Title
Recommendation to Accept the Document Outlining the Approach to Attracting Development to the Enterprise District at Alameda Point and a Six-Month Status Update. (Base Reuse 819099)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Recommendation to Accept the Document Outlining the Approach to Attracting Development to the Enterprise District at Alameda Point and a Six-Month Status Update
BACKGROUND
In April 2014, City Council directed City staff to issue a Request for Qualifications (RFQ) from developers for an 82-acre commercial development site within the Enterprise District at Alameda Point, previously referred to as Site B (Exhibit 1) at the same time as the RFQ for the 68-acre mixed-use Site A project. Although there were four qualified developers that responded to the RFQ, two of which the City Council selected to negotiate with, the negotiations stalled because the developers were not willing to commit to upfront infrastructure, land payments or a milestone schedule for implementing development due to the uncertainty of the commercial market in Alameda and the high cost of infrastructure. As a result, in December 2014 the City Council approved postponing any decision on Site B until 2015 when there would be more certainty about the Site A development and the timing of its infrastructure development which had the potential of significantly benefiting commercial development sites.
In July 2015, the City Council approved the 68-acre Site A development consisting of 800 housing units and 600,000 square feet of commercial space. The first phase of the Site A project is in the design and construction phase and is comprised of major infrastructure investment, including a new upgraded sewer line from the pump station at the northern boundary of Alameda Point, the “gateway” extension of Ralph Appezzato Memorial Parkway, a waterfront park and retail amenities, and a significant contribution towards a new ferry terminal in the Seaplane Lagoon. These major investments help to minimize the uncertainty about the schedule and commitment toward infrastructure in other parts of Alameda Point, including the Enterprise District.
On October 20, 2015, the City Council approved a new approach for development at the Enterprise District at Alameda Point that focuses on attracting major commercial businesses or “end users,” instead of commercial developers. The staff report (Exhibit 2) outlined the three-phase approach that is tied closely to the Site A development milestones over the next 24-36 month period and uses them to draw attention to the Enterprise District. This approach provides the greatest flexibility in marketing and use of the site until an interested commercial user or developer is identified. The Council also approved staff’s recommendation to use Cushman & Wakefield to market the Enterprise District and leverage their existing knowledge and experience at Alameda Point and the many connections throughout the Bay Area.
The approach to attracting new jobs in the Enterprise District builds upon the strong leasing activity in the Adaptive Reuse area and leverages the City’s current leasing strategy at Alameda Point of targeting high-profile and attractive tenants, such as Google, and clusters of industries, such as clean-tech, food and beverage manufacturing users and artisan makers. This leasing strategy and activity lays the foundation for commercial expansion and attraction elsewhere in Alameda Point, including the Enterprise District. The Alameda Point leasing program consists of 1.8 million square feet of commercially leased space for approximately 66 businesses and 1,000 employees.
At the October 20th meeting, the City Council also directed staff to return to the City Council with a written document that consolidated the information provided in the staff report and presentation into a single stand-alone document that could be reviewed, referenced and updated as necessary and provide 6-month updates. Staff has prepared that document for City Council acceptance (Exhibit 3) and a presentation on the first 6-month update.
On July 20, 2016, at the inaugural meeting of the Mayor’s Economic Development Advisory Panel, staff presented the document describing the City’s approach to attracting development to the Enterprise District at Alameda Point and solicited their feedback. The Mayor’s Panel was supportive of the document and recommended no changes. Draft minutes from their discussion are attached as Exhibit 4.
DISCUSSION
This staff report provides: (1) an overview of the format and content of the stand-alone document, and (2) a 6-month update on the performance of the new approach to development, including a discussion of the expected deliverables and metrics to assess performance. Staff believes that the new approach is being implemented consistent with the intended goals and work plan and recommends continuing with the current approach.
