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Public Hearing to Consider: 1) Approving and Authorizing the City Manager to Execute a Consent to Partial Assignment and Assumption Agreement for the Alameda Disposition and Development Agreement for the Alameda Landing Mixed Use Project; and 2) Authorizing the City Manager to Negotiate and Execute an Operating Memorandum for the Disposition and Development Agreement Consistent with the Term Sheet.
A Final Supplemental Environmental Impact Report for the Alameda Landing Mixed Use Development Project was Certified in Accordance with the California Environmental Quality Act (CEQA) (State Clearinghouse #2006012091) in 2006. An Environmental Assessment for the Proposed Actions has been Prepared. (Community Development 256)
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To: Honorable Mayor and Members of the City Council
Honorable Chair and Members of the Successor Agency to the Community Improvement Commission
From: Jill Keimach, City Manager
Re: Public Hearing to Consider: 1) Approving and Authorizing the City Manager to Execute a Consent to Partial Assignment and Assumption Agreement for the Alameda Disposition and Development Agreement for the Alameda Landing Mixed Use Project; and 2) Authorizing the City Manager to Negotiate and Execute an Operating Memorandum for the Disposition and Development Agreement Consistent with the Term Sheet.
A Final Supplemental Environmental Impact Report for the Alameda Landing Mixed Use Development Project was Certified in Accordance with the California Environmental Quality Act (CEQA) (State Clearinghouse #2006012091) in 2006. An Environmental Assessment for the Proposed Actions has been Prepared.
BACKGROUND
The actions described in this report are intended to facilitate the preparation, review and approval of a mixed use maritime commercial and residential development plan for approximately 39 acres of land located along the Alameda-Oakland Estuary, the “Alameda Landing Waterfront”.
The 39-acre site is the last piece of the 215 acres of former federal land comprising Naval Air Station Alameda East Housing and the Fleet Industrial Supply Center (FISC). The waterfront property is located on the former FISC, which was conveyed to the City via special federal legislation in 1999. In 2002, the City conveyed the land to the former Community Improvement Commission (CIC), now the Successor Agency.
In 2000, the City Council adopted a mixed use Master Plan and Development Agreement, and the CIC approved a Disposition and Development Agreement (DDA) with the Catellus Development Corporation (“Catellus”) for the future transfer of the land to Catellus in phases for redevelopment of the Bayport neighborhood and the 77-acre Alameda Landing property. The 2000 Master Plan called for 1.3 million square feet of employment uses, approximately 586 housing units (Bayport), a school (Ruby Bridges School) and a waterfront park.
In 2006, at Catellus’ request, the City Council/CIC approved a series of amendments to the Master Plan, a new DDA, and two new Development Agreements for the project. The 2006 amendments revised the land use program for the 77-acre Alameda Landing property from the 1.3 million square feet of employment uses to allow for 300 housing units, 300,000 square feet of retail, 390,000 square feet of waterfront office/commercial, 10,000 square feet of waterfront retail, and a 20,000 square foot waterfront health club and an eight-acre public waterfront park.
In 2016, Catellus approached the City of Alameda with a proposal to modify the development plans for the final phase of the Master Plan to allow residential use on the waterfront. Staff and the Planning Board, as part of several study sessions, encouraged Catellus to move forward with a mixed use project that included commercial, as well as residential uses. Over the last six to nine months, Catellus has been working with Bay Ship and Yacht to develop a maritime commercial and residential mixed use plan for the site.
On June 12, 2017, the Planning Board voted to recommend that the City Council approve a Master Plan amendment described in a separate July 18, 2017 staff report to the City Council. The amended Master Plan allows for a maritime commercial and residential mixed use plan for the final phase of the Bayport/Alameda Landing Master Plan to be developed consistent with the goals of the MX zoning.
