Title
Review and Approve Mayor’s Economic Development Advisory Panel Minutes from July 17, 2017
Body
DRAFT MEETING MINUTES
SPECIAL MEETING OF THE
MAYOR’S ECONOMIC DEVELOPMENT ADVISORY PANEL
WEDNESDAY, JULY 17, 2017
1. CALL TO ORDER:
ROLL CALL: Present: Dr. Jowel Laguerre, Adam Elsesser,
Remy Monteko, and Brock Grunt.
Absent: David Mik, Mark Sorensen, Erik Chubb, and
Lance Winters
No quorum present.
(Panel members Mik, Chubb, and Winters had recused themselves from Item 5-A, which was the reason for their absence.)
2. MINUTES:
Did not approve due to lack of a quorum.
3. ORAL COMMUNICATIONS--PUBLIC: None
4. UNFINISHED BUSINESS: None
5. NEW BUSINESS ITEMS:
Panel member Grunt recused himself at the meeting from Item 5-A. The Panel agreed to hear Item 5-B first, so that Mr. Grunt may leave the meeting following that item.
5-B Status Report on the Economic Development Strategic Plan
City of Alameda’s Economic Development Manager Lois Butler provided a brief status report. The full staff report can be found here:
<https://alameda.legistar.com/LegislationDetail.aspx?ID=3099840&GUID=ECD85D6B-3273-4D43-9CBC-3CC18CA0D254&FullText=1>
• Following the presentation, Panel member Laguerre asked what steps will occur over the next few months.
• Ms. Butler said that the City will be scheduling the initial set of Task Force meetings. Staff is waiting for some of the Task Force members to return from vacation before it can start scheduling the meetings. Staff anticipates that the first meeting will be in late August or early September.
5-A Recommendation to Approve Allocation of Fee Credits for East Bay Municipal Utility District System Capacity Charges and Wastewater Capacity Fees at Alameda Point for City Facilities, Existing Tenants and Upcoming Transactions and Provide Direction on Criteria for Allocation of Fee Credits for Future Projects
Ms. Butler provided a presentation about the EBMUD Credit Allocation. The staff report and attachments can be found at:
<https://alameda.legistar.com/MeetingDetail.aspx?ID=556876&GUID=B6DB4B0F-7959-443F-9887-2F63E1A9ED3B&Options=info&Search>=
At the close of the presentation, panel members were asked to provide f comments about the proposed EBMUD Credit Allocation. Panel member comments are summarized below.
• Panel member Elsesser noted that the ratio between the System Capacity Charges (SCC) and the Wastewater Capacity Fees (WCF) is different. Ms. Butler clarified that the numbers were calculated based on square footage of City-owned facilities, Tenant Buildings, etc. Furthermore, the amount is 100 percent of what the East Bay MUD (EBMUD) fees would cost. Debbie Potter, the City of Alameda’s Community Development Director, clarified that it is usage versus square footage.
• Panel member Monteko asked if staff considered benefits and drawbacks of using this incentive for City-owned facilities rather than leverage it further to incentivize additional development. You might potentially get more out of it because once you sell, you can put those proceeds towards infrastructure. In a way, if you’re using this towards City facilities, you’re dipping into that pot that you can incentivize other development rather than cover the City’s own needs.
• Ms. Potter explained that the City adopted a policy 10+ years ago that said the base shall pay for itself. The City has a policy that it does not want to subsidize the civilian reuse of the military property. Recommending that the City facilities be fully covered is consistent with that policy.
• Panel member Elsesser stated that it is leveraging so the City could get more money by using these credits. There’s a risk to that because you’re making a decision in advantage. The risk might be worth taking. The focus is on existing tenants that have already made an investment at Alameda Point. They are prioritized over prospective businesses coming in. Acknowledge that folks have made a big investment, take the next step, ownership or growing.
• Ms. Butler clarified that the recommendation takes into account business retention, in that, if existing tenants had to pay that huge amount all of the sudden, it might put them out of business.
• Panel member Monteko asked what triggers businesses to pay the fees.
• Ms. Butler responded that fees would be payed if 1) The business has an option to purchase and exercises their option to purchase or 2) The City doing improvements into the area, which the City fully intends to do, so if the City brings in the infrastructure they will have to pay it. When the City connects them to the EBMUD meter as a tenant, they will have to pay that fee.
• Panel member Dr. Laguerre said that he likes the criteria for future projects. It is very good to think about investing these dollars for the future. He stated that he wished it could be more, but it is a good step.
• Panel member Elsesser asked if there is an expectation that most of these tenants and those with purchase options are going to get this? Is this part of what the deal has been or is it a surprise to them.
• Ms. Potter explained that the credit is relatively new, there is a joint powers authority. It’s not an official EBMUD system, but it will be transitioning and the negotiations have been ongoing between the City and EBMUD for a credit that recognizes that the City has been paying into a service. This deal has been negotiated and it is a question on how to apply it. The tenants are aware know then is happening, they won’t know if they will benefit from it until the Council takes action.
• Panel member Elsesser asked if there is an alternative for paying out the credits. Ms. Potter mentioned that an alternative that was considered gave less than 100% of credits to existing tenants. Adam Elsesser asked if they would still buy if it was 80% vs. 100% in credits.
• Ms. Potter mentioned that the first building closed at the Base within the last few weeks. There are a few businesses that have rights to purchase and they are looking to exercise their rights to purchase. Some may be holding off until this is decided.
• Panel member Monteko asked if the tenants know about the credit. In the future wouldn’t this come out of their purchase price?
• Ms. Butler answered that it’s a credit that EBMUD offers, they still need to pay the City and then the credit is transferred to them.
• Panel member Elsesser said that’s the point, we want them to exercise the option to purchase. That way the City will get the money so the City can do the infrastructure improvements. Is there another logical allocation of this given what the City is trying to accomplish at the Point?
• Ms. Potter responded that another option would be to tweak the percentages, reduce them and grow the pot for future development.
• Panel member Monteko asked how 35% (Site A Phase 1) was determined.
• Ms. Butler answered that if 100% was allocated to Site A, Phase 1, it would have taken up most of the credit. The City wanted to make sure that Site A, Phase 1 closes, and 35% would help the closing of the deal.
• Ms. Potter added that construction costs have been escalating and the credits help offset the costs.
• Panel member Elsesser said that he did not have any negative comments. If the buildings with purchase options had less of a percentage (80%, instead of 100%) there would be roughly $2,000,000, which would likely not be enough incentive to change behavior. Focusing on these incentives makes sense. The symbolism is that City acknowledges the risk that they took.
• Ms. Monteko agreed that it was the right thing to do, to acknowledge that they took that risk and we want them to stay and invest. I like the future project criteria, it includes nice community benefits.
6. Written Communications
None.
7. Oral Communications - Panel Members and Staff
None.
8. Adjournment