I. Summary of Enterprise District Approach to Development Document
Overall, the document consolidates the information and recommendations from the October 20th staff report and presentation and provides a roadmap for attracting development to the Enterprise District at Alameda Point. The stand-alone document outlines the goals and vision for what types of development are envisioned for the area and recommends an approach for how to attract the desired types of uses. It also outlines metrics that will be captured to evaluate the performance of the approach, and, in particular, Cushman & Wakefield’s efforts. The document is not meant to be used as marketing collateral, but rather as a guide to the vision and approach to development. Below is an overview of each of the sections of the document:
• Background -describes the previous solicitation process in 2014 and the reasons a new approach is needed.
• Enterprise District Vision and Goals -describes the land use and zoning framework for the area and the types of development envisioned.
• Approach to New Development in the Enterprise District- describes the three phases of the new approach and the significance of tying it to the Site A development lifecycle. The marketing tactics and metrics for each phase is described in this section.
• Roles and Responsibilities -explains the role of Cushman & Wakefield in marketing the site, how they were selected and what deliverables they are responsible for under their contract with the City. This section also explains what role the City has in the attraction efforts.
• Deliverables and Metrics -describes the tasks and deliverables that will be performed by Cushman & Wakefield and will serve as the basis for evaluating the Strategy.
• Conclusion - summarizes the expected outcomes of the Strategy
The document will be posted on the Alameda Point website to keep the community informed of how the City is approaching the marketing and attraction of users to the Enterprise District.
II. 6-month Status Update (January - June 2016)
As presented in the document, the first phase is the Awareness Phase, which is tied to the pre-infrastructure construction and Phase 1 closing (9-14 month duration) of the Site A development. The goals during this phase are to raise awareness of the Enterprise District opportunity with a focus on the commercial brokerage community and identifying initial corporate or institutional users that may be an appropriate fit for the Enterprise District. Below is a table of the tasks and deliverables completed by Cushman & Wakefield in the most recent six-month period, corresponding exhibits or links to the marketing collateral, and the metrics associated with each deliverable.
In addition to the achieving the metrics above, Cushman & Wakefield compiled some of the valuable anecdotal feedback they received from their visits, presentations and inquiries (see below table). These comments help give insight into how the brokerage community and end-users are perceiving the Enterprise District opportunity, the timing of their development decisions and marketability of the site. This type of feedback will help guide the on-going marketing efforts of Cushman & Wakefield, as well as inform the City’s decision-making process for future uses of the Enterprise District.
|
Industry |
Feedback (quotes) |
|
Life Sciences |
-Attracted by availability of land, Site A housing, and potential ferry terminal -Access concerns |
|
Technology |
Excited about expansion options |
|
Food/Beverage |
Concern about timing of infrastructure, potential timing risks |
|
Retail |
-Access is a concern, but new housing seen as a plus and future ferry connectivity to SF -Term lease opportunity preferred |
As is shown in the tables above, Cushman & Wakefield has completed the deliverables outlined in the Phase 1 - Awareness Approach for the first 6-month period, except for the article in the regional press. They have indicated that the article will likely be published once Site A breaks ground on the infrastructure construction. Staff recommends continuing with the current approach for the next six-month period.
FINANCIAL IMPACT
There is no financial impact to the City’s General Fund or Base Reuse Department budgets (Fund 858) relating to reviewing the Alameda Point Enterprise Approach to Development.
ENVIRONMENTAL REVIEW
No environmental review is required as accepting the document for the Enterprise District is not a project as defined under CEQA. CEQA Guidelines, section 15378.
RECOMMENDATION
Accept the document outlining the approach to attracting development to the Enterprise District at Alameda Point and a 6-Month status update.
Respectfully submitted,
Jennifer Ott, Base Reuse Director - Alameda Point
By,
Michelle Giles, Redevelopment Project Manager
Exhibits:
1. Enterprise District/Map of Site B
2. October 20th, 2015 Enterprise District Staff Report and Presentation
3. Approach to Development in Enterprise District Document
4. Draft minutes from the July 20 Economic Development Panel Meeting
5. Enterprise District Marketing Brochure
6. Sample Broker Blast
7. Sample Targeted Mailer