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Presentations by Four Developer Finalists for Development of the West Midway Project at Alameda Point (22-Acre Mixed Use Project, Construction of Backbone Infrastructure, Up to 291 Residential Units, including Commercial Development) and Provide Direction on Next Steps in the Developer Selection Process. (Base Reuse 819099)
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To: Honorable Mayor and Members of the City Council
From: David L. Rudat, Interim City Manager
EXECUTIVE SUMMARY
On August 6, 2018, a Request for Qualifications (RFQ) was issued to solicit developers for the development of the West Midway Project. The West Midway Project consists of 22.8 acres of new market rate development within the Main Street Neighborhood sub-district of Alameda Point. This site was made available through the approved consolidation of currently leased supportive housing from 34 acres to a 9.7-acre site. A condition of the consolidation is that the City use commercially reasonable efforts to identify a developer for the West Midway Project that will finance and construct the necessary backbone infrastructure of the consolidated supportive housing site.
This report provides an overview of the RFQ selection process, a summary of each of the finalists’ Statement of Qualifications (SOQ) and staff’s analysis of the key factors considered by the RFQ review team. Each finalist team will make a presentation on its qualifications to the City Council and the public, and answer questions. Staff requests Council direction on the next steps in the selection process, including direction to enter into negotiations for an Exclusive Negotiation Agreement (ENA) with a developer.
BACKGROUND
On July 10, 2018, the City Council authorized staff to issue an RFQ for the development of the West Midway Project site at Alameda Point (Exhibit 1), and approved a form of ENA. The RFQ was issued on August 6, 2018, and sent to an extensive list of developers. An advertisement was also placed on the Urban Land Institute website and a prominent article announcing the RFQ was published in the San Francisco Business Times.
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 (Exhibit 2). The site was made available through the consolidation of the existing leased supportive housing occupied by Alameda Point Collaborative, Building Futures with Women and Children, and Operation Dignity (Collectively, the Collaborating Partners), which will consolidate from 34 acres to a 9.7-acre site (Exhibit 3). On May 15, 2018, the City Council approved the Rebuilding the Supportive Housing at Alameda Point (RESHAP) project, which allows the supportive housing providers to own the 9.7-acre site and to construct 200 replacement units and 67 new very low-and low-income units. As a condition precedent to the transfer of land for the RESHAP project, the City is required to use commercially reasonable efforts to identify a developer to finance and construct the necessary backbone infrastructure for the project as a condition of building new market rate development on the West Midway site.
The RFQ focused on attracting developers interested in developing a transit-oriented mixed-use, mixed income neighborhood with diverse housing options and a mix of commercial uses consistent with the City’s existing entitlements, including the General Plan, Zoning Ordinance, Master Infrastructure Plan, Main Street Neighborhood Specific Plan, and Alameda Point Environmental Impact Report.
The RFQ required developers to submit a SOQ that included:
• a project understanding and approach;
• description of project team;
• project description;
• a summary of previous relevant experience;
• financial qualification; and
• acceptance of conditions, including any requested modifications to any aspect of the form of ENA. The SOQs were due to the City by September 24, 2018.
The City received seven (7) responses to the RFQ:
1. Alameda Point Partners
2. Brookfield Residential
3. Catellus
4. City Ventures
5. Fairfield Residential
6. Jamestown & Cypress Equity Investments
7. Lincoln Properties
An inter-department team of City and Housing Authority staff consisted of the following people:
• Base Reuse Manager
• Assistant Community Development Director
• Economic Development Division Manager
• Planning, Building and Transportation, Acting Director
• Director of Housing and Community Development, Housing Authority
The review team evaluated the submittals based on the evaluation criteria in the RFQ:
• responsiveness to the RFQ;
• evidence of relevant experience and proven track record;
• technical capability and relevant experience of the project management team;
• evidence of financial capacity, resource, and relationships; and clear corporate/organizational structure;
• in depth understanding of, and reasonable approach to the project;
• willingness to comply with the terms of the form of ENA.
