Title
Recommendation to Authorize the City Manager to Negotiate and Execute the Seaplane Lagoon Ferry Terminal Operating Agreement between the City of Alameda and the Water Emergency Transportation Authority; and
Introduction of Ordinance Approving a License and Authorizing the City Manager to Negotiate and Execute Documents Necessary to Implement the Terms of a 66-Year License with the San Francisco Bay Area Water Emergency Transportation Authority for Use of Real Property and Submerged Land at Alameda Point. [Requires Four Affirmative Votes] (Community Development 858)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
Staff recommends that the City Council authorize the City Manager to negotiate and execute an Operating Agreement (Agreement) (substantially in the form of Exhibit 1) with the Water Emergency Transportation Authority (WETA) related to operating, funding, and ownership of the Seaplane Lagoon Ferry Terminal (Seaplane Terminal). In addition, staff recommends that the City Council introduce an ordinance approving a 66-year license (License) with WETA, (substantially in the form of Exhibit 2) which reflects a $1 per year license fee, to allow use of the submerged lands and navigable channel in Seaplane Lagoon. The Agreement and License provide for the responsibilities and obligations of each party and replace the Memorandum of Understanding (MOU) between the City of Alameda (City) and WETA, which was approved by the City Council in April 2016. It is anticipated that the WETA Board will approve the Agreement and License at its December 12, 2019 meeting.
BACKGROUND
On July 15, 2015, the City Council approved a Disposition and Development Agreement (DDA) with Alameda Point Partners (APP) for the development of Site A, a 68-acre mixed use project at Alameda Point. The DDA requires APP to construct the Seaplane Terminal and contribute $10 million towards the project as part of the Site A Phase 1 infrastructure.
On April 5, 2016, the City Council approved a Ferry Terminal Plan and a MOU with WETA to provide a framework for collaboration on funding and operations of the Seaplane Terminal. WETA’s Board approved the MOU on April 7, 2016. The MOU states that the City and WETA would work in partnership and coordinate closely to actively pursue capital and operating revenue sources for the Seaplane Terminal’s construction and on-going operations, including service and maintenance of vessels. At the time of the MOU’s execution, there were not sufficient operating funds to launch the new ferry service. The parties agreed to collaborate in seeking regional and other funding sources, including grants and a regional transportation measure, for an operating subsidy for WETA.
In April 2017, Alameda County Transportation Commission awarded the Seaplane Terminal project $8.2 million in County Measure BB funds, bringing total funds available to construct the terminal to $18.2 million.
On June 5, 2018, Bay Area voters approved Regional Measure 3 (RM3), a bridge toll increase that, once implemented, will provide significant funding for capital and operational funds for WETA to implement its Strategic Plan, including expansion service to San Francisco from the Seaplane Terminal. However, RM3 funds are currently unavailable due to ongoing legal challenges to the measure.
On September 4, 2018, the City approved an updated Seaplane Terminal Plan with an updated project cost of $22.2 million, a $4 million increase to the previous budget of $18.2 million. The City Council appropriated $2 million for the project in the Fiscal Year (FY) 2018-19 budget. On September 6, 2018, WETA’s Board approved a $2 million contribution from WETA toward construction of the Seaplane Terminal, resulting in full funding for the project.
On July 25, 2019, the City entered into a Funding, Construction and Dedication Agreement with APP to address: 1) the expenditure of funds necessary to pay all ferry terminal costs; 2) completion of the design, permitting and construction of Seaplane Terminal consistent with the preliminary plans and the available funds, and 3) dedication of Seaplane Terminal landside improvements to the City and waterside improvements to WETA following completion of construction. Construction commenced on Seaplane Terminal in July 2019, and will be completed in spring 2020.
On November 7, 2019, the WETA Board gave direction to its staff to prioritize initial service at Seaplane Terminal starting in August 2020, with six-trip service created by restructuring the Alameda/Oakland service to shift the peak period Alameda trips to Seaplane Terminal. Midday and evening service will continue from the Main Street Terminal. This service was initially developed for implementation with new RM3 funds. However, in the interim, WETA will use other funds to provide an estimated $7.25 million over a three-year planning period.
The WETA Board is scheduled to consider the Agreement and License at its December 12, 2019 meeting.
DISCUSSION
Operating Agreement
The purpose of the Agreement is to define the rights and responsibilities of WETA and the City in connection with the operation of ferry service at Seaplane Terminal. The Agreement also acknowledges the parties’ commitment to working cooperatively to amend the prior Transfer Agreement, approved in 2011 between the City and WETA.
The following is a summary of the major terms of the Agreement negotiated by City and WETA staff:
City’s Rights and Responsibilities
• Contract for and manage the design and construction of the Seaplane Terminal;
• Continue to own the Landside Area and Waterside Area and maintain the Landside Area;
• Execute a 66-year license to enter on/access City’s submerged real property for a license fee of $1.00 per year;
• Cause APP to execute a Bill of Sale to transfer ownership of the Waterside Assets from APP to WETA following completion of construction and prior to the commencement of Seaplane Terminal Ferry Service;
• Pay all utility charges associated with the Landside Assets and Landside Area; and
• In the event that WETA discontinues ferry service for a specified period of time, the City will have the right, but not the obligation, to step in and operate or engage a third party to operate a ferry service.
