Title
Public Hearing to Consider Adoption of Resolution Approving a 12-Month Exclusive Negotiating Agreement with Little Opera House Inc., dba Radium, for the Development of 2.13 Acres of Property on Pan Am Way at Alameda Point for a Performing Arts Center; and
Introduction of Ordinance Authorizing the City Manager to Execute a 12-Month License for the Temporary Use of the Property for Performing Arts and Special Events. [Requires four affirmative votes]
The streamlining provision of Public Resources Section 21083.3 and Section 15183 of the California Environmental Quality Act Guidelines apply and no further environmental review is required. (Base Reuse 29061810) [Not heard on December 5, 2023]
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
The recommended Exclusive Negotiating Agreement (ENA) with Little Opera House, Inc. (LOH) establishes a 12-month period during which time the City of Alameda (City) and LOH will make a good faith effort to prepare a mutually acceptable long-term Ground Lease with Purchase Option for the development of a performing arts center on approximately 2.13 acres of City-owned land located on Pan Am Way between the Seaplane Waterfront Park and the NAS Alameda Museum at Alameda Point.
The recommended license with LOH allows LOH to continue their existing temporary outdoor performance and exhibition space, also known as Radium Runway, for performing arts and special events for an additional 12 months during the ENA period. Both the ENA and the license include provisions to allow the City Manager to extend the terms by six months, if progress is being made and the additional time is necessary to finalize the draft Ground Lease for City Council consideration.
Staff is recommending approval of the Resolution approving the ENA and the Ordinance approving the short-term License. The ENA is included as Exhibit 1. The License is attached as Exhibit 2.
BACKGROUND
The subject 2.13 acres of property is located on Pan Am Way between the new waterfront park and the NAS Alameda Museum at Alameda Point. The site is currently occupied by five painted shipping containers arranged in a circle for temporary use for performances and exhibitions and is known as Radium Runway. The property is located within the Waterfront and Town Center Precise Plan area, the Site A Development Plan area, and the Naval Air Station Alameda Historic District.
In 2022, City Council approved an amended Development Plan and Disposition and Development Agreement (DDA) for Site A Development Plan area. The amended Development Plan identified the subject 2.13 acres for development of a theater/entertainment use. The amended DDA specified that the Site A master developer would be responsible for the costs of the site preparation and necessary infrastructure to support a theater/entertainment facility. The DDA further stipulates that the land would be retained by the City, and the City would select a preferred developer for the site and negotiate any long-term agreements with that developer for the development, operation, and ownership of the performing arts center.
In 2023, the City released a Request for Proposals (RFP) soliciting proposals from qualified developers for the project consistent with the approved DDA. In August, in response to the RFP, the City received one proposal, which was from LOH. The City staff reviewed the proposal and determined that the proposal met the City’s minimum qualifications to be selected for further negotiations. The LOH response to the RFP described their development team, their development qualifications, and their vision for the performing arts center that they would like to build and operate on the property and is included as Exhibit 3.
DISCUSSION
Exclusive Negotiating Agreement. The purpose of the draft ENA is to establish a formal relationship between the City and LOH, doing business as Radium, for a period of 12 months, during which time the City and LOH will seek to negotiate a mutually acceptable ground lease with purchase option for City Council consideration at a Council meeting in late 2024.
During the ENA period the City will negotiate exclusively with the Developer and will not entertain proposals for the property from other parties. The ENA is also valuable to LOH, because they can use the ENA as proof of “site control” which is essential to their fundraising efforts to finance the project. The financial strength of the proposed project near the end of the ENA period will be an important consideration for the City Council when the Council considers a draft Lease/Purchase Option in late 2024. Per the ENA, the 12-month term may be extended two (2) times for up to three (3) months each at the sole discretion of the City Manager, if progress is being made and additional time is needed to complete the negotiations.
Per the ENA, opportunities for the public, City Council, and others will be provided to inform the negotiations. These opportunities include, but are not limited to:
• A City Council Public Hearing to consider a proposed Term Sheet for the Lease/Purchase option. The Term Sheet shall focus on the financial, operational, and construction schedule milestones for the project. A key challenge for LOH during the 12-month ENA period will be to provide evidence that LOH has the financial ability to undertake and successfully complete the proposed project.