Based on the evaluation process, staff invited for an interview the four developer teams below:
1. Alameda Point Partners
2. Brookfield Residential
3. Catellus
4. Jamestown & Cypress Equity Investments
All Finalists’ SOQs submitted in response the West Midway RFQ are attached (Exhibit 4). The interviews were held in October 2018, with an interview panel that included the following:
• Base Reuse Manager
• Economic Development Division Manager
• Planning, Building and Transportation, Acting Director
• Base Reuse and Community Development Director
• Renewed Hope representative.
A copy of the evaluation rubric used by the interview panel is attached as Exhibit 5.
In addition to the interview process, City staff invited representatives from the Collaborating Partners and Mid-Pen Housing, the non-profit developer for RESHAP, to meet each of the finalist development teams. The primary purpose was to evaluate how each team would work with the Collaborating Partners on the phasing of the RESHAP project and the required infrastructure, managing their relocation needs and meeting financing milestones.
Each SOQ included financial information which was reviewed by Willdan, the City’s third-party financial consultant. Willdan concluded that overall each of the teams has sufficient assets and financial capacity to fund the development of the project. Once selected, the preferred developer must successfully complete a more detailed financial review.
In addition to the steps described above, staff was guided by the Evaluation Criteria and Questions for Alameda Point Development Proposals adopted by the City Council on November 5, 2013, and attached as Exhibit 6. This criteria may be helpful in guiding the City Council in its evaluation process.
Staff has concluded its review and evaluation of the SOQs received and recommends that the City Council receive presentations from the four finalist teams and provide direction on the next steps in the selection process including direction to enter into negotiations for an ENA with a developer.
DISCUSSION
The selection process for a preferred developer for the West Midway Project was designed to be similar to that for Site A and included a rigorous staff and stakeholder review process. Because the primary community impacted/benefited by this project is the Collaborating Partners, each stakeholder and their respective developer partner also participated in the process.
The following is an overview of each of the four development teams’ qualifications, team members and project description. Staff has also included some of the key distinctions of each team that were discussed by the interview panel.
Alameda Point Partners (APP) is a highly qualified and experienced partnership of commercial developer Joe Ernst of srmErnst (SRM) and residential developers Bruce Dorfman and Will Thompson of Trammel Crow Residential (TCR). APP is the master developer for Site A and has recently commenced construction on that project. TCR specializes in urban, mixed-use development in the Bay Area and has extensive experience developing mixed-use projects and workforce housing, including the City of Oakland’s newest inclusionary housing development. SRM has a notable track record developing over three million square feet of office, maker space, research and development buildings and corporate campuses in Alameda and across the East Bay. SRM recently acquired Buildings 9 and 91 at Alameda Point, and performed major upgrades to the buildings and infrastructure.
Other team members include:
• ROMA Design Group- Planning and landscape design
• SB Architects -Architect
• BKF -Civil Engineer
• Langan - Geotechnical and environmental
APP’s project description for West Midway includes:
• 291 housing units with a limited number of single-family homes, townhomes and higher density product, for both rental and for-sale
• 16% workforce housing units; 9% (31) deed-restricted moderate income units
• Preservation of Building 35, a contributing structure in the Historic District
• A large portion of the project will be a “mission-driven district dedicated to innovative businesses and job creation” with approximately 300,000 - 500,000 square feet of new commercial space and reused buildings in a campus environment focused on accelerator-phase businesses
Interview Panel Comments/Considerations on APP SOQ:
• Strong focus on job-generating commercial activity
• Recent, first-hand experience with permitting, entitlement, and infrastructure challenges with Site A
• Significant workforce housing experience
• How would delivery of Site A’s remaining phases (2 & 3) fit in with development of West Midway?
