Title
Adoption of Resolution Amending the Base Reuse Fund Budget to Appropriate $300,000 for a Business Development Loan for Firebrand Artisan Breads to Complete a Retail Café At 707 W. Tower Road; and Recommendation to Authorize the Interim City Manager, or Designee, to Execute a Business Development Loan Agreement of $300,000 to Provide Financial Assistance to Firebrand Artisan Breads to Construct a Retail Café at 707 W. Tower Avenue (Project). (Community Development 29061822)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
Firebrand Artisan Breads (Firebrand) has been headquartered in and has operated a production facility at 707 W. Tower Avenue since 2021. Firebrand wants to build out a 1,500 square foot retail café (Project) in the same location and is seeking $300,000 in the form of a financial assistance loan from the City of Alameda (City) to realize the Project.
Staff recommends that City Council authorize the Interim City Manager, or designee, to execute a loan agreement (Exhibit 1) to provide $300,000 in financial assistance to Firebrand to complete the Project.
BACKGROUND
In 2021, Firebrand moved into an approximately 40,000-square-foot Alameda facility located on W. Tower Road at Alameda Point. The Alameda facility produces most of Firebrand’s breads and pastries and employs the vast majority of Firebrand’s employees.
As part of the original buildout, the production facility was designed to allow for a full retail café fronting W. Tower Road and much of the initial work on the café was completed including, but not limited to, the upsizing of the gas, electric and water lines, tying in of necessary sewer lines, the purchase of a large kitchen hood, and primary architectural design work.
In 2021, Firebrand and City staff had conversations regarding financial assistance to support the buildout of a 1,500 square foot retail café. It was the original intention of Firebrand to build a café along with the commercial bakery. Due to increased construction costs and inflation, the cafe had to be removed from the initial project.
In 2007, the Community Improvement Commission of the City of Alameda (CIC) approved a similar loan to Alameda Entertainment Associates, L.P. (AEA) to help fund improvements to the Historic Alameda Theater. The approved $300,000 loan from the CIC was intended to support the rehabilitation and restoration of the mezzanine balcony and to cover a portion of the cineplex construction contingency.
DISCUSSION
Firebrand was founded in 2008, with just four employees. Today, Firebrand employs nearly a hundred employees and bakes bread and pastries for retail partners across the Bay Area. Firebrand practices an open hiring policy, with a focus on hiring people with high barriers to employment, such as people experiencing homelessness or were formerly incarcerated. The Alameda facility features a worker resource center to offer career development services and classes to Firebrand workers and others seeking assistance.
Firebrand also features a unique corporate structure (a perpetual purpose trust serves as the parent company) that ensures the company will never go public and decision-making is conducted by a stewardship committee.
Approval of this loan agreement will allow Firebrand to build out a 1,500 square foot retail café. This new retail location will serve the employees, residents, and visitors of Alameda Point as well as the surrounding East Bay. The café will provide Firebrand’s signature breads, pastries and coffee, but will also include a full-service food menu. The café will have both indoor and outdoor seating and will feature extended hours intended to provide food service to neighboring Almanac Brewery customers. Almanac Brewery and Firebrand will work collaboratively to provide food to their customers, sharing a point of sale system and resources.
The addition of the café will provide much-needed coffee, tea, and food service offerings to Alameda Point and further activate the area that currently has limited retail options. The café will also bring additional employment to Alameda Point and additional sales tax revenue to the City. Firebrand believes there is ample demand for a café given Alameda Point’s growing commercial and residential activity.
Staff recommends that the City Council authorize the Interim City Manager, or designee, to execute a loan agreement (Exhibit 1) to provide $300,000 of financial assistance to Firebrand to complete the Project. The loan is secured by Firebrand’s prior improvements to the facility at 707 W. Tower Avenue, and its industrial bakery equipment and other furniture, fixtures, and equipment (FF&E) at the facility. Firebrand does not own the actual facility or underlying land and therefore is unable to secure the loan with an interest in real property. A detailed inventory of FF&E (with a total estimated value of $320,231.00) is attached to the end of Exhibit A of the loan agreement.
ALTERNATIVES
• Authorize the Interim City Manager, or designee, to execute a loan agreement of $300,000 to provide financial assistance to Firebrand to complete the buildout of a new retail cafe.
• Direct staff to revise the loan agreement and authorize the Interim City Manager, or designee, to execute the agreement based on specified revisions.
• Direct staff to revise the loan agreement and return to City Council at a future date for approval.
• Decline to move forward with the loan agreement to provide financial assistance to Firebrand to complete the buildout of a new retail cafe.
FINANCIAL IMPACT
Execution of the loan agreement would require $300,000 to be appropriated in FY 2022-23 by the City Council from the Alameda Point fund balance. Under the proposed promissory note, the $300,000 loan would have an interest rate of 2% per year over seven years. Principal and interest payments of $4,071.43 would be due monthly between October 1, 2022 and September 1, 2029. Principal and interest payments over the seven-year term would total $342,000 and would be deposited in the Alameda Point/Base Reuse fund (290).
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
This action is categorically exempt from review under the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15301 (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 amending the Base Reuse Fund budget to appropriate $300,000 for a Business Development Loan for Firebrand Artisan Breads to complete a retail café At 707 W. Tower Road; and Authorize the Interim City Manager, or designee, to execute a business development loan agreement of $300,000 to provide financial assistance to Firebrand Artisan Breads to construct a retail café at 707 West Tower Avenue.
Respectfully submitted,
Lisa Maxwell, Community Development Director
By,
Walker Toma, Development Manager
Financial Impact section reviewed,
Margaret O’Brian, Finance Director
Exhibit:
1. Business Development Financial Assistance Agreement
cc: Nancy Bronstein, Interim City Manager