Title
Del Monte Development Agreement Annual Review and Proposed Amendment- Applicants: TL Partners I, LP and Alta Buena Vista Owner, LLC. The applicants are requesting: 1) a periodic review of the Del Monte Warehouse Project Development Agreement, and 2) a Planning Board recommendation that the City Council approve a Third Amendment to the Development Agreement to address delays in construction schedules for the Clement Extension Improvements. The consideration of an Annual Report is not a project under the California Environmental Quality Act (CEQA), and the proposed time extension would have no impact on the environment that was not already considered under the original project environmental documents. No further environmental review is required.
Body
To: Honorable President and
Members of the Planning Board
From: Andrew Thomas, Planning, Building and Transportation Director
Date: October 26, 2020
EXECUTIVE SUMMARY
On January 15, 2015, the City of Alameda and TL Partners I, LP (TLP) entered into a Development Agreement (DA) for the Del Monte Warehouse Project. The DA has been amended by a First Amendment to Development Agreement dated June 8, 2017, a Second Amendment to Development Agreement dated July 18, 2018, and two ministerial amendments dated October 25, 2018 and September 25, 2019.
On October 9, 2019, the City granted its written consent to a Partial Assignment of certain rights and obligations under the Development Agreement from TLP to Alta Buena Vista Owner, LLC, a Delaware limited liability company (“ABV”). ABV is currently under construction on the Del Monte Building and Clement Avenue extension. TLP still owns rights to the small pad at the northern end of the site.
Alameda Municipal Code (“AMC”) Section 30-95.1 requires the Planning Board to conduct a public hearing at which the applicant must demonstrate good faith compliance with the terms and conditions of the DA. TLP and ABV (the “Developers”) have submitted a letter demonstrating their good faith compliance with the terms and conditions of the DA. (Exhibit 2). The Developers have also notified the City that due to construction delays, the Clement Avenue extension will not be completed until August 2021. Under the DA, the Clement Avenue extension must be completed by January 15, 2021. Therefore, the Developers are requesting an amendment to the Development Agreement to ensure that the anticipated construction schedule does not result a default under the agreement.
Staff is recommending that the Planning Board approve the annual report and recommend that the City Council approve an amendment to the DA to allow extra time for the Developers to complete the Clement Avenue extension currently under construction.
BACKGROUND
Since executing the DA in 2015, the Developers and the City have accomplished a number of public benefits required by the Development Agreement. Those include:
Restoration and Adaptive Reuse of the Del Monte Warehouse Building. The DA established the obligation of the Developer to restore and adaptively reuse the Del Monte Building, a designated City Monument, for residential and commercial use. After much delay, TLP sold the rights to ABV in 2019, and in 2020, ABV acquired the necessary building permits and began restoration and rehabilitation of the building. The work is currently under way and the Developer hopes to have the first tenants moving into the building in the spring of 2022.
Jean Sweeney Open Space Park: The Developer is obligated by the DA to make a payment of $2,000,000 in order to fund portions of the Jean Sweeney Open Space Park (“JSOSP”), a 22-acre park. TLP made an initial payment of $300,000 in February 2015 and paid $1 million to the Recreation and Parks Department in 2017. In 2018, TLP paid the remaining $700,000 of the $2 million obligation. Using TLP’s $2 million contribution as matching funds, the City secured a $2 million grant from the California Department of Parks and Recreation. The City has also received a $2.3 million grant from the Regional Active Transportation Program, specifically for completion of the Cross-Alameda Trail, which runs the length of the park.
Affordable Housing: In compliance with the DA, the Developer submitted for review and approval by the City Council an Affordable Housing Agreement for the provision of fifty-five (55) affordable housing units. In 2015, the City Council approved the Affordable Housing Agreement and the agreement to convey the City-owned portion of the property (which will contain the 31-unit senior affordable housing building), to the Housing Authority of the City of Alameda. In 2018, the Housing Authority in collaboration with TLP completed construction of 31 units for very low- and low-income senior households at “Littlejohn Commons”. The 24 remaining affordable housing units will be provided within the adjacent Del Monte Building, which is currently under construction.
Beneficial Transfer Fee Agreement: The Beneficial Transfer Fee Agreement was executed concurrently with the Development Agreement in 2015.
Transportation Demand Management Program: The DA and Del Monte Master Plan require that the Developer establish and operate a Transportation Demand Management (TDM) Program to reduce peak hour vehicle trips generated by the Del Monte development. Pursuant to those agreements, the Developer is required to initiate TDM services upon occupancy of the building, and the Developer is required to submit an annual report documenting compliance with the Planning Board-approved TDM program for the project. The first TDM annual report will be provided by the Developer upon building occupancy.
