Title
Recommendation to Approve an Implementation Term Sheet with Mid-Pen Housing, Alameda Point Collaborative, Building Futures with Women and Children, and Operation Dignity for the Relocation and Construction of New Supportive Housing Facilities on a 10.4-Acre Parcel in the Main Street Neighborhood at Alameda Point. (Base Reuse 819099)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Recommendation to Approve an Implementation Term Sheet with Mid-Pen Housing, Alameda Point Collaborative, Building Futures with Women and Children, and Operation Dignity for the Relocation and Construction of New Supportive Housing Facilities on a 10.4-Acre Parcel in the Main Street Neighborhood at Alameda Point
BACKGROUND
On December 15, 2015, the City Council unanimously approved an Exclusive Negotiation Agreement (ENA) with Mid-Pen Housing, as Developer, and Alameda Point Collaborative (“APC”), Building Futures with Women and Children, and Operation Dignity (referred to as “The Collaborating Partners”) for a 10.4-acre site in the southeastern area of the Main Street Neighborhood, just south of West Midway, east of Orion Street in the Main Street Neighborhood at Alameda Point (Site) (Exhibit 1) to relocate and reconstruct new facilities to support the long-term needs of their communities (Project).
The Collaborating Partners’ existing leased campus consists of mostly old Navy buildings spread across 34 acres (Exhibit 2). The Project would consolidate the campus to a smaller footprint of 10.4 acres, allowing the Collaborating Partners to own their own property which will facilitate relocation of existing residents into new state-of-the-art facilities designed with supportive services interwoven into the community. The remaining land would be available for private development, under the discretion of the City Council, to help fund the infrastructure for both the Collaborating Partners’ site and the new development.
The Project will continue to allow the City to meet its obligations as the Local Reuse Authority to provide housing for formerly homeless households as defined by the Legally Binding Agreements in connection with the closure of the Alameda Naval Air Station.
On December 5, 2016, the City Council approved a First Amendment to the ENA (Exhibit 3) to extend the term of the agreement to the end of 2017 to allow time for the Main Street Neighborhood Specific Plan to be approved. The First Amendment also added new requirements and terms, including: 1) approval by the City Council of an Implementation Term Sheet no later than April 30, 2017 to establish the essential business terms and framework for the transfer and development of the property; 2) a negotiated Disposition and Development Agreement (“DDA”) and Development Site Plan no later than December 31, 2017; and 3) an extension of the term at the sole discretion of the City Manager for no more than two times for up to three months each time.
A similar process was used in the negotiations of the Site A DDA with the City Council approving a non-binding term sheet to use as a guide to address key issues in the DDA at the same time that the Development Plan was reviewed and approved through the City’s planning process.
The Main Street Neighborhood Plan was approved by the City Council on March 21, 2017.
DISCUSSION
Over the last four months, the City has negotiated an Implementation Term Sheet (Exhibit 4) with Mid-Pen Housing and the Collaborating Partners, which outlines the key business and financial terms of a subsequent DDA between the City and the Collaborating Partners. A summary of the key terms of the Implementation Term Sheet and a description of the key next steps are provided below:
a. Project Description. The Project is proposed to consist of rebuilding the existing two-hundred (200) supportive housing units currently dispersed across 34 acres at Alameda Point’s Main Street Neighborhood onto a 10.4-acre parcel, south of W. Midway, west of Main Street, and east of Orion Way (Site). The Project will include the addition of approximately 40,000 square feet of community spaces for services programing, administrative office for the Collaborating Partners, and on-site property management and resident services. Sixty-seven (67) additional units are requested to accommodate the space needs of the formerly homeless families, individuals and veterans. The Project will also include the remaining term of the leasehold for Ploughshares Nursery and the Farm with a potential amendment to include an option to purchase at the end of the leasehold.
b. Collaborating Partners Responsibilities. Mid-Pen and the Collaborating Partners will terminate existing leases with the City, including Buildings 67 and 101 in the Adaptive Reuse area, and design, permit and construct landscape and buildings consistent with a to-be-approved Development Plan, consistent with the Main Street Neighborhood Specific Plan, and in accordance with an agreed upon Phasing Plan and Performance Schedule. APC will also terminate its leasehold interest in Building 92 as part of a private lease and development transaction with the City assuming their need to maintain some lease income is addressed.