• A Planning Board Public Hearing to consider a proposed Development Plan and architectural design concept for the proposed building. The hearing will focus on the design and operational aspects of the proposed project (parking, access, hours of operation, etc.), and consistency of the architectural design with adopted City Design Standards and Regulations.
• An Historic Advisory Board Public Hearing to consider the Architectural Design concept for the proposed project and its consistency with the Character Defining Features of the NAS Historic District.
• A final City Council Public Hearing before the end of the ENA period to consider a Ground Lease with Purchase Option with LOH.
License. The recommended license with LOH allows LOH to continue their existing temporary outdoor performance and exhibition space for performing arts and special events for an additional 12 months during the ENA period. If the ENA is extended by the City Manager, the License allows the City Manager to extend the License, as well.
The purpose of the temporary outdoor events on the site is to test the viability and community interest in attending regular performance and/or exhibitions at this location in Alameda. The success of the temporary events helps LOH and the City assess the financial viability and potential success of a permeant performance space building at this location.
It is envisioned that the Ground Lease/Purchase Option would include provisions allowing LOH to continue temporary use of the site for temporary events up until the time that the actual construction starts on the site, so if the Ground Lease/Purchase Option is approved by City Council at the end of the ENA period, there will be no need to extend the short term, 12-month license.
ALTERNATIVES
City Council may consider a number of alternatives, including:
• Approve the ENA and License as recommended. This will allow negotiations to begin and allow LOH to continue their temporary events for another year during the ENA period.
• Approve the ENA and License with changes. If City Council request any changes or revisions to either the ENA or License and then approve the amended documents. Staff would then meet with LOH to determine if they are still willing to move forward with the amended documents. If they agree to the changes, the negotiations would begin and the temporary performances will continue. If LOH does not agree, the licenses and ENA would not be executed and the negotiations would not commence and LOH’s current use of the site for temporary events will expire in January 2024.
• Deny the ENA and License City Council may deny or delay action on the documents. In this scenario, City Council should identify the reasons they do not want to move forward with LOH and how City Council would like staff to proceed with the future development of the property.
FINANCIAL IMPACT
LOH will pay the City a one-time license fee of $2,000 during the one-year ENA period. As noted above, the financial strength of the proposed project near the end of the ENA period will be an important consideration for the City Council when City Council considers a draft Lease/Purchase Option in late 2024.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The LOH proposal for the site and its temporary performance space is consistent with the General Plan, Waterfront Town Center Specific Plan, and Site A Development Plan.
ENVIRONMENTAL REVIEW
Pursuant to the streamlining provision of Section 15183 of the CEQA Guidelines, no further environmental review is required because the project is consistent with the General Plan and Zoning Regulations for the land. The environmental impacts of the development of the area were considered in the Alameda Point Project (APP) Final Environmental Impact Report (FEIR) adopted by the City Council on February 4, 2014, in compliance with the California Environmental Quality Act (CEQA) and in the General Plan Update EIR adopted by the City Council on November 30, 2021. The proposed project to continue temporary use of the site for temporary events would not result in significant impacts that: (1) are peculiar to the project or project site; (2) were not already identified as significant effects, cumulative effects, or off-site effects in the FEIR; or (3) were previously identified as significant effects but are determined to be substantially more severe than discussed in the EIR. Approval of the Ground Lease/Purchase Option and/or approval of a Development Plan for the site will be subject to additional environmental review, once the specifics of the project are more fully known.
CLIMATE IMPACT
Provision of community cultural facilities in a mixed use, transit oriented, urban infill location is consistent with and supports the City of Alameda Climate Action Plan and regional and statewide Climate Protection and Greenhouse Gas Emission reduction strategies, including the Bay Area’s Sustainability Strategy, Plan Bay Area.
RECOMMENDATION
Adopt a resolution approving a 12-month ENA with LOH for the development of 2.13 acres of property on Pan Am Way at Alameda Point for a Performing Arts Center; and introduce an ordinance authorizing the City Manager to execute a 12-month license for the temporary use of the property for Performing Arts and Special Events.
Respectfully submitted,
Abby Thorne-Lyman, Base Reuse and Economic Development Director
By,
Andrew Thomas, Special Advisor to Base Reuse and Economic Development Director
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibits:
1. ENA
2. License
3. RFP Submittal from Little Opera House, Inc.