Title
Summary Title: Several actions for the Master Plan for the Del Monte Warehouse Project, which was approved in December 2014, including subdividing the property, authorizing an agreement to transfer certain City owned land to the Housing Authority and outlining the requirement to develop affordable housing units.
Conduct a Public Hearing and Approve:
a) Adoption of Resolution Approving PLN15-0165 - a Seven-Lot Tentative Subdivision Map at 1501 Buena Vista Avenue to Implement the 2014 Del Monte Master Plan;
b) Introduction of Ordinance Authorizing the Purchase Option Agreement Between the City of Alameda and the Alameda Housing Authority and Authorizing the Interim City Manager to Execute All Necessary Documents [Requires Four Affirmative Votes], which Transfers 0.47 Acres of City-Owned Real Property Identified as Assessor’s Parcel Numbers 079-0383-001 and -002 Located at the Northeast Corner of the Intersection of Buena Vista Avenue and Sherman Street From the City of Alameda to the Alameda Housing Authority For the Construction of a 31-Unit Affordable Senior Housing Development;
c) Adoption of Resolution Approving An Affordable Housing Agreement Between the City of Alameda and TL Partners I, L.P. Outlining the Requirements to Develop 55 Affordable Units, Including the 31-Unit Affordable Rental Housing Development on Parcel 3 at 1501 Buena Vista Avenue and Authorizing the Interim City Manager to Execute the Agreement. (Community Development 481005) [Continued from July 7, 2015]
Body
To: Honorable Mayor and Members of the City Council
From: Elizabeth D. Warmerdam, Interim City Manager
Re: Conduct a Public Hearing and Approve:
a) Adoption of Resolution Approving PLN15-0165 - a Seven-Lot Tentative Subdivision Map at 1501 Buena Vista Avenue to Implement the 2014 Del Monte Master Plan;
b) Introduction of Ordinance Authorizing the Purchase Option Agreement Between the City of Alameda and the Alameda Housing Authority and Authorizing the Interim City Manager to Execute All Necessary Documents [Requires Four Affirmative Votes], which Transfers 0.47 Acres of City-Owned Real Property Identified as Assessor’s Parcel Numbers 079-0383-001 and -002 Located at the Northeast Corner of the Intersection of Buena Vista Avenue and Sherman Street From the City of Alameda to the Alameda Housing Authority For the Construction of a 31-Unit Affordable Senior Housing Development;
c) Adoption of Resolution Approving An Affordable Housing Agreement Between the City of Alameda and TL Partners I, L.P. Outlining the Requirements to Develop 55 Affordable Units, Including the 31-Unit Affordable Rental Housing Development on Parcel 3 at 1501 Buena Vista Avenue and Authorizing the Interim City Manager to Execute the Agreement. [Continued from July 7, 2015]
BACKGROUND
On December 2, 2014, and after a 10-month public process, the City Council approved the Del Monte Warehouse Master Plan and Development Agreement for the 11.06-acre property located at 1501 Buena Vista Avenue. The Master Plan and Development Agreement establish a series of entitlements and developer obligations for the redevelopment of the property, including the historic Del Monte Warehouse building and surrounding land.
Pursuant to the Development Agreement, TL Partners I, L.P. (TLC) transmitted $300,000 to the Recreation and Parks Department in February 2015. The payment represents the first installment of the $2 million contribution towards the design and construction of the Jean Sweeney Open Space Park. The Recreation and Parks Department is using the $300,000 to prepare construction drawings and documents for the future 22-acre park. In addition, the Recreation and Parks Department is using the $2 million contribution as a local match for outside grant funds for the future park.
Under the terms of the DA, TLC is also obligated to construct, at no cost to the City, the extension of Clement Avenue from Atlantic Street to Entrance Road prior to completion of the Del Monte Warehouse building. Throughout the spring, city staff and TLC have had on-going discussions with Wind River about the purchase of the land necessary to construct the road. Wind River and TLC are currently in active negotiations over the purchase price for the land necessary to construct the roadway extension. In meetings between Wind River and City staff, Wind River representatives have expressed their desire to expeditiously complete these negotiations to facilitate the construction of the Clement extension, which will benefit all property owners in the Northern Waterfront, including Wind River.
On May 26, 2015, TLC and staff presented a six-month progress report to the community and Planning Board as required by the Master Plan. At the public hearing, the Planning Board:
• Accepted the six-month progress report;
• Approved a Design Review and Development Plan for the 31-unit senior affordable housing development required by the Master Plan; and
• Approved a resolution recommending that the City Council approve a Tentative Map for the project, which is necessary to facilitate redevelopment of the property consistent with the Master Plan.
