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File #: 2018-5685   
Type: Consent Calendar Item
Body: City Council
On agenda: 7/10/2018
Title: Recommendation to Authorize the Acting City Manager to Approve in Substantial Form and Issue a Request for Qualifications (RFQ) from Developers for a New Development Site in the Main Street Neighborhood at Alameda Point (West Midway Project) and Form of Exclusive Negotiation Agreement to Be Entered into with a Selected Developer (Base Reuse 819099)
Attachments: 1. Exhibit 1 - Zoning Map, 2. Exhibit 2 - Draft RFQ

Title

 

Recommendation to Authorize the Acting City Manager to Approve in Substantial Form and Issue a Request for Qualifications (RFQ) from Developers for a New Development Site in the Main Street Neighborhood at Alameda Point (West Midway Project) and Form of Exclusive Negotiation Agreement to Be Entered into with a Selected Developer (Base Reuse 819099)

Body

 

To: Honorable Mayor and Members of the City Council

 

From: Elizabeth D. Warmerdam, Acting City Manager

 

Re: Recommendation to Authorize the Acting City Manager to Approve in Substantial Form and Issue a Request for Qualifications (RFQ) from Developers for a New Development Site in the Main Street Neighborhood at Alameda Point (West Midway Project) and Form of Exclusive Negotiation Agreement to Be Entered into with a Selected Developer

 

BACKGROUND

 

On May 15, 2018, the City Council approved a Disposition and Development Agreement (DDA) with MidPen Housing Corporation, Alameda Point Collaborative, Building Futures with Women and Children and Operation Dignity (Collaborating Partners) for the Rebuilding the Existing Supportive Housing at Alameda Point (RESHAP Project), which consolidates 34 acres of supportive housing into a 9.7 acre parcel (Exhibit 1) and allows the supportive housing providers to own the property and construct  267 very low-and low-income units. 

As a condition precedent to the transfer of land, the City is required to use commercially reasonable efforts to identify a developer to finance and construct the necessary backbone infrastructure for the RESHAP Project as a condition of building new market rate development on the adjacent land. City staff proposes issuing a Request for Qualifications (RFQ) from developers interested in developing the adjacent land, referred to in the attached map as West Midway Project (Exhibit 1). 

The West Midway Project consists of 22.8 acres within the Main Street Neighborhood sub-district, located south of West Midway and bounded by Main Street on the east, Pan Am Way on the west and West Tower to the south, excluding the RESHAP Project site.  The project does not include the homes known as the Big Whites, the housing to the south of the Big Whites or the former Admiral’s home.  The RFQ will include the requirement to construct all of the necessary backbone infrastructure for the entire 32.5-acre area south of West Midway Ave, including for the RESHAP Project site.

Staff is seeking Council’s authorization for the Acting City Manager to approve in substantial form and issue the attached RFQ for developers, using a selection process similar to that for Site A, involving a rigorous staff and stakeholder review process and an opportunity for community input, before bringing an Exclusive Negotiation Agreement (ENA) with the preferred developer to City Council for approval (Exhibit 2).

 

DISCUSSION

 

Staff has prepared a draft RFQ (Exhibit 2) and a form of ENA attached as Exhibit 10 to the RFQ.  The successful developer will be required to enter into an ENA substantially in the form of the attached ENA, which will be brought back to the City Council for final approval. The RFQ will focus on attracting development opportunities consistent with the City’s existing entitlements, including the General Plan, Zoning Ordinance Amendment, Master Infrastructure Plan for Alameda Point (MIP), Main Street Neighborhood Specific Plan (Main Street Plan), and Alameda Point Environmental Impact Report (EIR).  Development opportunities also need to be consistent with the RESHAP DDA, and will not be allowed to exceed the housing unit cap of 1,425 units at Alameda Point in the General Plan.

The draft RFQ provides a description of the Alameda Point property; the proposed development opportunity; prospective roles of the developer and the City, the required contents of the submittal; the selection process; general conditions; a list of important documents and where to find them; and other relevant exhibits and attachments. The following provides a summary of the key aspects of the RFQ:

1.                     Development Opportunity.  As described above, the West Midway Project is proposed for a transit-oriented mixed-use, mixed income neighborhood with diverse housing options, and a mix of commercial uses.  Below is an outline of the different components of the development opportunity.

