Title
Adoption of Resolution Declaring Five Project Sites at Alameda Point, including the Enterprise District, Residential Parcels Both Market Rate and Collaborative (Package K), Building 92, Building 11 and Building 19, and Building 25 Exempt from the Surplus Land Act and Authorize the City Manager to Comply with Surplus Lands Act Procedures Related to the Properties Notwithstanding Their Exempt Status. (Community Development 858)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The State of California amended the Surplus Land Act (SLA), effective January 2020. The SLA, as amended, prescribes a process for local governments and agencies to dispose of surplus property. Although staff believes that the recently amended SLA may not be applicable to property that was transferred to the City of Alameda (City) pursuant to the Defense Base Realignment and Closure Act of 1990 (BRAC) process as explained below, staff is recommending, in an abundance of caution, that City Council proceed with issuing Notices of Availability to Sell for five project sites at Alameda Point, including the Enterprise District; Residential Parcels both Market Rate and Collaborative (Package K); Building 92; Building 11 and Building 19; and Building 25, under the Surplus Land Act (collectively, the Available Sites). Set forth on Exhibits 3-8 is a depiction of each Project Site.
BACKGROUND
Broadly speaking, the SLA, as amended by Assembly Bill (“AB”) 1486 of 2019, is intended to make public lands available for certain public uses such as open space or affordable housing, before it is disposed of to private parties. AB1486 expands the reach of the SLA and emphasizes the use of surplus property for affordable housing. The bill is considered to be a legislative response to the housing crisis, and defines surplus land to mean land owned in fee simple by the local agency that the local agency declares to be surplus and that is not necessary for agency use.
The legislation requires surplus land to be declared surplus land or exempt surplus land prior to any disposition. Some examples of exemptions available under the SLA include:
• Land that is put out to bid for purposes of developing either:
o A housing development that has ancillary ground floor uses that restricts 100% of the residential units to person and families of low and moderate income with at least 75% of the units restricted to lower income households; or
o A mixed-use development that is more than one acre that includes not less than 300 housing units and restricts at least 25% of the residential units to lower income households; or
• Property that is subject to valid legal restrictions that are not imposed by the local agency that would prohibit housing unless there is feasible method to satisfactorily mitigate or avoid the prohibition on the site; or
• Land that was granted by the state in trust to a local agency or that was acquired by the local agency for trust purposes and for which the disposal of the land is authorized or required subject to conditions established by the state (generally Public Trust Land).
In addition, the SLA provides that it shall not apply when it conflicts with any other provision of statutory law.
DISCUSSION
The BRAC pursuant to which the City acquired the Available Sites allows the US Government to dispose of property to the local reuse authority for job generating purposes (see Section 2905(b)(4) of the Defense Base Closure and Realignment Act of 1990) without regard to the federal surplus property process, which would have required that the property be offered to federal agencies first and then to the highest bidder. As part of the disposition process for former military property, the US Government also requires that homeless providers be given an opportunity to acquire suitable property at former military bases, and approval of the Base Reuse Plan and the conveyance of the base properties to local reuse authorities is conditioned on the local reuse authority entering into legally binding agreements with homeless providers with respect to use and disposition of property for homeless services (See Base Closure Community Redevelopment and Homeless Assistance Act 10 U.S.C. 2687).
Pursuant to the BRAC statutes, the primary purpose of the disposal of former military base property to local reuse authorities such as the City is for development of the property for job generating uses consistent with the federally approval Base Reuse Plan. The Available Sites were conveyed to the City pursuant to an Economic Development Conveyance Agreement dated June 6, 2000 as amended ("EDC Agreement") that requires that properties be used for purposes consistent with the Base Reuse Plan that are job generating uses. The BRAC statutes require that the City strictly comply with the Base Reuse Plan with respect to the disposition and use of the properties (32 C.F. R §174.9) and conflicts with the SLA provisions due to the fact that BRAC focused on job creation and placed limits on development of housing on the former Naval Air Base. Accordingly, staff believes that the SLA may not apply to the Available Sites and that the Available Sites are Exempt Surplus Land. However, in an abundance of caution staff is recommending that the City comply with the process for notifying housing providers and public agencies of the availability of the Available Sites in accordance with the process required by the SLA given the potential for penalties for failure to comply with the SLA.
Staff examined properties at Alameda Point that are highly desirable for leasing or sale for future development. In January 2020, as the SLA amendments became effective, staff was prepared to present to City Council a lease proposal for a large bay in a hangar and development proposals for the Enterprise District. As a result of the passage of AB1486, all long-term real estate transactions at Alameda Point paused as staff reviewed the new law and its impact on the City's leasing and sale programs. Declaring these Available Sites to be exempt surplus land and authorizing the issuance of a Notice of Availability to Sell or Lease Surplus Property will begin the process of disposing of the Available Sites. Affordable housing developers and public agencies will have the first opportunity to make offers on the Available Sites. If no affordable housing developer or public agency responds to the notice of availability or if affordable housing developers/public agencies respond to the Notice of Availability but the City and the respondents are unable to reach agreement on terms for the sale or lease of any of the Available Sites, the City could then proceed to sell or lease each of the Available Sites for any purposes consistent with the Base Reuse Plan in accordance with the EDC Agreement and pursuant to a process to be determined by the City.