• Potential Impact of any Site A challenges/delays on West Midway
Brookfield Residential is a leading real estate development, construction, and asset management organization with a portfolio spanning master-planned communities, multi-family, office, retail, hospitality and more. Brookfield is a leader in land development and homebuilding and its team has military base redevelopment experience in Dublin with its Boulevard project with 20 distinct neighborhoods, a 31-acre community park and 15- themed neighborhood parks. Another signature project by Brookfield is the mixed-use Playa Vista project on 65 acres of land in West Los Angeles, which consist of 5,846 residential units, 3.3 million square feet of office space, 230,000 square feet of retail uses, 200 assisted living units, and 47 acres of parks. Other team members include:
• UrbanMix Development LLC - Development Partner
• Urban Design Associates Ltd. (UDA) - Urban Planning
• Gates +Associates - Landscape Architect
• Woodley Architectural Group, Inc. - Architect
• BKF - Civil Engineer
• ENGEO - Geotechnical
Brookfield’s project description for West Midway includes:
• 291 housing units including stacked flats, multiplex, single-family detached, courtyard housing and possibly tiny houses
• At least 10% workforce housing units
• 9% (31) deed-restricted moderate income units
• Approximately 170,000 square feet of commercial uses, including office/research and development, assisted living, work/live units, personal services and other permitted uses
• Preservation of Building 35
• Possibly saving the south courtyard of Building 78, the Women Accepted for Volunteer Emergency Service (WAVES) building
• Mix of secondary open spaces including informal paseo connections and pocket parks
Interview Panel Comments/Considerations on Brookfield SOQ:
• Strong multi-year phasing experience with previous mixed-use projects
• Significant military base reuse experience
• Close ties with Collaborating Partners
• Commercial focus is on community serving retail, assisted living versus manufacturing/industrial job-generating uses
• Experience is primarily in large, master-planned communities
Catellus is a national leader in transformational land development with a long track record of solving complex redevelopment challenges. Catellus’ proven ability to execute master-planned, residential and mixed-use developments is demonstrated in Alameda with the Bayport and Alameda Landing projects, including the recently entitled final phase of the Alameda Landing project. Catellus is also the master developer of the former Mueller airport, a notable mixed-use, new urbanist community located in the heart of Austin, Texas. The 700-acre former airport is being transformed into a master-planned community with 6,200 homes, 4.5 million square feet of commercial space, including 750,000 square feet of retail space, and 140 acres of parks and open space.
Other team members include:
• Ken Kay Associates - Urban Planning and Landscape Architecture
• Woodley Architecture Group - Architect
• BKF - Civil Engineer
• Langan - Geotechnical and environmental
• Vox Populi - Community Relations
Catellus’ project description for West Midway includes:
• Catellus will act as master developer and require its homebuilder to include:
o A minimum of 9% (31) deed-restricted moderate rate affordable housing units
o A minimum of 10% of workforce housing units
o A minimum of 15% of market rate universal design units, “visitable” by a person with mobility issues
o A maximum of 20% of market rate single family detached units
• Opportunities for high bay (20’ floor to floor) flexible commercial space incorporated into stand-alone structures or ground floor of multi-family buildings; and restaurants, coffee and specialty food shops, creative office and beverage production and tasting rooms
Interview Panel Comments/Considerations on Catellus SOQ:
• Successful delivery of infrastructure and development on Alameda projects
• Proven experience managing complex master-planned developments
• Stated completion of project regardless of economic conditions
• Use of internal equity to finance the land development
• Master Developer approach; homebuilder identified through Request for Proposals after entitlements are approved
Jamestown/Cypress Equity Investments (CEI) is a partnership created for the West Midway project comprised of two high quality regional and national developers. Jamestown is a vertically integrated real estate investment and development company with a breadth of experience owning, enhancing and managing Class A mixed-use and commercial properties across the country, including the 47-acre Alameda South Shore Center and Fourth Street Berkeley. Jamestown also specializes in adaptive reuse of historic properties, such as Ponce City Market in Atlanta and Chelsea Market in New York. CEI is a real estate investment and development company that has purchased, developed, and invested in over 120 projects in the last 18 years with a total of over 11,900 multifamily units, office, and retail projects, including a seven-story mixed use multifamily development in Los Angeles and a six-story mixed-use amenity-rich campus in Glendale. In 2017, CEI joined the Site A partnership and was instrumental in completing the land closing in 2018. CEI also is the lead developer for Block 9 and a 50% partner for Block 11.