 

a.                     Market Rate and Moderate Income Housing

The selected developer is allowed to construct a maximum of 291 units, including 260 market rate and 31 deed-restricted moderate-income housing units on the West Midway Project site.

 

b.                     Affordable Housing

The selected developer is required to meet the 25% affordable housing requirement under the Renewed Hope Settlement Agreement.  The 67 new units being financed and constructed by the RESHAP Project will exceed the very-low and low-income affordable housing requirement for the West Midway Project site (16% of the 25% requirement).  The selected developer would still be responsible for constructing the remaining 9% moderate income units (31 units) on the West Midway Project site to meet the terms of the Renewed Hope Settlement Agreement.

 

c.                     Workforce Housing

The West Midway Project will be required to comply with the Main Street Plan’s development standards that require at least 10% of market rate units be designed to be affordable to households with a household income between 120% and 180% Area Median Income (AMI), referred to in the Main Street Plan as workforce housing. Additionally, preference will be given to proposals that exceed the 10% requirement for workforce housing.

 

d.                     Commercial Development

Commercial development within the West Midway Project site will be highly encouraged around the southeastern and southern edges of the area consistent with the Main Street Plan, which permits and conditionally permits commercial uses that complement current and envisioned uses in the adjacent Adaptive Reuse and Town Center areas, such as “maker” spaces, assisted living, light industrial, neighborhood serving retail, and work/live spaces. 

 

2.                     Developer Submittal.  The RFQ requires interested developers to submit a project description which includes the following:

                     Total number of units (not to exceed 291 units), including market rate units (at least 10% workforce units) and 9% deed-restricted moderate-income units

                     The amount and type of commercial square footage (no limit)

                     The amount of any other proposed uses

The proposal will NOT include a site plan or design renderings of a proposed development at the West Midway Project.  The selection of the preferred developer will solely be based on the qualifications of the developer and the quality of their submittal, including past projects, not on the quality of any design drawings.  This is consistent with the process used to select a developer for Site A. 

As part of the ENA process, the preferred developer will be required to obtain approval of a Development Plan via a public process so that the community, boards and commissions, and the City Council will have opportunities to review and approve the site plan for the West Midway Project site before entering into a binding DDA.

 

3.                     Developer Project Experience.  The RFQ requires developers to demonstrate significant relevant project experience, including photos, site plans, cost and financial information, staffing, and references of comparable completed projects.  Developers will need to assign a seasoned project manager with demonstrated experience on comparable projects. 

 

4.                     Infrastructure Packages.  Based on the MIP, Main Street Plan and the RESHAP Project DDA, staff and the City’s civil engineering consultants have assigned required backbone infrastructure improvements to the West Midway Project that the successful developer will be required to construct as part of the West Midway Project (Infrastructure Package). The Infrastructure Package identifies the initial phasing of infrastructure improvements outlined in the RESHAP DDA and includes demolition and site grading, flood protection measures, backbone streets and utilities required for use of the property, protected bikeways and bike paths.  The Infrastructure Package will also include demolition, geotechnical mitigation, grading and construction of backbone streets and utility connections for the adjacent RESHAP Project site consistent with the RESHAP Project DDA.  Exhibit 8 of the draft RFQ provides a map highlighting the improvements to be included in the Infrastructure Package and current cost estimates of $56 million.  Based on these current estimates, the construction of the Infrastructure Package exceeds the required Development Impact Fee obligations of $1.2 million per acre.

 

5.                     RFQ Selection Process.  Developers will have eight (8) weeks to respond to the RFQ.  An inter-departmental team of staff will review the Statement of Qualifications (SOQ) and select no more than six teams for an interview.  The interview panel(s) will include members of the community and stakeholders.  Staff will then summarize all of the responses to the City Council and recommend no more than two developers to the City Council in a public hearing in January 2019 for further negotiation of a potential term sheet.  The finalists are required to present their relevant experience at a community open house at a time/date to be determined. Staff may seek further direction from the City Council during closed sessions on term sheet negotiations with the finalists regarding the price and terms of payment for the West Midway Project site. Finally, staff will return to the City Council for a public hearing in March 2019 for approval of an ENA with a preferred developer for the West Midway Project site, including a final negotiated term sheet attached to the ENA.  Although the Term Sheet will be non-binding, it will guide negotiations of a DDA with the selected developer.

