Title
Discussion of Use Priorities for Alameda Point: Buildings 41, 92, 24 and 11
Body
To: Members of the Mayor’s Economic Development Advisory Task Force
From: Abigail Thorne-Lyman, Director of Base Reuse and Economic Development
EXECUTIVE SUMMARY
On October 17, the City Council directed staff to hold a study session on priorities for upcoming Alameda Point leases. In anticipation of an early 2024 study session with the City Council, Staff is seeking feedback from the Economic Development Advisory Panel (EDAP), to ensure the Council weighs the expertise of the Alameda business community in their discussion of possible future uses at Alameda Point. This item builds upon the study session held at the March 7, 2023 City Council meeting, which focused on the City’s Disposition Strategy for the Alameda Point Reuse Area.
Staff seeks the feedback from the EDAP to inform recommendations to the City Council on the City’s priorities in the future selection and negotiations for the lease and/or sale of Alameda Point Reuse Area properties over the next 18 to 24 months, including Buildings 41, 92, 24 and 11, as well as developable property near Building 92 (see Exhibit 1 for maps of the Reuse Area and Exhibit 2 for numbered buildings).
BACKGROUND
At its October 17, 2023 meeting, the City Council considered and rejected a potential lease of Building 11 in the Alameda Point Reuse Area to Science Corporation, a life sciences company. The Council’s adopted motion provided direction to staff to hold a study session on upcoming Alameda Point leases. Based on the discussion in this meeting, staff has interpreted the Council’s direction for a study session to focus on desired and discouraged uses related to the upcoming lease and sale of buildings in the Reuse Area.
In late 2022, staff retained Keyser Marston Associates (KMA), a real estate economics consulting firm, to undertake an analysis of the real estate assets at Alameda Point specifically within the Reuse Area, and to make recommendations regarding a strategy for future leasing and sale of buildings (see Exhibit 4). This analysis and staff’s recommendations for a Disposition Strategy focused on the Reuse Area were presented to City Council in a study session at its March 7, 2023 meeting. The Disposition Strategy focused primarily on the timing for leasing and sale of buildings in the Reuse Area with the primary goal of leveraging and delivering backbone infrastructure, but did not discuss the potential uses within these buildings. The materials from this study session provide critical background for this current discussion as well and can be reviewed in the Council agenda <https://alameda.legistar.com/LegislationDetail.aspx?ID=6040148&GUID=41B22A9B-D8F1-4B2B-AAB7-5B64A180322B&Options=&Search=&FullText=1>.
The City Council expressed general support for the recommended Mixed Portfolio Phasing Strategy for the Alameda Point Reuse Area, which established three goals for the disposition of land:
1. Implement New Cohesive Backbone Infrastructure Development Consistent with the Master Infrastructure Plan (MIP). A primary goal of Alameda Point is to ensure that reuse and redevelopment implements and ultimately, is served by a new and cohesive backbone infrastructure system guided by the MIP.
2. Generate Sufficient Lease Revenue to Cover Operating Expenses. Ensure that there is sufficient lease revenue to cover ongoing operating expenses (e.g. staffing and maintenance costs), as well as contingency funds for unexpected repair and maintenance costs resulting from aging infrastructure.
3. Deliver Benefits to the Alameda Community. Leverage the City’s public land asset to bring community benefits to the City of Alameda, such as:
• Transportation facilities
• Public parks, such as Whale Park, Seaplane Lagoon Promenade and the future regional sports complex
• Job creation
• Affordable housing at varying income levels
• Tax base growth, including property, sales and possessory interest taxes
Potential uses for the buildings were not discussed at the March 7 study session and are the subject of this EDAP meeting. Staff and the City’s commercial real estate broker, Cushman & Wakefield, have focused on recruiting potential tenants that support the City’s priority economic sectors as identified in the City’s 2018 Economic Development Strategic Plan, namely: life sciences, clean tech/green tech/high tech, blue tech and maritime, retail and restaurants, tourism and hospitality, and artists and small manufacturers. Alameda Point has successfully emerged as a strategic location for many of these sectors.
Staff is seeking feedback that will inform the sale or lease of several buildings in the Reuse Area, including Buildings 41 and 92 (future sale), as well as Buildings 24 and 11 (future lease). In anticipation of this discussion, staff coordinated a tour of these buildings on December 8, 2023, to ensure the City Council, EDAP, Planning Board, Historic Advisory Board and the general public have had the chance to view the buildings and gain a shared understanding of the local context, physical opportunities and constraints, and infrastructure and investment needs of the properties.