WETA’s Rights and Responsibilities
• Own, maintain, repair and replace, at its sole cost, all waterside improvements, including the fixed piles, float, gangway and access control gate and any other service equipment for ferry operation;
• Pay for all utility charges associated with the Waterside Assets;
• Pay for any additional waterside equipment, including any dredging, if necessary;
• Maintain and repair any submerged real property, if damaged or contaminated by WETA’s operation of the ferry service;
• Provide and operate the Seaplane Terminal ferry service, including providing all required vessels;
• Pay all long-term capital costs associated with ferry operations and travel over the submerged lands; and
• Comply with all environmental restrictions and obligations outlined in the Seaplane Lagoon Ferry Terminal Addendum Mitigation Monitoring and Reporting Program.
Service Commitment
• Estimated service start date is August 2020;
• WETA has sole and exclusive authority to set and change service levels in accordance with its Board-adopted service policies and strategic plans; and
• In the event of an emergency, a natural disaster, or a regionally disruptive event, WETA may temporarily suspend or modify services, as necessary to fulfill its emergency response mandate.
Third-Party Operator Use
• WETA has the exclusive right to permit third-party ferry/boat operators to use the Seaplane Terminal to land boats as long as any third-party ferry/boat operators assume all liability and risk arising from their use of the Seaplane Terminal.
Transfer Agreement Renegotiations
• The City and WETA agree to work cooperatively to re-negotiate the Transfer Agreement regarding responsibility for maintenance of the landside improvements located at Harbor Bay Ferry Terminal and Main Street Ferry Terminal. Exhibit A of the Agreement describes milestones, which each party will make good faith efforts to achieve in a 12-month period. The goal of the renegotiations is to provide a unified parking and access management approach at all three ferry terminals in the City.
License Agreement
Seaplane Terminal is located at Seaplane Lagoon. Seaplane Lagoon is Tidelands property and is owned by the City as trustee for the State of California. Pursuant to the Operating Agreement, WETA will own the waterside assets, which are located in Seaplane Lagoon. In addition, operation of the ferry service requires WETA’s vessels to traverse Seaplane Lagoon to access the terminal. Because the float, gangway and other waterside improvements are located in Seaplane Lagoon and vessels must traverse City-owned submerged lands, it is necessary to grant WETA a license for such access. The License, which includes rights and obligations for both WETA and the City, mirrors the requirements of the Operating Agreement described above.
WETA has made a substantial investment in the Seaplane Terminal - $2 million for construction and an estimated three-year operating subsidy of $7.25 million (without the certainty of RM3 monies during that time). Therefore, a long-term license is warranted. The maximum term for a Tidelands license (or lease) is 66 years. Staff is proposing a 66-year license, with an annual license fee of $1. The License would be effective when ferry operations commence.
City Charter Section 3-10 provides that “All acts of the Council imposing penalties, prescribing public regulations, granting franchises, or providing for the acquisition, transfer or lease for a period longer than one year, of real property, shall be by ordinance….” While the City’s typical practice does not require licenses to be approved in compliance with Section 3-10; given the nature and length of this License, staff recommends that the City follow Section 3-10’s requirements.
ALTERNATIVES
• Authorize the City Manager to execute the Seaplane Terminal Operating Agreement between the City and WETA and introduce an ordinance approving a 66-year license agreement with WETA to use the submerged lands and the navigable channel in Seaplane Lagoon to operate the ferry service.
Request staff go back to negotiate Modifying the Operating Agreement and/or License by requesting revisions to the terms and conditions. Any revisions to the documents would have to be reviewed and approved by the WETA Board.
FINANCIAL IMPACT
There are no impacts to the General Fund associated with approving the Operating Agreement and License. The City is responsible for maintaining the landside assets including the 400-car parking lot, bathroom facilities and other improvements. These maintenance costs will be budgeted as part of the mid-cycle budget update as ferry service is anticipated to commence in August 2020. Staff anticipates covering these annual costs with non-General Fund resources such as Base Reuse, Community Facilities District 17-1 or other Public Works Department funding.
POLICY DOCUMENT CROSS REFERENCE
Ferry service at Seaplane Terminal is consistent with the Alameda Point Waterfront and Town Center Plan, which included a ferry terminal at Seaplane Lagoon as part of the Site A Development. City Council approved an updated Seaplane Terminal Plan on September 4, 2018.
ENVIRONMENTAL REVIEW
On April 5, 2016, the City Council certified the Seaplane Lagoon California Environmental Quality Act (CEQA) Addendum to the Alameda Point Final EIR in compliance with CEQA. The Addendum evaluated the environmental impacts of constructing and operating a ferry terminal at Seaplane Lagoon. No further review is required.
CLIMATE CHANGE IMPACTS
The Operating Agreement and License regulate Seaplane Terminal ferry service operations. The addition of a third ferry service in Alameda will have a positive impact on climate change as it will expand opportunities for commuters, and others, to travel to San Francisco via public transit and reduce single-occupancy vehicle trips, thus reducing green-house gas emissions.
RECOMMENDATION
It is recommended that the City Council:
1) Authorize the City Manager to negotiate and execute the Seaplane Lagoon Ferry Terminal Operating Agreement between the City of Alameda and WETA; and
2) Introduce an Ordinance approving a license and authorizing the City Manager to negotiate and execute documents necessary to implement the terms of a 66-year license with the San Francisco Bay Area Water Emergency Transportation Authority for use of real property and submerged land at Alameda Point.
CITY MANAGER RECOMMENDATION
The City Manager recommends authorization to negotiate and execute the Seaplane Lagoon Ferry Terminal Operating Agreement between the City of Alameda and WETA.
Respectfully submitted,
Debbie Potter, Community Development Director
By:
Michelle Giles, Base Reuse Manager
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Operating Agreement
2. Licensing Agreement