 

6.                     Transaction and Development Process. As demonstrated by the form of the ENA in Exhibit 10 to the draft RFQ, the ENA period is contemplated as a 12-month process, which results in an approved DDA (i.e., price and terms of payment for the land and development obligations), and an approved Development Plan (i.e., detailed site plan, including backbone and in-tract street alignments and sections, building footprints and massing, landscape concepts, and a phasing plan).  The ENA allows for two three-month administrative extensions by the City Manager.  The ENA also prohibits any assignments or transfers of the rights under the ENA to another developer.  The City’s sole obligations under the ENA are to negotiate in good faith the terms of the DDA, to not negotiate with any other parties regarding the sale of the West Midway Project site and to cooperate with the selected developer in the consideration of the Development Plan. The ENA also requires that the developer provide a $150,000 non-refundable deposit for reimbursement of City expenses for negotiation of the DDA.  Funding for staff time for review and processing of the Development Plan will be handled through the City’s standard planning process.  While these terms are subject to minor changes as part of the RFQ process in response to unique developer proposals, it is staff’s intention that the basic terms of the ENA remain consistent with the attached form of ENA.                     

 

Next Steps

After receiving the City Council’s authorization for the Acting City Manager to approve in substantial form the draft RFQ and Form of ENA, staff will make any necessary revisions and issue the RFQ in August.   

 

FINANCIAL IMPACT

 

There is no financial impact to the City’s General Fund or Base Reuse Fund budgets related to the approval of the RFQ and form of ENA, other than staff time, which is covered in the current Base Reuse Fund Budget.

 

MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE

 

The recommended action is consistent with the General Plan, Zoning Ordinance, Main Street Plan, and RESHAP DDA with the Collaborating Partners and Milestone Schedule approved by the City Council on May 15, 2018, requiring staff  to use commercially reasonable efforts to release a RFQ to select a developer and negotiate a DDA with the selected developer that requires the completion of the required backbone infrastructure for the 32.5-acre area south of West Midway, including both the West Midway Project site and RESHAP Project site. 

 

ENVIRONMENTAL REVIEW

 

On February 4, 2014, the City of Alameda certified the Alameda Point FEIR in compliance with CEQA.  The FEIR evaluated the environmental impacts of redevelopment and reuse of the lands at Alameda Point.  Consistent with the February 2014 action, on September 25, 2017, the Planning Board approved a resolution containing conditions of approval that require that the RESHAP development comply with, and implement, all the relevant mitigations measures adopted by the City Council in February 2014.  The DDA also includes the MMRP as an exhibit and requires compliance with all of the relevant mitigation measures.

 

Under Public Resources Code Section 21083.3 and Section 15183 of the CEQA Guidelines, where a project is consistent with the development density established by existing zoning, a community plan, or a general plan for which an EIR was certified, additional environmental review is not required.  The density and land uses of the proposed RESHAP development are consistent with the Main Street Plan and Alameda Point Zoning District.  As documented in the environmental compliance checklist (Exhibit 9), RESHAP would not result in significant impacts that: (1) are peculiar to the project or project site; (2) were not already identified as significant effects, cumulative effects, or off-site effects in the FEIR; or (3) were previously identified as significant effects, but are determined to be substantially more severe than discussed in the EIR.  Thus, the streamlining provision of Public Resources Code Section 21083.3 and Section 15183 of the CEQA Guidelines apply and no further environmental review is necessary.

 

RECOMMENDATION

 

Authorize the Acting City Manager to approve in substantial form and issue a RFQ from developers for a new development site in the Main Street Neighborhood at Alameda Point (West Midway Project) and form of ENA to be entered into with a selected developer.

 

Respectfully submitted,

Jennifer Ott, Base Reuse and Transportation Planning Director

By,

Michelle Giles, Redevelopment Project Manager

Financial Impact section reviewed,

Elena Adair, Finance Director

 

Exhibits:

1.                     Zoning Map

2.                     Draft RFQ