The Reuse Area is a fraction of Alameda Point, and the buildings in question are a small subset of this area. These buildings, however, represent critical short-term opportunities to define the character of Alameda Point. In 2024, staff will return for study sessions addressing longer term issues including the future of the Enterprise District which is bounded by West Atlantic Avenue, Central Avenue, the Bay and Seaplane Lagoon; and the future of residential development in Alameda Point.
DISCUSSION
Staff’s recommended outcome from this study session - and the subsequent Council study session - is to augment the Disposition Strategy goals described above with more specific direction focused on economic development and land use priorities for the leasing and sale of upcoming particular properties. Ultimately, staff intends to incorporate the Disposition Strategy goals, as well as the additional feedback on land use priorities for specific properties, into the selection and negotiation process for new leases and sales.
Staff proposes a general fourth goal for consideration and feedback of the EDAP:
4. Prioritize occupants supporting the City’s Economic Development Strategic Plan priority sectors. Recruit and favor businesses that support life sciences, clean tech/green tech/high tech, blue tech and maritime, retail and restaurants, tourism and hospitality, and artists and small manufacturers. Animal testing will be prohibited on City-owned land, but life sciences that do not require animal testing are a priority.
Additionally, staff makes the following specific recommendations for the buildings that will be leased or sold in the next 18 to 24 months:
- Future Sale of Building 92 (As well as the properties occupied by Buildings 101 and 114):
o Preferred Uses:
§ Life Sciences (but, without animal testing)
§ Clean Tech/ Green Tech/ High Tech
§ Other advanced manufacturing
§ Blue Tech (but without need for direct water access)
§ Beverage and food manufacturing
§ Retail and Restaurants
§ Multi-tenant, Small Manufacturers, artists, ‘makers’, small business, office
§ Work live/small business
§ Office
§ Favor uses with a greater density of people (e.g. job-intensive employers rather than large scale R&D or manufacturing with limited employees)
o Not Preferred Uses:
§ Shipping and warehouse businesses (too much truck traffic, not enough jobs)
§ Contractor yards and storage yards
§ Residential not permitted by zoning
- Future Sale of Building 41:
o Preferred Uses:
§ Commercial including retail/restaurant as ancillary use
§ Life Sciences (but, without animal testing)
§ Clean Tech/ Green Tech/ High Tech
§ Other advanced manufacturing
§ Blue Tech (but without need for direct water access)
§ Beverage and food manufacturing
§ Multi-tenant, Small Manufacturers, artists, makers, small business, office
§ Favor uses with a greater density of people (e.g. job-intensive employers rather than large scale R&D or manufacturing with limited employees)
o Not Preferred Uses:
§ Shipping and warehouse businesses (too much truck traffic, not enough jobs),
§ Contractor yards and storage yards,
§ Residential not permitted by zoning
§ Cannabis not permitted by zoning in City owned buildings
- Future Lease of Building 24:
o Preferred Uses:
§ Beverage and food manufacturing (with tasting room or commercial component preferred to complement Spirits Alley). Potential to relocate wineries from Building 25 to Building 24 to accommodate DePave Park.
§ Life Sciences (but, without animal testing)
§ Clean Tech/ Green Tech/ High Tech
§ Blue Tech (but without need for direct water access)
§ Multi-tenant, Small Manufacturers, artists, makers, small business, office
§ Lower density job uses acceptable, provided they support innovation or advanced manufacturing in priority sectors
o Not Preferred Uses:
§ Shipping and warehouse businesses (too much truck traffic, not enough jobs),
§ Contractor yards and storage yards,
§ Residential not permitted by zoning
§ Cannabis not permitted by zoning in City owned buildings
- Future Lease of Building 11:
o Preferred Uses:
§ Commercial including retail/restaurant as ancillary use
§ Life Sciences (but, without animal testing)
§ Clean Tech/ Green Tech/ High Tech
§ Other advanced manufacturing
§ Blue Tech (but without need for direct water access)
§ Beverage and food manufacturing
§ Multi-tenant, Small Manufacturers, artists, makers, small business, office
§ Lower density job uses acceptable, provided they support innovation or advanced manufacturing in priority sectors
o Not Preferred Uses:
§ Shipping and warehouse businesses (too much truck traffic, not enough jobs),
§ Contractor yards and storage yards,
§ Residential not permitted by zoning
§ Cannabis not permitted by zoning in City owned buildings
Generally, the above building-specific recommendations are geared toward supporting uses consistent with the priority sectors, while also considering the context of the buildings within the Reuse Area. Buildings 41 and 92 are located in a mixed-use area adjacent to future residential neighborhoods with existing restaurants and amenities, and Staff propose focusing on more “people-intensive” uses. Building 24 can help reinforce the role Monarch Street and West Tower Avenue play as Spirits Alley. Building 11 is further afield and may be more appropriate for a less dense, research and development or innovation use.