Other team members include:
• BAR Architects - Architect
• Pyatok - Urban Design and Planning
• Groundworks Office - Landscape Architect
• BKF - Civil Engineer
Jamestown/CEI’s project description for West Midway includes:
• Up to 291 residential units, including 9% (31) deed-restricted moderate-income units
• Approximately 100 live-work units integrated into commercial and residential neighborhoods to support the creative workforce while reducing traffic
• 10% workforce units distributed among multiple buildings
• 150-unit assisted living and memory care facility
• Strong commercial vision including creative office space, maker space, and incubators totaling 150,000-500,000 GSF
• Community serving retail space, including restaurants with outdoor dining
• Pocket parks, plazas, and community gardens
Interview Panel Comments/Considerations on Jamestown/CEI SOQ:
• Robust and unique commercial vision with extensive success in other areas of the country incorporating job development and training programs for the community by collaborating with local businesses
• Strong local commercial experience
• Alameda residential experience at Site A
• Internally manages and actively oversees programming after completion of development leading to project success
• New partnership working together for first time
CONCLUSION
In evaluating the proposals, the interview panel found that each of the developer teams was highly qualified, having successfully financed and developed a variety of relevant projects locally and nationally. Each team has assembled experienced urban design, planning and architectural partners, who have all worked on award-winning projects nationally and regionally. Each team also selected BKF, an experienced civil engineering firm that has worked on infrastructure design projects throughout the Bay Area and most recently helped with Site A’s tentative map and final map approval process. In addition, the developer teams selected geotechnical firms ENGEO and Langan, who have been involved with soil stabilization and earthquake analysis at Alameda Point for many years.
As stated above, all of the development teams are highly qualified and capable of developing the West Midway Project. During the interview panel discussions, the following issues were also thought to be important considerations in the selection of a preferred developer for West Midway:
1. Diversity of Developer Base - Introducing new developers with unique and different visions, ideas, and approaches to development at Alameda Point.
2. Commercial Vision - In keeping with its location at the intersection of the Adaptive Reuse Area and Site A, a strong commercial element may create a work-live-play community that benefits both residents and businesses.
3. Job Creation/Training - In concert with the commercial vision, bringing much needed jobs and potential job training opportunities to the Collaborating Partner residents would be a win-win for the community and the City.
Staff has concluded its review and evaluation of the SOQs and recommends that the City Council receive presentations from the four finalist teams and provide direction on next steps in the selection process, including direction to enter into negotiations for an ENA with a developer.
FINANCIAL IMPACT
There is no financial impact to the City’s General Fund from providing direction on developer selection for the West Midway project.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The developer selection process for the West Midway project is consistent with the RESHAP DDA with the Collaborating Partners and Milestone Schedule approved by the City Council on May 15, 2018, and the RFQ approved by the City Council on July 10, 2018.
ENVIRONMENTAL REVIEW
No environmental review is required as presentations by developer finalists is not a project as defined under CEQA. CEQA Guidelines, section 15378(a)
RECOMMENDATION
Receive presentations by four developer finalists for development of the West Midway project at Alameda Point (22-acre mixed use project, construction of backbone infrastructure, up to 291 residential units, including commercial development) and Council direction on next steps in the selection process.
Respectfully submitted,
Debbie Potter, Base Reuse and Community Development Director
By: Michelle Giles, Base Reuse Manager
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Request for Qualifications
2. Neighborhood Map
3. Collaborating Partners Site Map
4. Statement of Qualifications
5. Evaluation Rubric
6. Evaluation Criteria and Questions- November 5, 2013