Title
Adoption of Resolution of Consideration to Alter the Rate and Method of Apportionment of Special Taxes for Community Facilities District No. 13-1 (Alameda Landing Public Improvements). (Community Development 256)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Adoption of Resolution of Consideration to Alter the Rate and Method of Apportionment of Special Taxes for Community Facilities District No. 13-1
BACKGROUND
On January 7, 2014, the City Council adopted Resolution No. 14880 as part of the formation of the City of Alameda Community Facilities District No. 13-1 (Alameda Landing Public Improvements) (CFD), and adopted Resolution No. 14881 determining that the City could issue, for the CFD, up to $20,000,000 in bonds (Bonds) to finance certain public facilities being constructed by Catellus Alameda Development, LLC (developer) in connection with the development of Phase 1 of Alameda Landing. These facilities included the backbone sanitary sewer, storm and water systems and construction of Mitchell and Stargell Avenues and Fifth Street.
The Resolution that formed the CFD approved a Rate and Method of Apportionment of Special Taxes for the District (RMA), which set forth the manner in which the City Council will levy special taxes on property in the CFD to repay the Bonds and pay the costs of the City to administer the CFD. Subsequently, in connection with proceedings to add Alameda Landing Phase 2 to the CFD, the City Council conducted proceedings to alter the RMA and to increase the bonded debt limit of the CFD to $40,000,000, pursuant to Resolution No. 15015 adopted by the City Council on April 7, 2015. On March 17, 2016, the City issued $15,415,000 principal amount of the Bonds to finance the improvements described above.
The City has received a petition (Exhibit 1) from the developer requesting that it alter the RMA for the CFD to exempt, from the levy of special taxes for the CFD, Conveyance Parcel 7, which is the portion of Alameda Landing to be conveyed to Bay Ship and Yacht (BSY), unless and until it is developed for a use other than its existing use of warehouse space. In the petition, the developer has agreed to pay the costs of the City to conduct the necessary proceedings to alter the RMA. Adopting the resolution referenced in this staff report sets a public hearing for October 3, 2017, to consider the proposed alteration of the RMA.
DISCUSSION
On July 18, 2017, the City Council introduced an ordinance to amend the Bayport/Alameda Landing Master Plan to allow a Maritime Commercial and Residential Variant. The Maritime Commercial and Residential Variant land use program permits an alternative to the development program for Sub-Areas 1 and 2, to facilitate the reuse and revitalization of the Alameda Landing Waterfront. The developer proposes to sell the western-most portion of the waterfront property (approximately 17 acres known as Conveyance Parcel 7) to BSY, who will renovate 364,000 square feet of existing warehouse space for maritime and related commercial uses. The developer will build up to 400 residential units and a four-acre waterfront park on the remainder of the property. A second reading and adoption of the Ordinance amending the Master Plan occurred on September 5, 2017, and the Ordinance will be effective October 5, 2017.
As part of the due diligence for the sale of Conveyance Parcel 7 to BSY, the developer determined that the amount of special tax levy that would be due under the current RMA would render BSY’s proposed project to adaptively reuse the warehouses economically infeasible. When the RMA was adopted as part of the CFD proceedings in 2015, it was anticipated that new development would be constructed, along with new public infrastructure, and a mechanism to partially fund those improvements with tax-exempt bonds would be appropriate.
At this time, the anticipated project is a combination of adaptive reuse and new construction. The developer has agreed to fund the public infrastructure required for BSY’s adaptive reuse project without the benefit of the CFD proceeds a special tax levy on Conveyance Parcel 7 would provide. Therefore, the developer has petitioned the City to conduct a vote of the registered voters residing in the CFD to amend the RMA to exempt Conveyance Parcel 7 from payment of the special tax unless and until it is redeveloped with new uses consistent with the Master Plan (e.g new office development).
The City has been advised by NBS, the firm currently assisting the City in administering the special tax levy on property in the CFD, that the alteration to the RMA proposed by the developer exempting Conveyance Parcel 7, will not change the maximum special tax that is currently being levied on parcels in the CFD to repay the Bonds. The developer has indicated that in the event that it requests that the City issue additional bonds for the CFD to pay for future backbone infrastructure, those bonds will be sized such that the new construction can support the debt service for the new bonds solely by means of the special tax levy on the parcels being developed as new construction.
The CFD was formed pursuant to the City’s Special Tax Financing Improvement Code (Municipal Code Section 3-70.1 and following), which provides for a process to alter the RMA for the CFD. That process includes the adoption by the City Council of the resolution referred to in this staff report, which describes the proposed alteration, and that calls for a public hearing regarding the alteration. The Resolution of Consideration for the CFD sets October 3, 2017, as the date for a public hearing on the proposed changes to the RMA for the CFD.
Following the public hearing, the City Council, if it decides to proceed with the alteration, will consider adoption of a resolution calling for a special mail ballot election of the registered voters residing in the CFD to approve the alteration. The election will be conducted by the City Clerk with the assistance of the City’s Bond Counsel and the Special Tax Consultant for the CFD. If more than 2/3rds of the votes cast at the election are in favor of the alteration, the City Council will canvass the election and declare that the alteration is effective.
FINANCIAL IMPACT
There is no impact to the General Fund to modify the RMA for the CFD. All costs related to the alteration proceedings are to be paid by the developer as agreed to in its petition. The annual costs to administer the CFD and the Bonds are to be paid from annual special taxes levied on property included within the boundaries of the CFD.
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) and subsequent addenda. The CFD, and the consideration of the alteration of the rate and method of apportionment for the CFD, are consistent with, and implement the prior approvals and will not result in any new or substantially more severe environmental impacts than were previously identified in the Supplemental EIR and addenda.
RECOMMENDATION
Adopt a Resolution of Consideration to alter the rate and method of apportionment of special taxes for Community Facilities District No. 13-1.
Respectfully submitted,
Debbie Potter, Community Development Director
By,
Debbie Potter, Community Development Director
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibit:
1. Petition of the Developer