Title
Recommendation to Approve an Exclusive Negotiation Agreement between the City of Alameda and Alameda United Commercial LLC for an Approximate 5.5-Acre Site on the Taxiways along the Seaplane Lagoon. (Base Reuse 819099)
Body
To: Honorable Mayor and Members of the City Council
From: John A. Russo, City Manager
Re: Approve an Exclusive Negotiation Agreement between the City of Alameda and Alameda United Commercial LLC for an Approximate 5.5-Acre Site on the Taxiways along the Seaplane Lagoon
BACKGROUND
Now that the City owns significant portions of Alameda Point and has completed major entitlements for the property [i.e., environmental impact report, Zoning Ordinance Amendment (ZA), Town Center and Waterfront Plan (Town Center Plan), and Master Infrastructure Plan (MIP)], City staff is focused on facilitating near-term construction at Alameda Point, which has the potential of generating thousands of jobs, millions of dollars in tax revenue and over a thousand housing units. Additionally, the regional economy is currently very strong and it is important that the City take advantage of the favorable market conditions and start to make the community's vision for Alameda Point a reality.
In the interest of attracting new investment to Alameda Point, the City issued request for qualifications from developers for two sites within new development areas, as well as continues to pursue commercial and residential leasing and development opportunities within the Naval Air Station Alameda (NAS Alameda) Historic District. City staff and its leasing agent, Cushman & Wakefield, are often approached by businesses and developers interested in leasing and development opportunities at Alameda Point. In fact, many of the existing leases at Alameda Point, including the successful food and beverage manufacturing businesses within the NAS Alameda Historic District, are the result of favorable responses by the City to inquiries from interested businesses and developers.
City staff was approached by Alameda United Commercial LLC, in conjunction with Salvatore Caruso Design Corporation, a developer/design team (AUC Team) for a number of sites at Alameda Point, including the renovation of the Bachelors Enlisted Quarters (BEQ) and a 5.5-acre parcel along the taxiways adjacent to the Seaplane Lagoon, both of which are within the NAS Alameda Historic District. This staff report pertains to the AUC Team's proposed redevelopment of a 5.5-acre site on the taxiways along the Seaplane Lagoon (Exhibit 1).
DISCUSSION
The AUC Team proposes new development along the taxiways that includes hotels and residential condominiums. City staff recommends exploring the AUC Team's qualifications and development proposal in greater depth as part of an Exclusive Negotiation Agreement (ENA) between the City and the AUC Team (Exhibit 2). The ENA is intended to result in an approved Disposition and Development Agreement (DDA) (i.e., price and terms of payment for the land and development obligations), and an approved Development Plan (i.e., detailed development plan, building footprints and massing, if applicable, landscape concepts, and a phasing plan). The following provides a summary of the key terms of the proposed ENA:
1. Deposit. The ENA requires a $250,000 deposit for City staff and consultant costs, which becomes non-refundable throughout the term of the ENA at a rate of $50,000 per month with the full deposit becoming non-refundable at the end of the term.
2. Statement of Qualifications. The ENA requires the AUC Team to submit a statement of qualifications (SOQ) within 30 days of the effective date of the ENA that demonstrates significant relevant project experience, including photos, site plans, cost and financial information, staffing, and references of completed projects for projects relevant to new hotel and condominium development. The City Manager then has 30 days to review the sufficiency of the SOQ. If the City Manager deems the SOQ insufficient, the ENA terminates and the City returns the full deposit to the AUC Team. The more detailed SOQ requirements are included as Exhibit C to the ENA.
3. Term. The ENA period is contemplated as a compact 6-month process. No administrative extensions are allowed.
4. Land Price. The non-binding letter of intent attached to the ENA as Exhibit B contemplates a $7.5 million land price for the property plus a $56,000-per-unit fee for each of the market rate residential units. However, the ultimate land price will be subject to further negotiations during the ENA process.
5. Developer's Responsibilities. The developer's responsibilities during the ENA process include: establishing a fair, effective, and collaborative partnership with the City and Alameda community; submitting an SOQ; negotiating and obtaining approval of a DDA for the taxiway land, including submittal of supportive documents, such as a proforma and financing plan; and preparing and obtaining approval of a Development Plan for the taxiway property consistent with the Town Center Plan.
6. City's Responsibilities. The City's responsibilities during the ENA period include negotiating exclusively and in good faith with the developer regarding a DDA for the taxiway site, and actively participating in the preparation of the Development Plan by developer for the taxiway site and considering approval of the Development Plan application, if completed, during the ENA process.
FINANCIAL IMPACT
The approval of the ENA will not impact the General Fund or Base Reuse Department budgets (Fund 858).
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The ENA implements the Alameda Point Zoning Ordinance (Section 30-4.24 of the Alameda Municipal Code) and the recently approved Town Center Plan.
ENVIRONMENTAL REVIEW
This ENA is not subject to the California Environmental Quality Act ("CEQA") as it is not a project as defined in CEQA Guidelines section 15378 and therefore will not result in a physical change in the environment pursuant to CEQA Guidelines section 15060(c)(2).
RECOMMENDATION
Approve an Exclusive Negotiation Agreement between the City of Alameda and Alameda United Commercial LLC for an Approximate 5.5-Acre Site on the Taxiways along the Seaplane Lagoon.
Respectfully submitted,
Jennifer Ott, Chief Operating Officer - Alameda Point
Financial Impact section reviewed,
Fred Marsh, Finance Director
Exhibits:
1. Map Depicting Taxiway Site
2. Exclusive Negotiation Agreement between the City of Alameda and Alameda United Commercial LLC