Staff is seeking the feedback of EDAP on a high-level set of priorities that could be used to evaluate potential investors and tenants in the sale and lease of these buildings. Staff has proposed the following categories for these priorities:
A. Financial return
– Highest financial offer
– Greatest capital improvements to building
– Stable tenant as demonstrated by business longevity, access to capital, other measures of financial strength
B. Economic contributions to Alameda Point or City
– Expand local Alameda businesses
– Focus on Economic Development Strategic Plan clusters
– Innovation
– Job Growth or Quality (number/concentration, or type (eg middle-skill))
– Small / independent / woman-owned / minority-owned businesses
C. Placemaking & Community Benefits
– Active retail / consumer presence
– Nonprofits / businesses with social or environmental mission
Staff is asking EDAP to discuss the following questions:
• What role should the Reuse Area play in bolstering the City’s goals? Is the staff recommendation to focus primarily on attracting businesses in the priority sectors the correct goal? Is it the only goal pertaining to land use?
• What are the greatest priorities to the City when leasing/selling buildings in the reuse area?
• How should staff evaluate a proposal from a potential lessee or investor to ensure the City achieves its priorities?
• Does EDAP have other recommendations to inform the evaluation and selection process for tenants or investors?
FINANCIAL IMPACT
Pursuant to a City Council policy (Resolution No. 13643, adopted November 4, 2003), Alameda Point development is expected to be fiscally neutral to the City. The policy states, “revenues created by a development project, coupled with assessment district or community facilities district financing where appropriate, will provide sufficient funding to the City of Alameda to pay its cost of providing municipal services for that development. As a result, revenue generated from sale and leasing activity, as well as revenues generated from a community facilities district for services, is used to benefit Alameda Point. Specifically, revenue from building sales fund the construction of new infrastructure in the Reuse Area and leasing revenue helps fund maintenance and operational costs at Alameda Point.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
Key documents that established the guiding vision for Alameda Point include the following, most of which can be accessed on the Alameda Point website <https://www.alamedaca.gov/Departments/Alameda-Point>:
• NAS Alameda Community Reuse Plan (1996)
• Alameda Point General Plan Amendment Chapter 9 (2003)
• Alameda Point Zoning and Municipal Code Amendments (2014)
• Master Infrastructure Plan (MIP) (2014)
• Town Center and Waterfront Specific Plan (2014)
• Main Street Neighborhood Specific Plan (2017)
• Transportation Demand Management Plan (2018)
• Economic Development Strategic Plan (2018)
• Climate Action and Resiliency Plan (2019)
• MIP Amendment (2020)
ENVIRONMENTAL REVIEW
This presentation and discussion regarding a proposed disposition strategy to guide development at Alameda Point, which does not commit the City to any definite course of action, does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this work session. However, Alameda Point’s Climate and Action Resiliency Plan (CARP) does address sea-level rise and new infrastructure at Alameda Point will assist in the implementation of the CARP.
RECOMMENDATION
Recommendation to hold a work session and provide feedback on use priorities for Alameda Point Reuse Area buildings to be leased and sold in 2024 and 2025
Respectfully submitted,
Abigail Thorne-Lyman, Director of Base Reuse and Economic Development
By,
Abigail Thorne-Lyman, Director of Base Reuse and Economic Development
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibits:
1. Exhibit 1: Presentation
2. Exhibit 2: Alameda Point Occupancy Profile
3. Exhibit 3: Building Fact Sheets
4. Exhibit 4: Keyser Marston Associates Report: Alameda Point Reuse Area Disposition Framework Analysis