Title
Adoption of Resolution of Consideration to Alter the Rate and Method of Apportionment of Special Taxes for Community Facilities District (CFD) No. 17-1 (Alameda Point Public Services District) and Set a Public Hearing for February 16, 2021. (Community Development 271)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The recommended action will alter the Rate and Method of Apportionment of Special Taxes (RMA) for Community Facilities District (CFD) No. 17-1, so that it better aligns with the property in the CFD that has been developed, is being developed, and is expected to be developed in the future.
BACKGROUND
On March 21, 2017, the City Council adopted Resolution No. 15249 pursuant to which it formed the City of Alameda (City) CFD No. 17-1, in connection with the development of Alameda Point. The CFD was established in order to finance annual public services and transportation demand services and programs associated with the development of the 68-acre Site A development. Other areas of Alameda Point are included in a “Future Annexation Area” for the CFD and are to be annexed into the CFD prior to their transfer to private property owners. The first such annexation occurred on March 15, 2018, in connection with a transfer of a portion of the Site A land.
The CFD and Future Annexation Area boundary is generally bounded by Main Street and West Red Line Avenue to the north, Main Street to the east, the parcels directly west of Monarch Street to the west and West Hornet Avenue and the Bay to the south. The CFD includes two Tax Zones. Tax Zone 1 of the CFD is that area generally bounded by Main Street to the east, Ralph Appezzato Memorial Parkway to the south, West Trident Avenue to the north and Ferry Point to the west. Tax Zone 2 includes certain parcels that are generally to the west of Ferry Point and Pan Am Way. (Exhibit 1)
The Resolution that formed the CFD approved a RMA for the District, which set forth the manner in which the City Council will levy special taxes on property in the CFD to pay the costs of the services eligible to be financed by the CFD, and to pay the costs of the City to administer the CFD. Following the formation of the CFD, it was discovered that there was an unintended error in the RMA that would have prevented the levy of special taxes on property to be included in Zone 2 of the CFD.
The City Council conducted proceedings in Fiscal Year (FY) 2018-19 to alter the definitions of “Developed Property” and of “Non-Residential Property” in the Rate and Method, so that they reflected what was intended by the City and property owners at the time of formation of the CFD. The then property owners in the CFD approved the proposed alteration and an amendment to the Notice of Special Tax Lien, previously recorded against the property in the CFD, was recorded advising all owners of the property in the CFD of the alteration.
The original RMA was prepared for the development of Site A and definitions in the RMA were based on the types of development anticipated at that time. The changes proposed in this report reflect a broader view of future development taking into consideration the Adaptive Reuse areas and Main Street Neighborhood areas and their impact on future CFD revenues, while also making certain definitions consistent with past Alameda CFD practice (e.g., CFD’s in Alameda Landing, Bay Port).
DISCUSSION
The CFD was formed pursuant to the City’s Special Tax Financing Improvement Code (Municipal Code Section 3-70.1 and following), which provides for a process to alter the RMA for the CFD. That process includes a resolution which describes the proposed alterations, and calls for a public hearing regarding the alterations. Following the public hearing, the City Council, if it decides to proceed with the alterations, will consider adoption of a resolution calling for a special mail ballot election of the taxpayers residing in the CFD, to approve the alterations. The election will be conducted by the City Clerk with the assistance of the City’s Bond Counsel and the Special Tax Consultant for the CFD. If more than 2/3rds of the votes cast at the election are in favor of the alterations, the City Council will canvass the election and declare that the alteration is effective.
The alterations proposed for the RMA are generally described below, and are embodied in a proposed Amended and Restated Rate and Method of Apportionment of Special Taxes for the CFD set forth in Exhibit B to the Resolution of Consideration for the CFD.
The proposed Amended and Restated Rate and Method of Apportionment of Special Taxes for the CFD generally include changes that will clarify how special taxes will apply to a developer’s particular development.
• Specify that the apartments that have already received land use approvals/entitlements or are under construction will be taxed on a per acre basis per the original provisions of the RMA (Site A), and apartments to be constructed in the future and that are not currently entitled or under construction will be taxed on a per unit basis, consistent past Alameda CFD practice.
• Clarify that below market rate units are those that meet low and very low income standards. These units are exempt from special taxes.
• Add an additional below market rate unit classification for those units that meet moderate income standards. These units are to be taxed at a rate of 80% of special tax applicable to the same type of unit that is not below market rate, consistent with past Alameda CFD practice.
• Clarify that property in Tax Zone 2 as identified in the RMA that has transferred from public to private ownership is considered developed at the earlier of (i) issuance by the City of a certificate of occupancy or final certificate of occupancy, or (ii) five years after transfer of the property to a private owner. Clarify that Alameda County Assessor’s Parcel No. 074 -1375-001-00 is considered developed as of FY 2024-25 unless a temporary or final certificate of occupancy is issued earlier. This change will allow a developer who purchases a parcel in Tax Zone 2 up to a maximum of five (5) years to develop the parcel in advance of the special taxes becoming due.
• Specify that a Townhome unit in Tax Zone 2 as identified in the RMA refers to a unit that is greater than 1,500 square feet of residential floor area. This change clarifies the definition of Townhome for Tax Zone 2.
• Clarify the definition of Townhome Unit for Tax Zone 1 as identified in the RMA. This change better distinguishes the definition of Townhome from that of Condominium in Tax Zone 1.
Therefore, it is recommended that the City Council adopt a resolution setting a public hearing for February 16, 2021, to consider the proposed alterations of the RMA described above.
As noted above, the Resolution of Consideration for the CFD sets February 16, 2021, as the date for a public hearing on the proposed changes to the RMA for the CFD.
ALTERNATIVES
• Approve the Resolution of Consideration to alter the Rate and Method of Apportionment as described above.
• Take no action or approve only a few of the proposed changes, which would result in less revenue to CFD, inconsistency with other assessment districts and potentially financial impacts to the General Fund.
FINANCIAL IMPACT
There is no impact to the General Fund to alter the RMA for the CFD. All costs related to the alteration proceedings are to be paid from previously appropriated funds derived from the special tax levy in the CFD (Fund 271). The annual costs to administer the CFD are to be paid from annual special taxes levied on property within the boundaries of the CFD and are subject to City Council appropriations approval. No additional appropriations are requested.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The Municipal Code contains, in Section 3-70, the City of Alameda Special Tax Financing Improvement Code pursuant to which the CFD was formed, and which includes a procedure pursuant to which the alteration of the RMA for the CFD is being conducted.
ENVIRONMENTAL REVIEW
On February 4, 2014, the City certified the Alameda Point Final Environmental Impact Report (Final EIR) in compliance with the California Environmental Quality Act (CEQA). The Final EIR evaluated the environmental impacts of redevelopment and reuse of the lands at Alameda Point consistent with Alameda Point Zoning District, including the adaptive reuse area and with the Alameda Point Waterfront Town Center Plan, which included Site A. The formation of the CFD, and the action to alter the RMA, are consistent with the prior approvals and will not result in any new or substantially more severe environmental impacts than were previously identified in the Final EIR.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Adopt a Resolution of Consideration to alter the rate and method of apportionment of special taxes for Community Facilities District No. 17-1 and set a public hearing for February 16, 2021.
CITY MANAGER RECOMMENDATION
The City Manager recommends that the City Council adopt the Resolution of Consideration and set a public hearing date.
Respectfully submitted,
Lisa Maxwell, Interim Community Development Director
By,
Michelle Giles, Base Reuse Manager
Financial Impact section reviewed,
Annie To, Finance Director
Exhibit:
1. Map of CFD-17-1
cc: Eric Levitt, City Manager