In 2017, TLP played an important role in assisting the City of Alameda to establish the Alameda Transportation Management Association (ATMA) to coordinate supplemental transit services, leverage transportation resources to improve services for Alameda residents, and expand transit services citywide. The Del Monte project is an active member in the ATMA, which includes all of the projects in the Northern Waterfront and all of Alameda Point. During the review period, Easy Passes were provided for all 31 units within Little John Commons.
Working with the ATMA, the TLP was instrumental in working with AC Transit to reinstate service on Line 19 along Buena Vista Avenue. Working with other developments in the Northern Waterfront and the City, TLP and others provided financial subsidies for the Line 19 implementation, allowing the Line to offer 20-minute service during commute hours. Line 19 began operation in December 2016. Due to COVID-19, AC Transit has temporarily suspended the 20-minute service. The ATMA is currently working with the membership to determine how best to adjust transportation services during the unusual times.
ANALYSIS
Clement Extension and Construction Delays: The DA requires the developer to construct the Clement Avenue extension from Atlantic Avenue to Entrance Road and to have those improvements completed by January 15, 2019. To that end, TLP needed to acquire property from Wind River Systems. In July 2017, after four years of negotiations, TLP acquired the property from Wind River needed to complete these improvements. In 2017, TL Partners completed its construction drawings and improvement plans for the project, and the City completed the plan check in 2017. Unfortunately, TLP was unable to secure construction financing in 2017, and construction of the Del Monte building, and the Clement extension was delayed.
On October 25, 2018, the City Manager approved TLP’s request for an extension to the deadline for the completion of the Clement Avenue Extension required by Section 6.b. of the Development Agreement. Pursuant to that extension, the Clement extension must be completed by September 30, 2020. TLP subsequently requested, and the City granted, an additional extension to complete the Clement Extension improvements by January 15, 2021.
In January 2020, ABV pulled building permits for the Del Monte Building and Clement Avenue extension and began construction. Since pulling building permits, work has moved as expeditiously as possible given constraints brought upon by COVID 19 and a delayed approval of the Water Main Line by EBMUD. The COVID 19 crisis resulted in a delay of approximately 2 weeks and caused a reduction in labor for an extended period of construction. COVID 19 also delayed EBMUD’s approval for the Main Line Application, which plays a critical role in the completion of Clement Avenue. Without permits from EBMUD, the Developers are able to complete rough grading, but can only install approximately 35% of required underground utilities.
As a result of these delays, the Developers are anticipating completing Clement Avenue in August 2021, with the completion of Sanitary Sewer by November 2020, Storm Drain by March 2021, Domestic Water by June 2021 and finally Hardscape/Landscape by August 2021. Unfortunately, these delays result in a conflict with the Development Agreement (as amended) which establishes a completion deadline of January 15, 2021.
Development Agreement Amendment: Staff is recommending that the Planning Board recommend and that the City Council approve a Third Amendment to the Development Agreement to extend the deadline for completion of the Clement Avenue extension improvements for one year or until January 15, 2022.
Work is currently underway on the Clement Extension improvements, and staff and the Developers are hopeful that the work will be completed by August 2021, but in the event of other unanticipated delays, staff is recommending that the deadline be extended until January 15, 2022, to avoid the need for an additional Development Agreement amendment if additional delays are encountered.
The recommended draft amendment also requires submittal of a monthly report to the City on construction progress and any future anticipated delays that may warrant the need for additional extensions. The amendment also acknowledges and clarifies that the work on Clement includes additional work on the Jean Sweeney Park side of the new intersection that could not be completed by the City when the Park was constructed as the result of the delays in the construction of Clement Avenue. The exact language of the proposed Development Agreement amendment is included in the attached resolution. (See Exhibit 3.)
ENVIRONMENTAL REVIEW
Periodic reviews of a Development Agreement are exempt from the California Environmental Quality Act. The proposed amendment to the Development Agreement would not result in any changes to the physical environment that were not already anticipated in the environmental review documents for the project. No additional environmental review is required for the amendment that extends the existing deadline for the completion of contemplated improvements.
RECOMMENDATION
Approve the draft resolution (Exhibit 3) declaring that the Developers have demonstrated good faith compliance with the terms and conditions of the Development Agreement and recommending the City Council approve a Third Amendment to the Development Agreement to provide the Developers with one additional year to complete the Clement Extension improvements.
Respectfully submitted,
Andrew Thomas
Planning, Building and Transportation Director
Exhibits:
1. Annual Report Letter from Developers
2. Draft Resolution Approving Annual Report and Recommending Third Amendment to Development Agreement