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File #: 2015-1451   
Type: Regular Agenda Item
Body: City Council
On agenda: 4/7/2015
Title: Recommendation to Accept Report on Offer to Transfer a Portion of the Oakland Inner Harbor Tidal Canal From the Army Corp of Engineers to the City of Alameda at No Cost and Subsequent Disposition of Property. (City Attorney 7120)
Attachments: 1. Exhibit 1 - Oakland Inner Harbor Tidal Canal City Council Presentation, 2. Presentation - REVISED
Title
 
Recommendation to Accept Report on Offer to Transfer a Portion of the Oakland Inner Harbor Tidal Canal From the Army Corp of Engineers to the City of Alameda at No Cost and Subsequent Disposition of Property.  (City Attorney 7120)
Body
 
To: Honorable Mayor and Members of the City Council
 
From: John A. Russo, City Manager
 
Re: Staff Report on Offer to Transfer a Portion of the Oakland Inner Harbor Tidal Canal From the Army Corps of Engineers to the City of Alameda at No Cost and Subsequent Disposition of Property.  
 
BACKGROUND
 
The Oakland Inner Harbor Tidal Canal ("Tidal Canal") is a 1.8 mile long, 400 feet wide portion of the waterway between Oakland and Alameda that was dredged in 1882 by the US Army Corps of Engineers ("Army Corps") to create a tidal effect throughout the Oakland Estuary. The Tidal Canal covers 85 acres and is currently owned by the Army Corps.  
 
The Army Corp desires to transfer ownership of the Tidal Canal to one or more public entities at no cost and has legislative authority to do so.  The Army Corps has offered to convey half of the Tidal Canal (split down the middle) to the City of Oakland and the other half to the City of Alameda.  On September 2, 2014 and again on February 3, 2015, staff met with the City Council in Closed Session to discuss whether the City is interested in negotiating the transfer and if so, under what price and terms.
 
This item is being brought in open session, at the direction of the City Council, to allow the Councilmembers to hear public comment from the public and interested stakeholders regarding this matter.  This presentation will: (i) provide a brief overview of the history of the Tidal Canal and some of the problems associated with it in its current condition; (ii) discuss the fiscal and environmental issues associated with a potential transfer and those associated with "no action"; and (iii) discuss recommended next steps.  
 
DISCUSSION
 
Please see the attached Power Point for the presentation to be presented by City Attorney staff and outside counsel.
 
FINANCIAL IMPACT
 
It is difficult to estimate the fiscal impact to the City at this time.  If the transaction is ultimately approved by the City Council, the transfer from the Army Corps to the City will be at no cost.  
 
The transaction costs associated with the immediate subsequent transfer of the residential parcels from the City to the residential buyers are proposed to be covered by the buyers as part of the purchase price.  The purchase price is also intended to reimburse the City for the upfront costs to survey and map the individual residential parcels.
 
The City will be responsible for the survey, mapping and maintenance of the commercial parcel.  These costs cannot be determined with certainty at this time but may ultimately be offset by revenue generated by the sale or lease of one or more of the individual parcels to adjacent commercial users.
 
If the transaction is approved, the City would also be responsible for the maintenance of the open water parcel.  As this is submerged lands and the responsibility of dredging is anticipated to remain with the Army Corps, no fiscal impact is anticipated as a result of a no-cost transfer from the Army Corps to the City for this parcel.
 
ENVIRONMENTAL REVIEW
 
This item is for information only.   
 
RECOMMENDATION
 
No action required.  The City Council gave direction to City staff on this matter in Closed Session on February 3, 2015.
 
Respectfully submitted,
Janet Kern, City Attorney
 
By:
Andrico Q. Penick, Assistant City Attorney
 
Financial Impact section reviewed,
Elena Adair, Finance Director
 
Exhibit:
1.      Oakland Inner Harbor Tidal Canal City Council Presentation