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File #: 2013-76   
Type: Regular Agenda Item
Body: City Council
On agenda: 9/25/2013
Title: Provide Comments on the Disposition Strategy for Alameda Point. (Base Reuse 819099)
Attachments: 1. Exhibit 1 - Map of Phase 1 Conveyance of Alameda Point, 2. Exhibit 2 - Draft Map of Alameda Point Zoning Sub-Districts, 3. Exhibit 3 - Map of Conveyance Phases for Alameda Point, 4. 2013-09-25 3-B Presentation, 5. 2013-09-25 3-B Presentation by Member Knox White
Provide Comments on the Disposition Strategy for Alameda Point.  (Base Reuse 819099)
To: Honorable Mayor and Members of the City Council
Honorable President and Members of the Planning Board
From: John A. Russo, City Manager
Re: Provide Comments on the Disposition Strategy for Alameda Point
The United States Navy (Navy) transferred approximately 1,379 acres of the Alameda Point property to the City of Alameda on June 4, 2013, which included 509 acres of land and 870 acres of submerged property (Exhibit 1).  Now that the City owns significant portions of Alameda Point, the City is committed to the realistic and balanced development of Alameda Point, which has the potential of generating thousands of jobs, millions of dollars in tax revenue and over a thousand housing units. This will result in important environmental, economic, social and health benefits to the City and region. It is one of the best opportunities in the Bay Area for infill development.   After nearly 20 years of discussions, public meetings, plans, visions, debates, and millions of public dollars spent on studies and data collection, the City is finally preparing for City Council consideration in early 2014 a comprehensive zoning ordinance amendment and associated General Plan Amendments, a Master Infrastructure Plan, a Town Center and Waterfront Precise Plan, and an environmental impact report (EIR) for Alameda Point (collectively, Planning Approvals).    
The Planning Approvals will be consistent with the 1996 NAS Alameda Community Reuse Plan (Reuse Plan) in compliance with the City's no-cost economic development conveyance agreement with the Navy, which prescribes a development program that first and foremost emphasizes the replacement of the 14,000 jobs lost when the base closed.  The development program includes approximately 5.5 million square feet of employment uses in existing and newly constructed buildings, 1,425 residential units, and over 250 acres of parks and open space.  If the City allows development of more than the 1,425 units, the City would be required to pay the Navy a penalty of $50,000 for each "over-the-limit" market rate unit per the no-cost conveyance agreement.
The 200 existing supportive housing units at Alameda Point are planned for reconstruction on-site within a smaller, consolidated footprint, and approximately 25 percent of the newly constructed residential units are intended to be made available for lower income households.  While it is anticipated that Alameda Point will be developed in phases over the next 20 to 30 years, the pace of redevelopment will depend on economic conditions, the Navy's completion of the remaining environmental remediation activities, and the Navy's property conveyance schedule, among other factors.  It is tentatively anticipated that construction of new infrastructure could occur as early as 2015.
It is also important to note that the City's agreement with the Navy requires that the City reinvest any lease revenue and land sale proceeds into the maintenance and development of the Alameda Point property for 25 years. As a result, only tax revenue generated from the Alameda Point development can be used to fund Citywide services, facilities and amenities.
As the property owner of much of the Alameda Point property, the City must soon decide how it will dispose of the property for development and for what uses and where.  This report presents staff's strategy for disposition of the Alameda Point property.  Obviously, staff's strategy is not and cannot be the final word in this regard.  Planning Board and City Council, through the zoning and EIR process, will dictate the development envelope within which staff must operate.  Even more importantly, the actual financial terms for the disposition of each and every piece of Alameda Point property will have to be analyzed and approved by the City Council.  Additionally, any development project that does not fit within the bounds of the EIR and Zoning Plan will need specific Planning Board approval.
This staff report outlines: (A) some key questions that were considered by staff; (B) an overview of the disposition strategy; and (C) a list of implementation issues to consider when thinking about the strategy.
A. Key Questions
The following are some key questions that City staff evaluated in preparing a disposition strategy for Alameda Point:
·      What are the City's goals for disposition of Alameda Point? To maximize tax revenue; on-site amenities, such as parks and open space; land value; transit ridership? To minimize traffic, fiscal and environmental impacts? Or, balance numerous public policy goals?
·      What areas of Alameda Point should be targeted for Phase 1 disposition and development and what land uses should be a priority for Phase 1? Are there areas and uses that should be marketed concurrently?  Are there areas that minimize upfront infrastructure costs and maximize financial feasibility?
·      Since there are a limited number of housing units proposed for Alameda Point, where should those units strategically be allocated and for what type of units (e.g., single-family, multi-family units or a mix of both)?
B. Disposition Strategy
This section describes an overview of the disposition strategy for Alameda Point.  The strategic next steps outlined below are generally presented in order of a proposed priority and sequence, and are in addition to continuing to maintain a strong property management function and to maximize lease revenues within the Adaptive Reuse sub-district similar to current leasing activities:
1.      Attract major retail and/or business-to-business sales tax generators to the Enterprise sub-district and possibly the portion of the Town Center sub-district south of W. Atlantic Avenue (see Exhibit 2, proposed zoning map) in order to help rectify the structural imbalance in the City's General Fund budget.  The City leaks significant sales tax to surrounding jurisdictions and, as a result, can afford to attract major retailers without adversely affecting the viability of its existing retail base.