In addition to the City Council actions introducing an Ordinance amending the Master Plan, consenting to the Partial Assignment and Assumption Agreement for the Development Agreement (Commercial), and authorizing the City Manager to negotiate and execute an Operating Memorandum for the Development Agreement, the Successor Agency needs to take certain actions relating to the Alameda Landing DDA.
Consent to the Partial Assignment and Assumption Agreement (DDA) to FISC Properties, LLC, the Bay Ship and Yacht entity (Exhibit 1), and negotiation of an Operating Memorandum for the DDA consistent with the term sheet, attached as Exhibit 2, are necessary to implement the maritime commercial and residential mixed use project.
DISCUSSION
As noted above, in addition to City actions that must be approved to permit the proposed maritime commercial and residential mixed use project to move forward, there are several other actions the Successor Agency must take. Catellus, as the Master Developer, must partially assign its rights and obligations under the DDA to FISC Properties, LLC, and FISC Properties, LLC must assume those rights and obligations for that portion of the property that it is acquiring from Catellus. The Successor Agency must consent to the Partial Assignment and Assumption Agreement between Catellus and FISC Properties, LLC.
Staff is also recommending that the City Manager be authorized to negotiate and execute an Operating Memorandum for the DDA. The DDA has a provision that allows for clarifications to the agreement. These clarifications provide guidance in implementing the DDA. Term sheet outlining the proposed clarifications is attached to the staff report.
The Consent to Partial Assignment and Assumption Agreement and the term sheet for the DDA Operating Memorandum are discussed below.
Consent to Partial Assignment and Assumption Agreement for the Alameda Landing Mixed Use Project Disposition and Development Agreement
Because the Development Agreements (Commercial and Residential) and DDA contain all of the rights and obligations regarding the redevelopment of Alameda Landing, those agreements must be partially assigned as Catellus, the master developer, conveys property for development to end users and third party developers who construct the vertical improvements following construction of the backbone infrastructure improvements. The residential and commercial Development Agreements and DDA have previously been partially assigned to Tri Pointe Homes, Target and the purchaser of the commercial shopping center. With each of these partial assignment and assumption agreements, the new property owners have taken on rights and responsibilities under the Development Agreement and DDA, and Catellus has been released from those rights and responsibilities. Because Catellus is proposing to sell 17 acres to FISC Properties, LLC to adaptively reuse 364,000 square feet of warehouses for maritime commercial uses, the DDA must be partially assigned to the purchaser.
The partial assignment and assumption agreement for the DDA:
1. allocates all rights and obligations under the DDA between FISC Properties LLC as the Transferee and Catellus as the Master Developer, and Mitigation, Monitoring and Reporting Plan (MMRP) which implements the requirements of the EIR;
2. provides cross-default protection that precludes the Successor Agency from enforcing any action against FISC Properties, LLC in the event of a Catellus default under the DDA, or from enforcing any action against Catellus in the event of a FISC Properties, LLC default under the DDA; and
3. releases Catellus from the obligations of the assigned interests being assigned to FISC Properties, LLC.
It is recommended that the Successor Agency consent to the Partial Assignment and Assumption Agreement for the DDA.
Term Sheet for Alameda Landing Mixed Use Project DDA Operating Memorandum
The DDA has a provision that allows for operating memoranda that serve as clarification of the Agreement. An Operating Memorandum is necessary to permit the commercial maritime and residential mixed use project to move forward. Staff is requesting that the Successor Agency authorize the City Manager to negotiate and execute an operating memorandum based on the attached term sheet.
As noted in the July 18, 2017 City Council staff report on the Alameda Landing project, based on the similarity of the clarifications needed for both the Development Agreement and DDA, the term sheet reflects the issues that will be addressed in the DDA Operating Memorandum and notes that a corresponding Operating Memorandum for the Development Agreement will also be prepared.
The operating memoranda will address the following issues:
1. Technical boundary modifications necessary to expand the currently existing Conveyance Parcel 7 to create the property to be conveyed to FISC Properties, LLC.