Exhibit 1: Surplus Land Act Process Timing Overview provides an overview of the process under the SLA to advance the development of the Available Sites. In summary, the City must send a Notice of Availability (Exhibit 2) to the list of interested parties described on the Community Development Department website. Interested parties have sixty (60) days to submit Statements of Interest to the City. The City is then required to negotiate in good faith with the parties that submit a Statement of Interest for at least ninety (90) days. If an agreement with an interested party is not reached during the ninety (90) day period or the City rejects all offers consistent with the conditions prescribed in the legislation, the City can proceed with selling or leasing the land for any purpose, although the City is required to record a covenant on the Available Sites that if more than ten residential units are developed on the Available Site, at least 15% of those units must be affordable to lower income households. A more detailed description of the process is included in Exhibit 1. Although the intent of the amendment to the SLA is to make public property no longer necessary for public purposes available for affordable housing or other public agency use, the City retains its land use authority over any property declared Surplus Property and not all properties are suitable for residential uses.
PROPOSED PROJECT SITES (Exhibits 3-8):
• Enterprise District: Staff along with the brokers successfully completed a targeted outreach and advertising process seeking developer applicants for the Enterprise Zone. Staff and City Council completed several work sessions to discuss the desired end users for the property. Staff had received several statements of interest and proposals in January 2020 when amended legislation went into effect and caused the process to stop.
• Residential Parcels both Market Rate and Collaborative (“Package K”): There are currently 68 housing units, commonly referred to as the Big Whites, Ranch Houses and Townhouses, that are being leased to tenants at market rate rent. In addition, there are other units that will be vacated as the West Midway/RESHAP project progresses.
• Building 92: Building 92 is adjacent to the Site A development and the privately-owned previously refurbished Buildings 91 and 9.
• Buildings 11 and 19: Buildings 11 and 19 include historic structures that were returned to the City by Google in 2019. There have been a few infrastructure improvements to the buildings and both are highly desirable. In particular, Building 19, the former Air Traffic Control Tower, frequently receives inquiries.
• Building 25: Building 25 is one of the newer buildings and currently houses two wine makers and a beverage distributer in a vacant bay of the building. City Council approved a lease proposal for a brewery in the vacant bay, but this proposal could not move forward due to the SLA amendments.
Staff believes many of these locations may be suitable for an affordable housing development. Any proposing developer responding to a Notice of Availability would need to consider the infrastructure costs, and environmental issues associated with each Available Site, as well as the existing land use designations for the Available Sites. Staff will provide information on the infrastructure costs, environmental issues, and land use designations in connection with the notice of availability for the Available Site. Applicants will also be required to comply with deed restrictions imposed on the Available Sites by the Navy and environmental regulators, and this information will also be described in the applicable notice of availability.
ALTERNATIVES
• Adopt a resolution authorizing issuance of a Notice of Availability to Sell or Lease with respect to each Available Site.
• Do not authorize the issuance of a Notice of Availability to Sell for some of Available Sites.
• Declare the Available Sites to be exempt surplus land by adopting the alternative resolution attached to this Report and do not direct staff to comply with the SLA process in light of the declared exemption.
• Continue to seek a legislative solution with other base closure communities and do not take any other action in the interim.
FINANCIAL IMPACT
In advancing the SLA process, there would be staff and administrative costs that could be covered by existing staff resources and the current budget appropriation for the Base Reuse Fund (858). Sale proceeds would be received in the Base Reuse Fund (858). The SLA does not require that the City sell or lease any of the Available Sites for less than fair market value.
Additionally, the City may experience increased revenue due to subsequent sale or lease of all or some of the Available Sites.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action does not affect the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
In accordance with the California Environmental Quality Act (CEQA), these project sites are Categorically Exempt pursuant to CEQA Guidelines Section 15301(c) - Existing Facilities.
CLIMATE IMPACTS
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Adopt a Resolution declaring five project sites at Alameda Point, including the Enterprise District, residential parcels both market rate and collaborative (Package K), Building 92, Building 11 and Building 19, and Building 25 exempt from the Surplus Land Act and authorize the City Manager to comply with Surplus Lands Act Procedures related to the properties notwithstanding their exempt status; and
Adopt a Resolution Declaring Five Project Sites at Alameda Point, including the Enterprise District, residential parcels both market rate and collaborative (Package K), Building 92, Building 11 and Building 19, and Building 25 to be exempt from the Surplus Land Act.
CITY MANAGER RECOMMENDATION
The City Manager recommends that the Council adopt a resolution declaring the five project sites at Alameda Point as outlined in the recommendation surplus and issue a Notice of Availability to Sell or Lease Surplus Property.
Due to the level of effort this will take, I request that City Council consider prioritizing the properties.
Respectfully submitted,
Lisa Nelson Maxwell, Community Development Director
By,
Nanette Mocanu, Assistant Community Development Director
Financial Impact section reviewed,
Annie To, Finance Director
Exhibits:
1. Surplus Land Act Process-Timing Overview
2. Sample Notice of Availability
3. Map of Enterprise District
4. Map of Residential Parcels (Package K)
5. Map of Building 92
6. Map of Building 11
7. Map of Building 19
8. Map of Building 25
cc: Eric Levitt, City Manager