2.      Actively market property for a major campus user that generates jobs and/or significant business spin-off potential within the Enterprise sub-district, along the northern waterfront within the Town Center sub-district, or within the administrative core (near City Hall West and the parade grounds) within the Adaptive Reuse sub-district.  A major employment user could achieve numerous benefits, including: (1) improving economic opportunities for local residents (2) minimizing impacts to City services because employees' impacts are typically limited to daytime hours; (3) creating opportunities for Alameda residents to work and live on-island, which minimizes traffic through the tubes during peak hours; and (4) generating auto trips in the reverse commute direction.
3.      Continue to promote portions of Alameda Point as a prime location for maritime businesses.  There are few remaining waterfront areas within the Bay Area where maritime commercial uses continue to be welcome.  Alameda Point is already home to a number of maritime tenants that offer high-tech, high-paid jobs and generate significant lease revenue to the City.
4.      Concentrate the majority of the 1,425 units in multi-family housing development, (including some vertical mixed-use buildings with housing above ground-floor commercial uses) along both sides of W. Atlantic within the Town Center sub-district, where possible.  The clustering of multi-family housing along major transit corridors and within walking distance of the waterfront promenade and retail core creates incentives for residents to walk (instead of drive) to local amenities and services and to ride transit located within a short walking distance from their home.
5.      Facilitate development of the remaining market rate and affordable housing units in low-to-moderate density residential product types within a southeastern portion of the Main Street Neighborhood sub-district situated along Main Street and directly adjacent to the northern boundary of the Town Center sub-district.  These units will be less dense than the housing planned for the Town Center sub-district, but higher than the very low density of the existing "Big White" area (the 18 historic homes along the "beehive" street network in the northern part of the "Main Street Neighborhood," as depicted on Exhibit 2).
6.      Concurrent with development efforts described under #1-#5 above, coordinate closely with the existing supportive housing providers to replace their existing housing and services with new housing facilities on a smaller, consolidated land footprint, resulting in  more land for future housing development.
7.      Explore opportunities to attract a developer that is interested in renovating the "Big Whites," and selling them for prices sufficient to fund new infrastructure in this area, possibly as part of #5 and #6 above.
8.      New leases consistent with the existing food and beverage, and green tech industry clusters within this area should be prioritized. Feasible and unique opportunities to reuse a chronically vacant building or add compatible infill development within the Adaptive Reuse sub-district should be pursued as they present themselves.
9.      Pursue opportunities to collaborate with federal agencies [e.g., Department of Veteran's Affairs (VA) and Department of Interior] to fund and create a national recreational asset on the western half of the former base that links the nature reserve on federal property and the open space within the City's Northwest Territories, compatible with the VA's proposed outpatient clinic and columbarium.
C. Implementation Considerations
The following presents a non-exhaustive list of key implementation issues that are important to consider when discussing and evaluating the disposition strategy:
·      It is unlikely that land included in the Navy's proposed Phase 4 conveyance will be transferred to the City before 2019 (Exhibit 3), which affects its viability as a target area for Phase 1 disposition and development.
·      By concentrating housing and commercial development within a compact area along a planned transit corridor, it is more likely that new or expanded transit service will be viable and receive necessary funding.
·      Infrastructure development that starts closer to Main Street will be less expensive than development that starts farther away from Main Street given it would require less new infrastructure to connect to the existing infrastructure within the Main Street utility corridor.
·      Though close to Main Street, West Atlantic Avenue is an expensive street and utility corridor to construct because of the size of the street and number and type of transportation facilities (i.e., bike, transit, car) planned for the corridor, as well as the need for utility coordination with the existing groundwater plume under or near the planned street.
·      A greater diversity of land uses and housing types being developed at the same time may allow units to "absorb" (i.e., sell and lease) faster, which would result in more revenues sooner to offset expensive upfront infrastructure costs.
·      Flexibility must be built into the strategy to adapt to changing market conditions and demand over time.
·      By avoiding or delaying demolition and development of currently revenue-generating buildings and assets, these funds can be leveraged for important maintenance and capital facilities needs.
Next Steps
Staff requests that City Council and Planning Board discuss and provide feedback on staff's disposition strategy for Alameda Point.
There is no financial impact to the City's General Fund or Base Reuse Department Revenue Fund (Fund 858).
The City Council and Planning Board's review and comments on disposition strategy requires no environmental review at this time as such review and comments are part of a planning and feasibility study for possible future action that the City has not approved, adopted or funded and the City Council and Planning Board's review and comments do not legally bind the Planning Board, the City Council or City staff to any possible future action.  
Provide comments on the disposition strategy for Alameda Point.
Respectfully submitted,
Jennifer Ott, Chief Operating Officer - Alameda Point
Financial Impact section reviewed,
Fred Marsh, Finance Director
1.      Map of Phase I Conveyance of Alameda Point
2.      Draft Map of Alameda Point Zoning Sub-Districts
3.      Map of Conveyance Phases for Alameda Point