DISCUSSION
The Del Monte Master Plan and Development Agreement require that the project construct 55 affordable housing units. The Master Plan includes a detailed sequence of actions that are necessary to provide all 55 units concurrent with the provision of the first 308 market-rate units. Consistent with the Master Plan, the 24 moderate-income units will be interspersed throughout the 308 market-rate units in the Del Monte building, and TLC is proposing to provide the 14 low-income units and 17 very low-income units in a 31-unit senior affordable housing development at the corner of Sherman and Buena Vista.
TLC is proposing to construct the 31-unit, senior affordable housing project, in partnership with the Alameda Housing Authority. In addition to housing, the Housing Authority is proposing to provide a wide array of services and programs to the senior low income residents including transit services.
In addition, the project provides ample parking for the project. To address neighborhood concerns about parking, the project provides 31 parking spaces for 32 bedrooms, yielding an average of 0.97 spaces per bedroom. This is significantly more than the number of parking spaces provided at other affordable family housing and senior developments in Alameda. For example, 0.69 spaces per bedroom are provided at the Shinsei Gardens project, 0.70 spaces per bedroom are provided at Independence Plaza, and 0.67 spaces per bedroom are provided at the new Stargell Commons project.
The proposed building straddles a portion of the 11.6-acre TLC property and a 0.47 acre remnant property owned by the City of Alameda at the corner of Buena Vista and Sherman Street. The TLC/Housing Authority partnership is requesting that the City Council approve a Purchase Option Agreement with the Housing Authority for the 0.47 acre corner property. If the City Council approves the Purchase Option Agreement, then TLC plans to convey an adjacent 0.42 acre parcel to the Housing Authority. In combination, the two parcels will provide the Housing Authority with land necessary to construct the 31-unit senior project and associated parking area.
Tentative Map. The Tentative Map is designed to implement the Del Monte Master Plan. The proposed Tentative Map subdivides the 11.06 TLC property into seven smaller parcels for buildings, internal circulation and parking.
Parcels 1 and 2 represent the approximately six acres of land occupied by the Del Monte Warehouse. Creating two parcels enables the $100 million cost of rehabilitation of the historic Del Monte building to be completed in two phases. Parcel 3 is the 0.42-acre parcel proposed to be transferred to the City of Alameda Housing Authority for the 31-unit senior affordable housing project. Parcel 4 is a 0.79-acre parcel designed for future development, as regulated by the Master Plan. Any future plans for Parcel 4 must be consistent with the Master Plan and reviewed and approved by the Planning Board at a public hearing at a future date. Parcels 6, 7, and 8 are for internal roads and parking.
On May 26, 2015, the Planning Board unanimously voted to recommend that the City Council approve the tentative map. Pursuant to the Alameda Municipal Code, approval of a Tentative Map requires approval of a City Council resolution with an affirmative vote of three City Council members.
Purchase Option Agreement. As described above, the Alameda Housing Authority would like to be the developer and owner of the 31-unit affordable senior housing project. The Housing Authority would own and manage the property in perpetuity.
To facilitate the construction of the project, the Housing Authority is requesting that the City Council approve a Purchase Option Agreement for the 0.47-acre City-owned property at the corner of Buena Vista Avenue and Sherman Street. The recommended Agreement authorizes the transfer of the City-owned land to the Housing Authority.
Pursuant to the Purchase Option Agreement, the 0.47-acre City-owned site will be conveyed to the Housing Authority for $1.00. As described in the Affordable Housing Agreement, TLC will also convey its 0.42 acres to the Housing Authority for $1.00, and TLC will also contribute all gap funding required to construct the affordable housing project.
The December 2014 Del Monte Agreement requires that the Del Monte project acquire and build the Clement Avenue extension at an estimated cost of approximately $7 million. The Development Agreement provides for the transfer of the City parcel to TLC in exchange for the construction and dedication back to the City of the Clement Avenue extension. In 2014, the City property was appraised at $720,000.
The Del Monte Agreement further provides that TLC may request that the City transfer the City parcel directly to the Housing Authority for use for Affordable Housing. The proposed Purchase Option Agreement transfers the property to the Housing Authority and does not eliminate TLC’s responsibility to construct and transfer the Clement Avenue extension. Under the terms of the DA, TLC continues to be obligated to construct, at no cost to the City, the extension of Clement Avenue from Atlantic Street to Entrance Road.
Under the Purchase Option Agreement, the actual transfer of the property will not occur until after the construction financing has been secured by the Housing Authority. The Agreement contains a right of reverter if the Housing Authority fails to secure financing within two years of approval of the Purchase Option Agreement. A one year extension is provided if the Housing Authority wishes to make a final effort to apply for outside funding for the project. If the Housing Authority is unable to acquire the necessary funds to construct the project within the three years, the land will revert back to the City and TLC will be obligated to construct the 31 very low- and low-income units.
Pursuant to the Alameda City Charter Section 3-10, the proposed Purchase Option Agreement requires approval of an ordinance by the City Council by the affirmative vote of four members of the City Council.
