Title
Recommendation to Authorize the Interim City Manager to Execute a Reimbursement Agreement for Estuary Park Access between the Successor Agency to the Community Improvement Commission, City of Alameda and Catellus Alameda Development, LLC. [City Council and SACIC] (Community Development 256)
Body
To: Honorable Chair and Members of the Successor Agency to the Community Improvement Commission of the City of Alameda
Honorable Mayor and Members of the City Council
From: David L. Rudat, Interim City Manager
EXECUTIVE SUMMARY
In July 2017, the City Council approved an amendment to the Bayport/Alameda Landing Master Plan for the final development phase of Alameda Landing north of Mitchell Avenue. That amendment requires the developer, Catellus Alameda Development, LLC (Catellus) to construct an access road to Estuary Park, located to the west of the project.
On March 20, 2018, as part of the Fiscal Year (FY) 2017-18 Mid-Year Budget update, the City Council appropriated $800,000 from the Base Reuse and FISC Lease Revenue budgets to accelerate construction of the access road ahead of the schedule. The attached Reimbursement Agreement (Exhibit 1) spells out the terms and conditions under which the City will provide the funding to Catellus to construct the improvements, and Catellus will then reimburse the City up to $615,258 at the time of future residential parcel sales.
BACKGROUND
In July 2017, the City Council approved an amendment to the Bayport/Alameda Landing Master Plan for the final development phase of Alameda Landing north of Mitchell Avenue. The amendment revised the Master Plan to allow the rehabilitation of 365,000 square feet of warehouse space for maritime uses, construction of up to 400 residential units, and construction of a 4.5-acre public waterfront park. In December 2017, the Successor Agency conveyed approximately 17 acres to Catellus, who then conveyed the property to Bay Ship and Yacht (BSY). Over the last year, BSY has been renovating the warehouses and lease up should begin in 2019.
As part of the amended Master Plan and the rehabilitation of the existing warehouses, Mitchell Avenue was extended to connect with a driveway on the BSY property. The full extension of Mitchell Avenue to the western edge of the project is a requirement of the future redevelopment of the maritime parcel. Given that Mitchell Avenue will not be extended as long as the existing warehouses are in use, the amended Master Plan requires Catellus to build an access road to Estuary Park. This access road will provide secondary access to Estuary Park which is just west of the Alameda Landing project. The requirement to build the access road is triggered when Catellus sells the two residential parcels north of Mitchell Avenue.
Because Catellus is currently constructing the backbone infrastructure along Mitchell Avenue to support the BSY project and Phase 1 of Estuary Park is completed and in use by the public, there was interest in accelerating construction of the access road.
When Catellus took title to the property it sold to BSY in 2017, it reimbursed the City $800,000 for funds that the City expended (from Base Reuse and FISC Lease Revenue Special Revenue Funds) to pay for the cost of demolition of a building located at FISC due to a fire and to construct Stargell Avenue. As part of the FY 2017-18 Mid-Year Budget update, staff recommended that the City Council appropriate those same funds to accelerate construction of the access road. The City Council approved that recommendation on March 20, 2018.
Staff is recommending that the Successor Agency and City Council approve a reimbursement agreement with Catellus for Catellus to construct the access road and reimburse the City (Base Reuse and FISC Lease Revenue Special Revenue Funds) when it sells the residential parcels north of Mitchell Avenue.
DISCUSSION
While the City Council appropriated the funds to accelerate construction of the Estuary Park access road, staff did not seek authorization for the City Manager to negotiate and execute an agreement to carry out that work as part of that action. Therefore, it is necessary for the City Council to authorize the Interim City Manager to execute such an agreement at this time to allow the work to go forward.
Since the funds were appropriated in March 2018, the Recreation and Parks (ARPD) and Public Works Departments have worked with Catellus’ engineer on the design of the access road. The access road plans have been reviewed by City staff. As part of the design work, both departments requested that street lights be installed. Street lights were not required as part of the Master Plan amendment. Those lights have been incorporated into the plans. Catellus’ engineer has prepared an engineer’s estimate for the cost of the access road as it is specified in the amended Master Plan. That estimate is $615,258. The City Engineer has reviewed and concurred with the estimate. The street lights and other additional requested work, including bicycle and pedestrian paths, is estimated to cost an additional $184,742. Council’s previously appropriated funding of $800,000 will cover the entire cost of the improvements.
The reimbursement agreement provides that Catellus will build the access road as part of the backbone infrastructure work it is doing in support of the BSY parcel, rather than waiting to build the road when it sells its residential parcels. This is a more cost-effective approach as Catellus already bid the work in conjunction with the Mitchell Avenue extension and has locked in the unit prices for the access road. The City will pay Catellus to construct the access road in an amount not to exceed the budget provided in the reimbursement agreement. In addition, the agreement provides that Catellus will reimburse the City $615,258 as follows: 50% when the first residential parcel is sold by Catellus to a homebuilder and 50% when the second residential parcel is sold by Catellus to a homebuilder. The agreement anticipates that the City will recoup up to $615,258 in construction costs and have the benefit of the access road 12 to 18 months sooner than it would have otherwise.
Catellus is currently in negotiations with a homebuilder to purchase both residential parcels. It is anticipated that the parcels will be sold in the next 12-18 months. However, in the event Catellus fails to take down one or both of the residential parcels, it will not be obligated to reimburse the City for the cost of the access road. It is assumed that the City would pass this reimbursement obligation on to any subsequent buyer(s).
The Council has previously appropriated the funding for this activity. Authorizing the Interim City Manager to execute the reimbursement agreement will allow the access road to be built more quickly and more cost-effectively and will obligate Catellus to reimburse the City for $615,258 of construction costs when Catellus moves forward with its residential development.
FINANCIAL IMPACT
There is no financial impact to the General Fund from authorizing the Interim City Manager to execute a reimbursement agreement with Catellus. Funds were previously appropriated for this activity from Base Reuse and FISC Lease Revenue Special Revenue Funds Budget. Reimbursement from Catellus will repay up fronted resources to the Base Reuse and FISC Lease Revenue Funds.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This reimbursement agreement is consistent with the Bayport/Alameda Landing Master Plan as amended and the Alameda Landing Commercial Development Agreement (DA) as clarified by the DA Operating Memorandum dated December 1, 2017.
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.
On July 18, 2017, the City Council approved an Environmental Assessment of the Bayport/Alameda Landing Master Plan Amendment. The Environmental Assessment concluded that the Master Plan Amendment (provided that the traffic trip cap established by the Master Plan is maintained) would not generate any new, or substantially more severe, impacts than might be expected as compared to those identified in the 2006 SEIR.
RECOMMENDATION
Authorize the Interim City Manager to Execute a Reimbursement Agreement for Estuary Park Access between the Successor Agency to the Community Improvement Commission, City of Alameda and Catellus Alameda Development, LLC as described above.
Respectfully submitted,
Debbie Potter, Base Reuse and Community Development Director
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibit:
1. Reimbursement Agreement