2.0 million next fiscal year since funds from RM3 are not yet available (for WETA staff); (2) modify the MOU to clarify that WETA must agree to any private use of the Seaplane Lagoon Ferry Terminal (for WETA and City staff); (3) ensure that WETA funds are used as the last funding into the project in the event costs come in lower than expected; and (4) make efforts to obtain a commitment from a prospective hotel developer at Harbor Bay near the Harbor Bay Ferry Terminal to agree to enter into a shared parking agreement for ferry parking, upon approval and development of their project (City staff).
Significant progress has been made since the City Council approved the conceptual Ferry Terminal Plan in 2016, including changes to the budget and funding plan, and WETA has requested potential modifications to the MOU. City staff has updated the Ferry Terminal Plan (Exhibit 3). Upon obtaining City Council approval of the updated Ferry Terminal Plan, APP, in consultation with the City and WETA, will enter into a $5.9 million contract to procure the float component of the Seaplane Lagoon Ferry Terminal the same week. The immediate procurement of the float will allow the Seaplane Lagoon Ferry Terminal to be constructed next year and operating in early 2020 as described in greater detail below. If the float procurement is delayed beyond early September, the opening of the Seaplane Lagoon Ferry Terminal could be significantly delayed, possibly an entire year due to the limited window for in-water construction work.
Regarding the MOU amendments, WETA staff will be seeking additional direction from the WETA Board on September 6 on whether amendments to the MOU are necessary and if so, more precise direction on the nature of those modifications. Depending on the final direction from the WETA Board, City staff may need to return to the City Council at a later date for approval of amendments to the MOU.
DISCUSSON
This report will summarize City staff’s recommended updates to the Ferry Terminal Plan to account for the progress made since its original approval in April 2016, including the time-sensitive critical next steps for meeting the opening date of early 2020, and staff’s assessment of the benefits and risks of moving forward with the Seaplane Lagoon Ferry Terminal project at this time.
I. Updates to Ferry Terminal Plan
The following provides a summary of the major updates made to the Ferry Terminal Plan regarding schedule and funding plan:
A. Delivery Schedule
The Seaplane Lagoon Ferry Terminal is planned to open in the first quarter of 2020. To meet this deadline, the waterside construction of the ferry terminal must take place during the 2019 in-water construction window (June through November 2019). Float procurement is a critical path item and must be ordered no later than early September 2018 to stay on course to meet this timeline. If the 2019 in-water work window is missed, the commencement of ferry operations would be delayed until 2021.
B. Funding Plan
As stated above, the total project costs are currently estimated to be approximately $22.2 million based on updated cost estimates from multiple sources, approximately $4.0 million higher than the original $18.2 million approved in the 2016 Ferry Terminal Plan. The increased costs are primarily due to cost escalation (more than 6% per year), the requirements identified moving from concept to actual design and the need to maintain an adequate contingency. As a cost containment measure and to address the constraints on the budget, staff recommends that City Council adopt a finding to exempt the project from the public art requirement, as outlined in the attached resolution. This recommendation is consistent with the Public Art Ordinance which allows exemptions for municipal projects where the budget is a concern. The Site A project, however, will still be required to comply with the Public Art Ordinance. The City, WETA staff and the consultant are also diligently working together to identify savings in the project’s scope and design. As described above, the City has secured $20.2 million in funding commitments and is optimistic the WETA Board will commit a $2.0 million allocation on September 6,, 2018. If the WETA Board does not commit these additional funds, City staff will return to the City Council with a proposed contingency plan. Regardless of the WETA Board action, City staff recommends moving forward with procurement of the $5.9 million float immediately to meet the 2019 work window. Below is a table of current sources and uses of current and anticipated funding:
II. Assessment of Benefits and Risks
City staff assessed the benefits and risks of the updates to the Ferry Terminal Plan and moving forward with the Seaplane Lagoon Ferry Terminal at this time as part of staff’s recommendation to the City Council. The following provides a summary of those benefits and risks for City Council consideration.
A. Benefits
The following provides a summary of the benefits to the City of proceeding with the updates to the Ferry Terminal Plan, including moving forward immediately with the float procurement and the remaining water and landside improvements:
§ Main Street Ferry Terminal Demand. A new ferry service at Seaplane Lagoon would alleviate the demand pressure at the Main Street terminal and would offer existing residents commute options that reduce the traffic in Alameda and in the Transbay corridor. If the project is delayed a year or more, the demand at the Main Street terminal, and the associated parking problems, will increase and require a more costly, less than optimal short-term solution. The Main Street terminal is already nearing capacity during peak a.m. commute hours, with riders sometimes left behind and parking overflowing along Main Street.
§ New Development at Alameda Point. A new Seaplane Lagoon Ferry Terminal would locate service within walking distance of the Site A development, which will maximize demand for WETA ferry services from the residents and employees located at Alameda Point. The project creates approximately 400 new parking spaces that are greatly needed to meet existing and new demand. Additional new development is also anticipated in the Main Street Neighborhood with approximately 300 new units in another 3-4 years, creating more demand for the ferry service. A new ferry terminal will significantly increase the possibility of attracting major commercial users to Alameda Point. A number of prospective commercial tenants that include higher-intensity employment uses, such as office uses, have indicated the new ferry terminal and service are important factors in locating at Alameda Point. The new Seaplane Lagoon Ferry Terminal will also create a transit hub in the heart of Alameda Point and minimize potential traffic impacts of new residents and businesses locating at Alameda Point, on the rest of the Island.