In conclusion, staff recommends the Purchase Option Agreement for the following reasons:
• The Agreement facilitates the construction and ownership in perpetuity of 31 senior affordable housing units by the Alameda Housing Authority;
• The Agreement supports the Del Monte Master Plan and improvements to the corner of Buena Vista and Sherman Street and the Northern Waterfront neighborhoods;
• The City-owned parcel is of little to no use to the City of Alameda or the Alameda community; and
• As part of the Del Monte Master Plan development, the City will receive the Clement Avenue extension at no cost, which would cost the City over $7 million if the City were to construct the extension on its own.
Affordable Housing Agreement. The Master Plan requires City Council approval of the Affordable Housing Agreement. The Agreement is the document that regulates the development of moderate-, low- and very low-income units in accordance with the City’s Inclusionary Housing ordinance. The standard Agreement has been used for residential projects with an Inclusionary Zoning requirement for over ten years. The Agreement includes project-specific details such as the number, size and location of the affordable units within the overall development; the number of units required for the different income levels; the marketing plan; etc. When for-sale units are developed, the Agreement also requires that the affordable units be deed restricted and limits re-sale and occupancy to income-eligible households. When rental units are developed, the Agreement defines income-eligible households; how the units will be monitored for income compliance; and the formula by which affordable rents are determined. The Agreement guarantees affordability for no less than 59 years.
The Agreement has been tailored according to the terms and requirements of the approved Del Monte project and will be recorded on the property as a regulatory agreement. The Agreement states that 24 moderate-income units will be constructed within the Del Monte building and that 31 low- and very low-income units will be developed on the adjacent parcel. It further requires that the quality of the construction and the amenities available to residents will be comparable to those of the market-rate units.
Staff recommends that the City Council approve the resolution approving the Affordable Housing Agreement and authorize the Interim City Manager to execute the Agreement and any related documents to carry out the affordable housing project. Approval of the recommended resolution requires the affirmative vote of three City Council members.
FINANCIAL IMPACT
Approval of the Tentative Map, Purchase Option Agreement and Affordable Housing Agreement will not result in a negative financial impact on the City’s General Fund. The City Council previously approved the Del Monte Master Plan and Development Agreement. These agreements fund several major public improvements for which funds are not currently available in the General Fund, such as the Jean Sweeney Open Space Park ($2 million developer contribution) and the Clement Avenue extension ($7 million estimate).
The City-owned property that is the subject of the Purchase Option Agreement is not generating any revenue to the City of Alameda. The City is currently responsible for maintenance of this property. Under the proposed agreements, the City would be relieved of any maintenance responsibilities for the property if the Housing Authority exercises its option and acquires the property.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The Tentative Map, Affordable Housing Agreement and Purchase Option Agreement have been prepared consistent with the City’s Charter and Alameda Municipal Code sections on Tentative Maps (Chapter XXX, Article 1, 30-78) and Inclusionary Housing Requirements for Residential Projects (Chapter XXX, Article 1, 30-16).
ENVIRONMENTAL REVIEW
An Environmental Impact Report (EIR) was certified for the Northern Waterfront General Plan Amendment (GPA) in 2008. A Subsequent Mitigated Negative Declaration (SMND) and Mitigation Monitoring Program for the Del Monte Master Plan and Development Agreement were adopted by the City Council in December of 2014, pursuant to the California Environmental Quality Act (CEQA). The Tentative Map, Purchase Option Agreement and Affordable Housing Agreement implement the Master Plan and no further environmental review is required.
RECOMMENDATION
Hold a public hearing and approve:
a) Adoption of Resolution Approving PLN15-0165 - a Seven-Lot Tentative Subdivision Map at 1501 Buena Vista Avenue to Implement the 2014 Del Monte Master Plan;
b) Introduction of Ordinance Authorizing the Purchase Option Agreement Between the City of Alameda and the Alameda Housing Authority and Authorizing the Interim City Manager to Execute All Necessary Documents [Requires Four Affirmative Votes], which Transfers 0.47 Acres of City-Owned Real Property Identified as Assessor’s Parcel Numbers 079-0383-001 and -002 Located at the Northeast Corner of the Intersection of Buena Vista Avenue and Sherman Street From the City of Alameda to the Alameda Housing Authority For the Construction of a 31-Unit Affordable Senior Housing Development;
c) Adoption of Resolution Approving An Affordable Housing Agreement Between the City of Alameda and TL Partners I, L.P. Outlining the Requirements to Develop 55 Affordable Units, Including the 31-Unit Affordable Rental Housing Development on Parcel 3 at 1501 Buena Vista Avenue and Authorizing the Interim City Manager to Execute the Agreement. [Continued from July 7, 2015]
Respectfully submitted,
Debbie Potter, Community Development Director
By:
Andrew Thomas, City Planner
Financial Impact section reviewed by
Elena Adair, Finance Director
Exhibit:
1. Affordable Housing Agreement