2. Development obligations when the property being conveyed to FISC Properties, LLC is being adaptively reused and when it is being redeveloped as a new construction project.
3. Early Office and Backbone Infrastructure Phase. The adaptive reuse of the existing warehouses for maritime commercial use will be treated as the Early Office and Backbone Infrastructure Phase under the DDA. This will confirm phasing of backbone infrastructure improvements and phasing of the development of the balance of the property.
4. Extension and separation of the Second and Third Phase Outside Development dates as they apply to the adaptive reuse and residential parcels and clarification of the DDA termination date.
5. Determination that the requirements regarding undergrounding the 115kV lines are moot.
6. Clarification of DDA attachments regarding phasing of backbone infrastructure improvements and conveyance parcels so that the attachments are consistent with the DDA text.
Staff believes that Catellus is proposing a project along the Alameda Landing waterfront that is consistent with the goals of the MX zoning, the City’s General Plan, and the Bayport/Alameda Landing Master Plan that calls for the development of a mixed use project. The expansion of the City’s maritime commercial base addresses one of the key strategies of the draft Economic Development Strategic Plan. The proposed residential portion of the project supports the City’s efforts to meet its regional housing needs obligations. Taken together, the project will create new jobs, provide affordable and market-rate housing and a new 4.5-acre public waterfront park, along with a water taxi and kayak launch. Therefore, staff is recommending that the Successor Agency approve the actions described in the staff report to allow the project to move forward.
FINANCIAL IMPACT
There is no adverse impact to the General Fund to approving the Consent to Partial Assignment and Assumption Agreement for the DDA and authorizing the City Manager to negotiate and execute an Operating memorandum for the DDA to facilitate a maritime commercial and residential mixed use project at the Alameda Landing waterfront.
Consistent with existing City policy that former military property pay for the cost of civilian reuse, there is an existing Municipal Services District that will pay for the on-going maintenance costs related to the public backbone infrastructure and waterfront park. In addition, conveyance of the property from public ownership to private ownership and development will add the property to the City’s tax rolls and generate new property tax revenue for the General Fund.
The Successor Agency’s obligation to reimburse the developer for public infrastructure improvements up to a maximum of $35.5 million is an approved enforceable obligation under the Recognized Obligation Payment Schedule (ROPS) and on-going reimbursements will be included in future appropriations for the Successor Agency budget.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The Partial Assignment and Assumption Agreement has been prepared pursuant to the terms of the 2006 Alameda Landing Mixed Use Project DDA. Preparation of operating memoranda is contemplated in Section 13.10 of the DDA.
ENVIRONMENTAL REVIEW
On December 5, 2006, the City Council certified the Final Environmental Impact Report for the Alameda Landing Mixed Use Development Project (a Supplement to the 2000 Catellus Mixed Use Development Project EIR) in accordance with the California Environmental Quality Act (CEQA) (State Clearinghouse #2006012091). The City has prepared several addenda to the 2006 SEIR.
An Environmental Assessment has been prepared for the proposed Master Plan amendment and related actions. The Environmental Assessment concludes that, provided that the trip cap established by the Master Plan is maintained, the adoption and implementation of the Master Plan amendment will not result in any new or more severe environmental impacts than were disclosed in the 2006 EIR.
RECOMMENDATION
Hold a public hearing and:
1) Approve and authorize the City Manager to execute a Consent to Partial Assignment and Assumption Agreement for the Alameda Disposition and Development Agreement for the Alameda Landing Mixed Use Project; and
2) Authorize the City Manager to negotiate and execute an Operating Memorandum for the Disposition and Development Agreement Consistent with the Term Sheet.
Respectfully submitted,
Debbie Potter, Community Development Director
Financial Impact section reviewed by,
Edwin Gato, Financial Services Manager
Exhibits:
1. Partial Assignment and Assumption Agreement
2. Term Sheet for DDA Operating Memorandum