c. City Responsibilities. The City will facilitate fee title conveyance of the Site free of any encumbrances and facilitate the financing and construction of backbone infrastructure and site improvements through best efforts to dispose of 21.9 acres of property adjacent to the Project for market rate development consistent with the Main Street Neighborhood Plan. The City shall have no obligation to make a financial contribution toward the cost of the backbone infrastructure but will use best efforts to reach agreement with a qualified developer that will provide for the backbone infrastructure.
d. Term. 15 years.
e. Phasing. The DDA will include a Phasing Plan and Performance Milestone Schedule for each phase of the Project, including a detailed schedule for relocating existing residents, obtaining entitlements, securing financing for each Phase of the Project, conveyance of the property, and construction of the vertical development consistent with the Term.
f. Infrastructure. The City will make best efforts to enter into agreement with a qualified developer to provide the backbone infrastructure for the proposed use of the Site consistent with the MIP and the approved Collaborating Partner’s Development Plans including: demolition, geotechnical mitigation, construction of backbone streets and utilities stubbed to the Project site.
g. Conveyance of Land. Upon the Collaborating Partners removal of encumbrances on the 34 acres of leased buildings with terms ranging from 41 to 59 years, the City will convey fee interest in the Site to the Collaborating Partners in phases in accordance with the Phasing Plan and the Performance Milestone Schedule.
h. Financing. Mid-Pen and the Collaborating Partners will prepare a feasible financing plan and project pro forma for the predevelopment and vertical development of the Project, including timing and sources of funds for both debt and equity sources for each phase of the Project.
i. Project Stabilization Agreement. Mid-Pen and the Collaborating Partners agree to comply with the City’s project stabilization agreement (PSA) public/private policy or negotiate in good faith a separate PSA with the Building Trades.
Next Steps:
If the City Council approves staff’s recommendation this evening, City staff, along with Mid-Pen and the Collaborating Partners, will immediately commence working together on the following key tasks:
• Negotiation of a DDA document that builds upon the key terms contained in Exhibit 4 (Term Sheet);
• Preparation of a Development Plan application and any other relevant entitlements for review and approval by the Planning Board.
This process is similar to the process used for the Site A negotiations which started with City Council approval of an initial non-binding term sheet. The term sheet does not obligate the City to the terms described above. It provides only an initial starting place for staff to begin crafting a DDA. The City Council retains full discretion to negotiate different or new terms if necessary. Prior to City Council approval of the DDA, staff will return with an update on the DDA’s progress and to get feedback on the negotiated terms at that time.
City staff will continue to use its email lists, webpages, and social media to inform the Alameda community about its next steps for the Project.
FINANCIAL IMPACT
There is no financial impact to the City’s General Fund related to the approval of the Implementation Term Sheet for development of the 10.4-acre parcel in the Main Street Neighborhood. City staff from various City departments and its consultants and attorneys will be expending time and effort on negotiation of a DDA and Development Plan over the next 6-8 month. These expenditures will be funded by the Base Reuse Department’s current budget.
ENVIRONMENTAL REVIEW
On February 4, 2014, the City Council certified a Final Environmental Impact Report (State Clearinghouse No. 2013012043) for the Alameda Point Project including Main Street Neighborhood, which evaluated the potential environmental impacts of the Alameda Point Zoning Ordinance and development in the MSN Plan area. The EIR analysis helped shape the MSN Plan to minimize potential environmental impacts and support a sustainable development. All development within the MSN Plan area is required to comply with the mitigation measures adopted by the City Council for Alameda Point.
RECOMMENDATION
Approve an Implementation Term Sheet with Mid-Pen Housing, Alameda Point Collaborative, Building Futures with Women and Children, and Operation Dignity for the Relocation and Construction of New Supportive Housing Facilities on a 10.4-Acre Parcel in the Main Street Neighborhood at Alameda Point.
Respectfully submitted,
Jennifer Ott, Base Reuse Director
By,
Michelle Giles
Redevelopment Project Manager
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Collaborating Partners Site
2. Map of Collaborating Partners Existing Campus
3. First Amendment to the ENA
4. Implementation Term Sheet
a. Exhibit A - Map of Collaborating Partners Existing Campus
b. Exhibit B - Collaborating Partners Site