Title
Recommendation to Authorize the City Manager, or Designee, to Negotiate and Execute an Agreement in the Amount of $350,000 with Brookfield Bay Area Holdings LLC and/or Catellus Development Corporation to Advance Design and Development of Backbone Infrastructure for RESHAP (Rebuilding Supportive Housing at Alameda Point). (Community Development 819099)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
On March 9, 2020, the City Council approved a $350,000 appropriation for the RESHAP Project Backbone Infrastructure Design as part of the mid-year budget update to advance infrastructure design and construction documents for the backbone infrastructure necessary to support the RESHAP Phase 1 area. This report recommends authorizing the City Manager to negotiate and execute a $350,000 contract with Brookfield Bay Area Holdings, LLC (Brookfield) and/or Catellus Development Corporation (Catellus), who are jointly developers of the West Midway project, to perform the work consistent with the scope of work discussed below and attached as Exhibit 1. Part of the determination in moving forward with the $350,000 appropriation was to use this as an advance of the funding with the potential to have it reimbursed as a component of the West Midway development.
BACKGROUND
On March 9, 2020, the City Council authorized staff to issue a Request for Qualifications (RFQ) for the development of the West Midway Project. At the same meeting, the City Council considered three alternatives to support and facilitate the advancement of the RESHAP project, a 267-unit, 100% affordable housing development being built by Alameda Point Collaborative, Operation Dignity, and Building Futures with Women and Children (collectively, the Collaborating Partners) and Mid-Penn, a non-profit affordable housing developer. The City Council appropriated $350,000 as part of the mid-year budget to advance the design and preparation of construction documents for the backbone infrastructure necessary to support the RESHAP Phase 1 area.
On May 19, 2020, the City Council selected the Brookfield /Catellus team (Developer) to develop the West Midway Project at Alameda Point and authorized the City Manager to negotiate an Exclusive Negotiation Agreement (ENA) with the Developer. In a separate action before the City Council, staff is recommending authorization to execute the ENA for West Midway with the Developer. The ENA requires the Developer to invest $25,000 a month as a “Minimum Due Diligence Expenditure” to conduct due diligence investigations of the project and the property. The due diligence may include physical, financial, and /or entitlement due diligence. Staff is recommending that the City of Alameda (City) contract with the Developer to perform the advance infrastructure work on behalf of the RESHAP project, as that work will be inform the due diligence efforts applicable to the balance of the West Midway project.
Staff, the Developer and the Collaborating Partners have met on two occasions over the last two months to discuss the use of the $350,000. Staff and the Developer met with the Collaborating Partners and Mid-Pen for initial discussions of financing, phasing, readiness for grant opportunities and potential uses of the $350,000 to advance the RESHAP project; Staff, the Developer and the Collaborating Partners met a second time to refine a proposal to further the knowledge of the site with respect to the geotechnical, environmental, site planning and project layout. The recommended use of the funds outlined in Exhibit 1 is the result of these meetings.
DISCUSSION
The scope of work proposed by the Developer to advance the infrastructure of the RESHAP project (Exhibit 1) includes investigating site conditions, constraints and opportunities to optimize delivery of the RESHAP project in the most efficient and cost effective manner. Areas of work will include:
• Geotechnical investigation to determine limits of the existing foundation piles in the development area;
• Identify constraints for placement of buildings and identify necessary ground improvements;
• Environmental study and investigation to determine what, if any, environmental work need updating;
• Conduct an abatement survey of existing building foundations;
• Review and pothole existing utilities to aid in backbone infrastructure drawings to ensure existing tenants remain online;
• Revise land planning studies by RESHAP consultants based on findings above; and
• Develop an overall development schedule for RESHAP.
ALTERNATIVES
• Authorize the City Manager to negotiate and execute a $350,000 agreement with Brookfield and/or Catellus to advance infrastructure design and development of backbone infrastructure for RESHAP as described in Exhibit 1.
• Modify the proposed work scope.
• Issue a Request for Proposals (RFP) for the proposed scope of work and award a third-party contractor through a selection process. This alternative would segment the work from the due diligence work performed by the Developer under the ENA and make it less cost-effective and take more time to integrate the findings from both efforts. In addition, the RFP process would add two to three months to the process of implementing the proposed scope of work.
• Decline to move forward with the project at this time.
FINANCIAL IMPACT
The $350,000 budget for the RESHAP project’s advance infrastructure work was appropriated from the General Fund as a capital project in the FY 2019-20 mid-year budget update. Since capital project budgets carry forward over the life of a project, there is no need for re-appropriation of funding.
When City Council approved the appropriation, it noted that the funds could be repaid to the City as part of the Disposition and Development Agreement (DDA) negotiated between the Developer and the City. It is staff’s intention to negotiate a DDA term sheet that will address how these funds should be treated relative to the overall project transaction for City Council’s consideration. It should be noted that if a DDA term sheet is not successfully negotiated, these funds will most likely become a grant to the RESHAP project, as they may be more difficult to recoup later.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The recommended actions are consistent with the General Plan, Zoning Ordinance, Master Infrastructure Plan, Main Street Specific Plan and RESHAP DDA.
ENVIRONMENTAL REVIEW
On February 4, 2014, the City Council adopted the Alameda Point EIR, which evaluated the potential environmental impacts of the Alameda Point Zoning Ordinance and development in the MSN Plan area. The EIR analysis helped shape the MSN Plan to minimize potential environmental impacts and support a sustainable development. All development within the MSN Plan area is required to comply with the mitigation measures adopted by the City Council for Alameda Point.
CLIMATE IMPACTS
There are no climate impacts associated with authorizing the City Manager to negotiate and execute a $350,000 agreement for advancing infrastructure for the RESHAP project.
RECOMMENDATION
Authorize the City Manager to negotiate and execute an Agreement in the amount of $350,000 to Brookfield and/or Catellus to advance design and development of backbone infrastructure for RESHAP (Rebuilding Supportive Housing at Alameda Point).
CITY MANAGER RECOMMENDATION
The City Manager recommends the authorization to execute an agreement in an amount of $350,000 to advance design and development of backbone infrastructure for RESHAP.
I recommend approval due to the criticalness of the RESHAP project and this is a way to keep that project moving forward. I anticipate reviewing the West Midway Project as it moves forward to determine if this advance can be reimbursed to the City as a component of that development.
Respectfully submitted,
Debbie Potter, Community Development Director
By:
Michelle Giles, Base Reuse Manager
Financial impact section reviewed,
Nancy Bronstein, Acting Finance Director
Exhibit
1. Scope of Work