§ Expanded and Coordinated WETA Service. With only the Main Street terminal on Alameda’s west end, WETA is constrained to only five vessels during the peak commute hour due to its one-sided float at Main Street, often resulting in service delays. With a new ferry terminal at Seaplane Lagoon, WETA could easily coordinate the Main Street and Seaplane Lagoon services as one West End service (i.e., boats can be moved in and out of both terminals) to meet shifting demands from each terminal and from Oakland, creating long-term flexibility, without compromising the viability of the Oakland service. A Seaplane Lagoon terminal with the capacity for two boats also positions WETA for increased service in the Transbay corridor, where the ferry is one of the best options given capacity limitations on the Bay Bridge and BART.
B. Risks
The following provides a summary of potential risks to the City of both proceeding and not proceeding with the float procurement now and the impacts if there is a delay in the project schedule.
§ Construction Cost Escalation. Any delays in procurement could impact the current pricing and increase overall project costs. While price escalation due to the recent tariffs on steel and aluminum is possible, the current estimated costs for the float and gangway would be unaffected if pricing is locked in now since these materials can be procured immediately.
§ Project Schedule Delay. If the float is not procured by early September 2018 and the 2019 in-water construction window is missed, operations will be delayed. A delay in the schedule could also jeopardize ACTC funding, which is currently programed to fund construction in 2019.
§ RM3 Lawsuit. The project requires an annual operational subsidy to fund the excess of operating expenses over revenue generated by passenger fares. The subsidy was programmed into the recently passed RM3, which is being challenged by a pending lawsuit. Without the operating subsidy, WETA ferries may not be able to operate, even if the new Seaplane Lagoon Ferry Terminal is constructed.
§ WETA Funding Not Secured. While the WETA Board was generally supportive of helping to fund the $2.0 million gap, they will not take an action until this Thursday, September 6. If they do not commit to $2.0 million in funding, City staff will return to the City Council with a contingency plan for funding the remaining funding gap as soon as possible.
Taking into consideration the benefits and risks above, staff recommends that City Council approve updates to the Ferry Terminal Plan, which will result in the immediate procurement of the float and final design and construction of the remaining water and landside improvements for the Seaplane Lagoon Ferry Terminal.
FINANCIAL IMPACT
Approval of the Seaplane Lagoon Ferry Terminal Plan acknowledges that at the time this report is transmitted, the overall project maintains a current funding gap of approximately $2.0 million with the total cost estimated at $22.2 million and total funding commitments of $20.2 million. As shown above, there is more than sufficient funding for procurement of the $5.9 million float that APP will contract for using the developer’s contribution. Should the request for funding from WETA be approved on September 6, the project will have full funding with adequate contingency to contract for the remaining ferry terminal improvements. If WETA does not agree to fund the gap, additional funding will be needed and City staff will return to the City Council immediately with a contingency plan.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
A ferry on the Seaplane Lagoon is consistent with the Alameda Point Waterfront and Town Center Precise Plan, which included a ferry terminal at Seaplane Lagoon as part of Site A Development. City Council approved the Seaplane Lagoon Ferry Terminal Plan on April 5, 2016.
ENVIRONMENTAL REVIEW
On February 4, 2014, the City of Alameda certified the Alameda Point Final Environmental Impact Report (FEIR) in compliance with CEQA. The FEIR evaluated the environmental impacts of redevelopment and reuse of the lands at Alameda Point consistent with the Alameda Point Waterfront and Town Center Plan, which included a ferry terminal at Seaplane Lagoon as part of Site A development. Consistent with the February 2014 action, on May 11, 2015, the Planning Board approved a resolution containing conditions of approval that require that the Site A development comply with, and implement, all the relevant mitigations measures adopted by the City Council in February 2014. The DDA also includes the MMRP as an exhibit and requires compliance with all of the relevant mitigation measures.
Under Public Resources Code Section 21083.3 and Section 15183 of the CEQA Guidelines, where a project is consistent with the development density established by existing zoning, a community plan, or a general plan for which an EIR was certified, additional environmental review is not required. The density and land uses of the proposed Ferry Terminal are consistent with the Town Center and Waterfront Plan and Alameda Point Zoning District. As documented in the CEQA Addendum to the Alameda Point project EIR, construction of a ferry terminal at Seaplane Lagoon would not result in significant impacts that: (1) are peculiar to the project or project site; (2) were not already identified as significant effects, cumulative effects, or off-site effects in the FEIR; or (3) were previously identified as significant effects, but are determined to be substantially more severe than discussed in the EIR. Thus, the streamlining provision of Public Resources Code Section 21083.3 and Section 15183 of the CEQA Guidelines apply and no further environmental review is necessary.
RECOMMENDATION
Adopt a resolution approving the updated Seaplane Lagoon Ferry Terminal Plan resulting in procurement of the ferry terminal float and construction of the remaining water and landside improvements.
Respectfully Submitted,
Jennifer Ott, Director, Base Reuse and Transportation Planning
By,
Michelle Giles, Redevelopment Project Manager
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Ferry Terminal Plan
2. WETA MOU
3. Updated Ferry Terminal Plan